The Big Score is about the discovery of a very large commercial mine in Newfoundland. Canada. The story is also about a penny stock promoter who founded the mine or staked the grounds where the ore was and is been mined. The other part of the story is the large profitable operator of mines, because finding a mine and operating a mine are two different things and no penny stock promoter wants to operate. The Big Score was written by Jacquie McNish, Doubleday, Toronto, 1998 and the names involved were Robert Friedland, Inco and Voisey Bay. At present Mr. Friedland is still involved with trying to find mines, Inco is owned by Vale and the ore at Voisey Bay is being mined.

The Big Score has many lessons for investors – one is it is very rare, but every once in a while the penny stock promoters are correct. The reason is although the large mining companies have every advantage, you never quite know what is under the earth until you drill. How the earth was formed is still a mystery and many theories are needed to discover what’s under the earth and if there are minerals in existence that justifies a mine. In most cases the answer is no. There maybe gold in many hills but not enough to mine unless your costs are very low or almost nothing. What is good for an individual is not that good for large companies.

Another lesson for dividend providing companies is in the case of Inco, they were operating under many myths. At one time Inco held over 90% of the market for nickel, they were a low cost provider and were very profitable. The profitability was decreasing as was their market share, the only thing increasing was their costs. One of their strategies was to buy and sell including taking delivery on the commodities market or being the middle man and still making money. The good thing was as when their customers demanded more nickel, the company took more deliveries, when their customers wanted less, Inco took fewer deliveries. To the casual viewer from the outside, Inco looked like it was still a market leader, when it reality it was quickly losing market share. It is important to separate myth from reality when buying your investments. Whatever the reasons why you wanted to own the company besides it pays a dividend, are the beginning of the questions you will want to ask to ensure what you believe is actually true.

There are more questions than answers, till the next time – to raising questions