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Take physic, pomp

Barrick (ABX), Newmont (NEM) and vampire squids

This is a chart of Barrick (ABX), Newmont (NEM) and the gold bullion ETF (GLD) over the last ten days, which starts at Thursday Feb 19th when both stocks popped on their Q4 results. The squiggly lines run to today and clearly, Newmont’s doing better:
Here’s a piece from IKN 302 dated Sunday Feb 22nd, the weekend following the Q4 numbers from both companies.
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There were many 4q14 results filed by the big mining
companies last week, including NEM, GG, most other large name you’d care to
mention along with several of the wannabe large names you can mention. NEM’s
numbers were good and the stock rightly rallied, but when Barrick (ABX)
reported its 4q14 and year-end numbers on Wednesday evening (9) it caught much
of the limelight, to the point where little old IKN bothered to make mention of
the NR (10). There was a lot of talk in the NR and subsequently in the mining
chattersphere about the NR, with all its promises and that
Back To The Future motif. You’ll also note that ABX rallied on the
news and, like NEM, bucked the sector trend to finish positive on the week. On
discussing the results with a couple of trusted mailpals in this crazy business
I wrote the mail below at one point and one of my pals told me it deserved a
bigger audience, that I should stick it in the Weekly. So for what it’s worth,
here it is (grammar slightly scrubbed, but it’s the same):
My read from the ABX NR (and
reaction) is the Goldman Sachs angle. The narrative is that Thornton is
adopting a strategy more akin to “real business”, i.e. more
transparent, clear goals and deeply concerned with the things anal ysts like,
your balance and your debt and your positive free cash flow and the love and
deep respect for the shareholder.
Yes, of course it’s BS. But it’s the
type of BS perfected in and by the Vampire Squid. The delivery of the message
is also key because the company that wants to project this cannot say it out
loud, but instead plays to the egos of its audience by stating its case and
leaving them to “discover” the subtext, which is then relayed to the
paying audience (i.e. we insto/retail chumps who buy shares) as their
considered analysis of the situation. Hence we get “ABX turning a corner”.
We get “the giant is awakening”. We get “time to be on”.
Pure style over substance, pure neoliberal playbook. What could possibly go
wrong?
Suffice to say that I was less impressed by Barrick than
with Newmont last week. To ABX I say “Where’s the beef?”.


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ABX CEO Thornton, who came to the company after a stint as president of a finance company called Goldman Sachs,  is a product of his background. Squid is what squid does.

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