Here is the blow by blow....

Cara on Trends & Cycles

Several years ago I interviewed the new professional management team of Crystallex (KRY) and was convinced the company was finally on the right track. I endorsed KRY until the day they fired Todd Bruce CEO in early 2007. Afterwards, KRY followers knew I was opposed to investments in that company.

I then suffered the slings and arrows of misguided souls – to the point I had to filter my email specifically to avoid the harassment.

After a major push on the stock a year ago, I went further to say this was a con. More slings and arrows.

Even people here were saying I was too close to Todd Bruce to be objective. But the fact is I never knew Todd until the day I called the company for an interview and he later convinced both myself and also a world-class analyst I took to that meeting that the company had a major high-quality resource worthy of our investing in.

All this happened before I wrote the book Lessons from the Trader Wizard and a couple years before I even considered investing for clients. I was, in fact, a totally objective party.

In December of 2009, the pressure on me from the promoters became ridiculous, so I wrote about it in the WIR. Here is the transcript:

That’s the way these things go, and have gone for decades, for centuries. It’s just human nature. What the self-anointed experts ignore are the cycles. Everything in our universe that moves has a pattern of cycles. Everything.

As someone who is knowledgeable about cycles, I understand that merely looking at a one-sided move is not sufficient data for any kind of analysis.

So if it is not analysis, you can be sure it is synthesis -- stories, in other words. Stories, you know, are told to you by people who want something.

Funny thing about stories; the promoter starts with the story while you have the money. But, listen to them too closely and they end up with the money and you have the story.

If you stick to the facts, you do not need to listen to their stories. Here is a case in point from an anon reader who was persistent in his mail to me this Friday.

The conversation went this way:

Hi Bill, I hope all is well with you. I was hoping that you might be taking another look at KRY given hugh volume last week. It appears something is happening that could have a very positive impact on PPS. What is your opinion? Investors would love to hear from you on this one.

I replied:

Sorry Anon, I don't trade (Crystallex) and have too little time to investigate what might or might not be happening there. The investors in this community at least know my feelings, so there is no need for me to write any more. /Bill

He didn’t like that:

Bill, we are so close to a deal right now. Don't you think its prudent to do a follow up for your supporters. This could be an opportunity for them to make some money. After all, you did make this your stock of the year a while back so why not take some time and do a brief report on them. Please!!! (Anon)

Getting a little perturbed, I replied:

Anon, Re: "we are so close to a deal". Are you in the company? Look, I am not in the gambling or insider trading game. If the company reports an agreement I will convey it, and that's all. I don't trust the promoter and have stated it in the blog. Enough said. I hope it works out for you. /Bill

Apparently there was more to be said by Anon, typos and all:

bill, you covered the story. i am not an insider or an employee. i am just asking you like so many who wabt to hear from the great bill cara. how can you not report when yoiu called this stock the stock of the year. how did you know at that time it was the stock of the year. your weren't in the company or an employee either. you owe an update your readers a update good or bad. come on bill put your personal reasons aside. please provide an update. (Anon)

To put an end to this nonsense, I replied curtly:

thank you /B

I think Anon was just getting started:

Bill, does that mean yes?

By then I had had enough, even wondering why I blog – and all this was a couple hours before I got into the TN_Blogger problem – so I tried harder to end it, knowing my next move was to filter future emails from Anon right into the trash basket:

Anon, pls do not write me again. /B

This was just a side play while the $USD happened to be soaring in a break-out and the precious metals were getting smashed on Friday. The goldminer ETF in the US (GDX) went on to close down -5.31% on Friday. The Canadian goldminer ETF (XGD) also crashed, down -5.29%.

But what did happen to Crystallex? I haven’t read any media releases, and won’t, but I see that through the month ending Nov 13, KRY had traded an average of 659,878 shares a day on the AMEX exchange at an average price of $0.247 – less than a wooden quarter. Then from gloom to boom as KRY traded on the Monday following the amazing total of 20,896,100, hitting a high of $0.52, closing at $0.45. Now that the sheep were ready to be fleeced again, Tuesday’s volume was a similar 20,432,400, but with the price dropping to $0.34, closing at $0.40. Seven of the next 12 sessions KRY also closed at exactly $0.40, which was near the daily high. The other five sessions had closes of $0.43, $0.41, $0.39 twice and $0.28. So there was Anon, 13 days after the moon-shot, watching his or her stock churn an average (on AMEX, not the TSX, which is more) of 5,016,936 shares per day with an average hi-lo-clo of $0.42 $0.35 $0.40. This is called distribution, and so Anon, frightened with the prospects of a soaring $USD and crashing price of gold, wanted me to help the take-out.

I am not an idiot or a take-out artist. I’ll leave the sales role to CNBC/Cramer/Bloomberg and stand by with amusement.

Unless there is a deal at Crystallex that the insiders know about (and insiders always have loose lips), which is going to be announced any day now, and Anon really and truly meant it when he called me “the great Bill Cara” (vomit), then this is one stock I think is headed much lower.

That’s just me, seeing things through eyes that have aged some, and still with my wits about me. Then again, maybe Anon was giving me a tip on something really exciting and wanted me to pass it along to the world. Hahaha.

Anyway, Anon wanted an update “good or bad” and there it is. I try to please.

You can’t make this stuff up. When I was in the business, the only thing missing was the envelope full of stock certs in bearer form they tried to slip me under the table.

I could be wrong. Time will tell.

But it was last summer when I became concerned again as some of your were saying you were still involved and interested. I opined that shareholders were being misled.

June 7, 2010

http://caracommunity.com/content/bill-cara%E2%80%99s-blog-june-7-2010

No matter. Here is the outcome to date: the one I told you I strongly believed would happen.

Experience teaches. I’ve had my share of experiences.