Rick Rule - King World News

Rick Rule has a very interesting comment and a quote from John Kaiser about Venture Exchange stocks and the people who run the companies.

King World News

The takeaway is that if you were invested in any Venture Exchange stock, you need to have a company in production with a growth profile going forward. And it will have to show a profit, free cash flow, and I would say myself that it will be required to pay dividends to change the assumptions in the Black Scholes options pricing model.

I would add that you need to have a company exposed to gold, as the Net Present Value will increase parabolically as short term interest rates decline.

One of the assumptions in the Black Scholes options pricing model, where you parry any money coming into a stock against a rising trend in treasuries, is that the exchange on which they're traded such as the Venture Exchange becomes a variable in determining the stock price. If all the stocks are depressed, the likely your stock price will be automatically depressed along with the exchange, regardless of the fundamentals.

So Black Scholes options pricing models used in a delta hedging strategy will accumulate a massive leveraged position against an entire asset class, most stocks which will fail if they have not obtained financing, or do not have sufficient cash. The commercial traders who have set up this kind of leveraged trade finally cash out. This is where almost all of the real money is going, and you can see they are about to win big.

Thus if the exhange itself underperforms, then GBN.V itself is likely to underperform. However, traders successful in trashing other stocks will be obliged to buy back every last stock they sold in GBN.V without first owning any. Substantially all of the "churn" in GBN.V stock is algorithmic trading in a delta hedging strategy.

It looks like the Venture Exchange itself is becoming PERFECTLY inversely correlated with the 30-year U.S. Treasury Bond price. The chances of this happening by accident is zero.

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-F6