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From what I've been able to glean from the shock Broker target price of 80p published last week they are under no obligation to justify themselves other than some general observations. If this is not the case then apologies but I thought I would do my own back of a fag packet calculations to see what I came up with. Assumptions:
- price of gold to stay the same at it is over a 10 year period when expressed in GDP deflated $. I.e. it maintains its real value when measure against USD
- AISC is at 1400 $/oz and stays that way over the life of mine
- life of mine 10 years
- only published reserves of 5m exploited no further gold at Sakuri exploited
- no further exploration expenditure since resources not converted into reserves
- break up balance sheet value is $400m based on intangibles and plant having zero value at end of mine life
- the west african prospect is realistic based on high discount factors.
First we have break up value of $400m
Next we have 5m oz at AISC margin of 450/500. Given the 45/55 split let's allocated $200 oz of CEY. Multiply by 5m reserves gives you $1b
Add in the west African prospect which, depending on assumptions, is worth 300-500m - take the median - $400,
Thus 400m plus 1b plus 400m gives 1.8billion or ~ 150p per share. Not a million miles away from other broker estimates
So what assumptions did the rogue broker use? POG? - in which case all miners are impacted. AISC - the 1400 figure I use is pretty steep already. Do they have such a low opinion of the new management to deliver. Reserves ? What inside information to they know that nobody else does?
Perhaps I have missed something obvious.?
Suggestions on a postcard gratefully received ...
Think yourself lucky you are not a client of Liburam.
Poor souls.
Hi Mr Bond,
Having been unfortunate or unwise to be sucked in by Logic investments in the past Liburam seem to be a very similar type of outfit, albeit more upmarket, but nevertheless less utter shysters in slick suits, who care not a jot about their unfortunate clients.
Most likely Liburam will be counting their commission's from last weeks sale of "Snake oil" and already contacting their clients about taking a new position on the next batch!
Tibbs
I doubt that the Liberum clients will be sorry. After all, they caused a nice wave of FUD to allow them to exit their short.
As for the historical accuracy of Liberum forecasts generally? Ha bl**dy ha, one of the worst outfits around for pushing their book.
very hard to understand who to believe because on 27th of May peel hunt targeted a SP of 150 P on contrary to Librium of 80 P.
Adam,
You are quite right,they have no obligation to explain their reasoning behind their valuation, most likely this morning a number of their clients would have been knocked through their stop losses by the "gap up" on their CFD's and now be liable for trading commission, CRD in & out costs .Leverage fees and a nice loss!
In contrast Liburam will have made their commissions , CFD fees, whichever way the clients trades went!
If a client challenged them they would probably be told "Oh the market or sentiment moved against us" or "We can't get it right all the time!" "Thing to do now is get back in, open another position!".
Those clients that are still dizzy from being hit between the eyes by a Monday morning CFD slap down will probably be fooled into making the same mistake again out of desperation and some hope that the broker is on their side, so Liburum will make more commission and in and out CFD fees!
This will go on until he client has lots all their funds, their portfolio is gone or in ruins , even their home is at risk if it was put up as security against CFD leverage!
The bank lending the money will show no mercy and the broker won't care they will have hooked the next sucker!
This type industry that has been allowed to fester and propagate within the UK financial sector for far too long and the regulation of it is unfit for purpose, and rarely enforced, possibly because victims feel they are to blame, or are embarrassed to admit being taken in, the resulting misery, despair and ruination is on a far greater scale than the payday loan scams. the online Casino's,betting shops and bingo although the regulation these and and the consumer protection somewhat more effective, if victims are willing to ask for help!
But I digress, there is most probably far more to the ridiculous brokers rating than we can tell at this stage, but we are fortunate enough not to have been taken in for whatever reason, some unfortunately have been had, that will always be so,until they start putting some of the perpetrators of the unscrupulous practices behind bars!
None of these brokers are factoring in a Gold price well in excess of $2200. The sentiment a move like this will propel the PM miners much higher.
Quite so Auson,
But the brokers don't care because so many traders want to be in and out in a day to avoid paying leverage costs or being knocked thru their stops!
Excellent post Tibbs, it really is a corrupt world where money is concerned,hope all is well,keep up with your posts it would not be the same without you. G. L. A.
And I thought I was a cynic but Mr Tibbs you've outdone me!
You post a hellish dystopian picture of people fleeced to within an inch of the shirts on their back just because they lack the capacity or tenacity to think and act independently. I'd like to think you exaggerate but maybe not. You never here about this side of investing. Only the winners!
I hope I never join this particular madding crowd....ouch!!
Hi Adam,
If only I was exaggerating, but I speak from my own experiences and from other's whom I have tried to help recover some of their losses and more importantly their self respect and confidence after they have been encouraged down the same path.
I once used a broker who was a really decent chap and over the years became a great friend, Peter had principles that he abided by, he made a good living, but he never to my knowledge took advantage of his clients, he always acted in their best interest, even if it meant turning down a commission.
But Peter retired, times moved on, as did technology and the way we invest ,no more sitting in on that old leather settee on the other side of Peter's desk enjoying a glass or two whilst looking through various papers and company reports deciding which might be worth buying or selling, then if we weren't decided off to the pub to enjoy some real ale and put the world to rights!
