News isn''t so bad despite poor results at auction


1:40a EST Sunday, November 28, 1999

Dear Friend of GATA and Gold:

Here are a few short items of possible interest.

* * *

First, a friend of GATA advises me of something that
might have been misleading in my essay the other day
about the financial analyst Steve Kaplan of

I remarked that anyone who has been taking Kaplan's
advice about selling short his favorite piece of
"Internet garbage," EBAY, above 100 would be facing a
lot of margin calls, since EBAY has just risen to nearly
180. I'm told that Kaplan has advised against selling
anything short on margin. Good idea here, as it turns
out. Of course my larger point remains: that Kaplan's
advice on EBAY has been a loser for quite a while and
lately is so much a loser that it might begin to worry
someone with pockets as deep as a Rockefeller's.

Of course this is not to say that Kaplan's call on EBAY
won't turn out right eventually, if only much as the
stopped clock that is right twice a day. I too am
astounded by the market's seemingly insane valuation
of EBAY and other Internet stocks, and for the sake of
reality I root for Kaplan's prediction to come true.

But I meant to raise the issue of the timeliness of his
and all's predictions. For a prediction is no good
unless it has sufficient timeliness to make it profitable
for practical purposes. Every day Kaplan loves to quote
old song lyrics to mock the high current valuations of
the stock indexes, implying that the end of the bull
market is near. But in this he himself reminds me of
some other lyrics, those of Joni Mitchell's surprisingly
skeptical and ironic sketch of the last go-around of
"new age" nonsense back in the late 1960s:

Because of signs and seasons that don't suit her
She'll prophesy your death. (She won't say when.)

That is, with enough time nearly every financial
prediction may come true. So in evaluating predictions,
one must maintain a realistic time frame. And of course
we gold people, so much more prone to ideology and
emotion in our investments, may be the worst in the
world for that. Gold market analysts console us with
the old saying, "Better a year early than a day late."
The problem is that many of us have been much more
than a year early -- sometimes it seems like a lifetime
-- and that, like me, largely for political reasons, we're in this for as long as we have breath.

* * *

Some news on the Cambior front:


Friday, November 26, 1999

MONTREAL (Canadian Press) -- Gold producer Cambior
Inc., whose hedging program was badly burned by this
fall's gold price recovery, said Friday it will sell
"substantial gold or base metal assets."

Also, a standstill agreement executed Oct. 27 with
lenders and hedging clients has been extended to Dec.
10, the company said.

Cambior is a diversified gold producer with operations
throughout North and South America. Its holdings
include the Doyon division in Quebec.

"Negotiations between Cambior and its lenders and hedge
counterparties are continuing with a view to achieving
definitive arrangements for the orderly fulfilment of
Cambior's obligations to such parties over time," the
company said.

With the aim of selling gold or base metal assets,
Cambior's board of directors has instructed financial
advisers and management to "proceed expeditiously with
a process for eliciting offers from interested parties
along these lines."

The asset sale is expected to cut Cambior's debt and
unbundle gold assets from non-gold.

When the gold price soared to $322 US an ounce in early
October, Cambior's hedging program faced a potential
loss of $32.4 million US. It had a commitment to sell
about 900,000 ounces at $287 US an ounce, among other

Since then the price has moderated. And in late
October, Cambior announced it had reduced its gold
hedging position by 1.3 million ounces.

On Friday gold was quoted at $298 US an ounce. On the
Toronto stock market, Cambior shares closed at $1.59
each, up 20 cents.

* * *

And here are some observations from a friend of GATA.


By Frank J. McDonald
November 26, 1999

If gold is used as money, all money (including gold) is
regulated/controlled by the bankers. If it is used as a
commodity, it is not much different in its technical
behavior than any other commodity. The
professionals/commercials pretty well control all the
markets. I really can't think of a market that is
"free" -- that is, uncontrolled -- except in an
underground economy. The key point is to differentiate
between legal and illegal activities.

If one is not blinded by a fanatic attitude, it becomes
apparent that the gold market has been controlled by
the bankers, much as the dollar, pound, franc, yen, and
so forth. So why is anyone surprised? The word
"manipulate" is frequently used in place of "control,"
but the effects are the same.

It's been my experience that two cardinal rules are
violated by "unsuccessful" investors (gamblers).

The first rule is regarding advice and has two parts.
First, free advice is worth what is paid for it.
Second, paid-for advice is not worth the price.

The second rule is that markets fluctuate, thus "buy
and hold" can be a very poor strategy. The old saying
holds that no one ever went broke taking a profit.
Trading gold, gold stocks, and gold options can be
rewarding; holding on can be terminal.

There are many reasonably good technical indicators for
timing the purchase and sale of stocks and commodities;
there's no reason to fly blindly. Some gold bugs seem
to think that every gold rally is "the big one," so
they go for all the roundtrips without profits. Ditto
for silver or any other "investment." There's no room
for emotions when placing bets -- not until the results
are in.

* * *

Please post this as seems useful.

Gold Anti-Trust Action Committee Inc.