Volume..
I have always said that if real estate is about location, location, and location, then, stock investing is about volume, volume, and more volume. Recently, Ganndolph on the other board was comparing the fundamentals of calvf today with the calvf of 1996. I guess with the rationale that the price should then be like it was 16 years ago. When my attitude about this stock changed sometime around 2007 it was not because of the fundamentals. I believed and still believe that Hayden runs a good productive mine, improves it as needed, treats the employees fairly for that part of the world, and is making a good profit. Even if you overlooked the fact that they had to give away or sell (however you want to look at it) 51% of the company you still could be enticed by Gann's rhetoric that always highlights the fundamentals through comparisons.
Nevertheless, I became Gann's biggest critic and was kind of blackballed by him and his followers not, because of the basic fundamentals, which I tryed to stay away from, but, because of the 500+ million in outstanding shares. And, how that number came to be. Those shares doubled from about 225 million to the current number right around the big Nama hype job and then jump to .36 cents. The problem i see with this stock or any stock in the 10,000 companies in the OTC group, centers around the difficulty of having any sustained run with the potential huge lurking volume that can jump out of the woodwork anytime with a ton of leverage. That is why it would appear to me that it will probably never even get back to .20 cents. There are just to many investors and management options that bought it at sub-five cents, and, will jump at the chance to make a profit at any reasonable share price. And, even if it spiked to say $1 dollar who would buy it at the price? I doubt that any hedge fund, mutual fund, or heavy hitters would buy at that price and risk left holding the bag and taking a hundred or two hundred million dollar loss. You only have to look at Kinross Mining who sold out for around..i think 20 million but i am not sure. They were quit a substantial company but they were no longer interest in their shares and actually no longer interested in Africa period.
Essentially, i think their is a reason that so many of these OTC stocks are flying under the radar in these exotic or is that toxic exchanges. Therefore, to my way of thinking you cannot look at these sort of stocks like calvf as if they are top tier or mid-cap stocks, because they will disappoint you every time. If I was to ever go back and start buying penny stocks again the first thing I would look at is outstanding shares and trading volume. There is just a lot more potential for a buy-out, shell play, run-up, etc. with a company with under 50 million outstanding shares. But, you would probably have to prove that out with a scan of winning OTC stocks. These are just ideas.. so take them with a grain of salt because of I no longer have any skin in this game and really could care less what happens to this company now.
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