Unfortunately I made the mistake of being too trustworthy with the new type of brokers on the block now, cost me a chunk of my portfolio and my health at one point, but I decided to turn a negative situation into a positive one by using knowledge gained from the experience to my advantage and to help others avoid the same pitfalls, or if they had already fallen in then to help them get out again!
In general, certainly on web forums people are more inclined to talk about their trading prowess or investing success than their failures. understandable I suppose, after all they can be whomever they want to be on a forum, real life as we know is quite different.
The web is a marvelous thing when it is used for the good, but unfortunately it is also a marvelous thing to use for the bad!
A broker is more likely to consider the credibility of trading advice they offer a client sitting opposite them than a client they have never come face to face with on the end of an internet connection !
Tibbs
Hi Adam,
You mentioned trading success, think on this -
Trading is hard. So hard that recent data disclosed by trading platforms show that, on average, less than 1 out of 4 retail traders make money.
Outside of the U.S., forex is commonly traded by retail traders using Contract for Differences (CFDs).
If you’re not familiar with CFDs, a CFD is a contract entered between a trader and a CFD provider. CFDs allow traders to speculate on rising or falling prices in an underlying currency pair (along with other underlying markets like indices, shares, commodities, and crypto).
Due to the recent measures adopted by the European Securities and Markets Authority (ESMA), companies that offer CFDs to retail clients are now required to display a “standardised risk warning, including the percentage of losses on a CFD provider’s retail investor accounts.”
Basically, trading platforms are forced to be more TRANSPARENT and now have to disclose what percentage of their clients are losing money.
At the bottom of each CFD provider’s website, they display a message that looks something like this:
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. X% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
He MrTribbs
Thanks for a great thread and I agree with everything youve statec.
My first broker was a chap called Peter ...youre not from the cheshire area are you....
I used those Brokers just to buy penny puts....
I am somewhat surprised and bare with me if i am out of order here! that a guy as sensible as you still uses a brok though...
When I retired the firm arranged for us to meet up with one of these so called finance houses....
They would have took the lump sum...liquidatec my entire portfolio ...and I reckon id have been 5% down straight away...hence I do my own thing...
Either way keep up your brilliant posts my freind
ATB
George
Apologies for bad spelling....Im outside with a poor signal I guess..but hopefully you got the jist ..
Hi George,
No problems with the spelling, in general chat I supported the request for an edit facility (possibly timed by 5 mins from orig posting) that would prevent changing posts in hindsight.
As far as I know peter was'nt from Cheshire, coincidence though two brokers with integrity!
You do well to post as you do on a Smartphone, neither my wife or I choose to use one, I have a couple of laptops and my wife has Apple Imac's, but both of us refuse to become smartphone addicted or social media slaves, we both prefer conventional flip phones that slip into the pocket.
Peter my old broker taught his clients about the markets as part of his service to them, you don't get that now from most brokers!
I gave up using brokers after my brush with the ones who got their hooks into me after Peter retired, you were so right not to have anything to do with that shower who tried to get hold of your portfolio and lump .
sum, what a nice little earner that would have been for them!
If any of these brokers and investment companies were so good then why aren't they all using their own advice to become multi millionaires themselves instead of trying to get paid to take risks with clients money?
Tibbs
I've much of my professional life consulting to IFAs and brokers albeit from a compliance/accounting/operational perspective and have seen how inept their operations can be. Perhaps that experience has inoculated me against seeking professional advice.
If you want a job done well - do it yourself. Or as Mr T puts it "If any of these brokers and investment companies were so good then why aren't they all using their own advice to become multi millionaires themselves instead of trying to get paid to take risks with clients money?"
Or as Cicero put it all of 2000 years ago - qui bono?
Tibbs and adam
No its no smartyphone for me just a android tablet....
Got another one for you both....
A member at the golf club having retired threw several hundred K at the Woodford funds ....he new I managed my own portfolio but kept braging about how well the funds were performing ....I recall him saying im 38k up in one of them and subscribing for the Patient one.....after a couple of weeks.... hey he said im up in this one too.
To the point I felt the old FOMO cross my mind .......
But I said to him..hang on your 38% up in less than 6 months .....what level of return are you looking for / or be happy with .....Personally i would crystalise those gains mate......
After the funds demise he stated
1: That he got out 2 weeks before the suspension of the funds
and then some 6 months later
2: That his name is added to those seeking recompense for their losses
Suffice to say we dont talk a lot about trading right now
Apologies MrT off topic. Tomato ketchup is coming to the UK post Brexit. Happy days!!!
Take care Mr Zambian, since the red sauce could brink you out in a rash!
https://www.channelmum.com/a/tomato-ketchup-preservative-causes-horrific-allergic-reaction-in-18-month
https://www.dailymail.co.uk/health/article-7494549/The-sauces-marinades-contain-TEN-TIMES-salt-concentration-sea-water.html
I hope Boris, Jacob Rees Mogg & Farage put plenty on their chips!
Hi George & Adam,
Thank you for your posts today, fantastic, reminded me of some of the times past on this forum!