Black Sholes Model

You'll want to have a very close look at this documentary about the LTCM disaster. Really, what we are discussing is the Black Sholes model.

As a mining investor, you will want to pay especial attention to when Martin Scholes specifically mentions his family investing in gold mining companies.

The actual risk in share price rises in GBN.V is being managed through high frequency trading, in a complex formula with interest rates, or perhaps other . The money from stock sales is being funneled into an equity swap, or pool, or bond, probably containing all kinds of mining stocks.

When the risk in the stock price rising and treasury prices falling gets too great, then the formula changes to manage the associated change.

This will also explain why news only seems to come out under the most disadvantageous circumstances and mysterious stoppages. Somebody on the other side of the trade, the sell-side broker who takes your money has laid on a huge bet over a period of years that the stock price will never advance beyond a certain point. For some reason, they have control over certain aspects of the company, when and how news is released, or production.

The Risk Cartel that corners the risk in gold mining stocks is greatly alarmed at the advance in the gold price, simply because nobody has an adequate formula for currency depreciation in the context of deflation. So they execute on news against stock price advances, since treasury prices are presumed to steadily advance over time, without end.

They have lost control over the gold price, simply because the COT has become so huge on both sides of the trade. So they move on the stocks in the desperate attempt to waylay investment in gold, especially gold related assets. I wouldn't be surprised if Martin Scholes himself forms a piece of the puzzle.

The gold stocks, btw have done an amazing job at destroying themselves. But, there are a small few that are profitable and in production with room for growth. Make sure to keep this in mind. GBN.V is no longer an exploration company. AT ALL. This is a qualitative aspect that does not enter into the Black Scholes based anti-gold mining stock formulas.

http://www.youtube.com/watch?v=o_UxB6EEqWo&feature=relmfu

-F6