Resource sector freeze tag provides a clever ruse to pick winners.
InvestorIntelReport — It was over a year ago, when the market was abuzz about how 80% of the TSX Venture companies were going to run out of money and collapse (A) by the end of the year. One has to wonder whether this was fact or fiction, because “if” this was indeed true: where are the headlines of these so-called cash strapped stocks hitting the sidewalk after falling from their ivory towers?
An recently associate asked me where all the M&A deals (B) were? While I cited InvestorIntel member Levon Resources’ acquisition of 10% of one of Nevada’s most promising precious metals assets, which undoubtedly contributed to $LVNVF up +20.39% and $LVN +16.67% in November — he was right, there should be more.
Get our daily investorintel update
If formula (A) or hypothesis (A) was indeed a reality, then the companies with cash (B) would be in full flurry to pounce on these lifeless petals and pollinate? After all these cash strapped vehicles would move empowered players towards an appetizing year of rising valuations and shareholder pleasure? Or do we have (C) – numerous public companies living on borrowed air time, with management working for free: accepting that they were never worth anything to start with?
The confusion from (A), (B) and (C) has not caused the predictable panic of fight or flight in the resource sector, but instead has created an utter stalemate reminiscent of a childhood game of “freeze tag” (D). It seems that strategy (D) of “If we do not move, nothing will happen” or the classic passive aggressive strategy of “let’s just wait and see what happens….” makes me want to run into these empty streets and say “really? You really think you’re going to get rich sitting on your ***?”
There is documentation that is substantiating this idle behavior, as there are indeed a couple of well-known billionaires hiding out on islands telling brokers on the street that they are going to just “wait it out and see”. Meanwhile I am reviewing the news online, checking social media for the predictable splattering on the street of all of these companies that I keep being told must be dying all around me, and instead, all I hear is silence?
The conclusion is clear, there are some companies that are defying gravity and moving north. This sitting on your hands concept is counterintuitive to this entrepreneur, and from my experience in playing freeze tag, to which I usually won — my objective was always simple: run quickly and never get caught.
Now, if you are in InvestorIntelReport member, you will be receiving today a list of the various market sectors and how they moved in November, and this includes last week movement. Additionally, you will get to see who moved +42.86% — and our Top 20 Most Read InvestorIntel articles….but you have to be a member. So log into InvestorIntelReport or click here to become a member.
An accomplished entrepreneur and corporate finance professional, Tracy Weslosky is the CEO for InvestorIntel Corp. and the VP of Business Development for Bellotti Capital Partners ... <Read more about Tracy Weslosky>