Why The World Is Backwards

This post is in honor of the 10th anniversary of Bre-X.

I am going to go on a bit of a rant. It makes me so angry to see how difficult it is for US investors to invest in hedge funds. Not only that, but the mis(education) of investors to the riskiness of hedge funds is a tragedy. Foreign govements and investors are decades ahead of US investors in this regard, and I have written plenty on the foreign listed hedge fund industry in the past.

The fact that individuals can logon to their online brokerage site and buy dog-sh!t penny stocks that are 10,000X more risky than most hedge funds or FOFs. Ditto for OJ futures on 10% margin, ditto for stock fraud which is probably 1000 times larger than all of the hedge fund blow ups combined. How about an example?

My girlfriend and I were driving to breakfast the other day (Auntie Em’s in Eagle Rock which is amazing btw) and we passed this billboard.

How is it possibly legal for a pink sheets company trading at $.05 to advertise their stock symbol on a LA freeway, but a hedge fund manager cannot even let it slip that he even runs a fund? Out of curiosity, I pulled up the page for the company, Copper King Mining. Not only is the CEO wasting shareholder money advertising their stock symbol on billboards, but they hired Peterman from Seinfeld to be the spokesman for the company! Peterman!!

A few gems from their website:

Over the next five years, Copper King is projected to extract:

230,200,000 lbs. Copper
115,100 ounces Gold
11,510,000 ounces Silver

Based upon current market prices, the value of these minerals would be:

Copper: $893 M
Gold: $112 M
Silver: $234 M

It is estimated that with current proven reserves Copper King could process 2400 tons or ore per day for approximately 10 years producing almost $282,100 per day of revenue or $102,966,500 annually. Of course, proven reserves are a small fraction of what is believed to be in the Milford Mineral Belt.

Unbelieveable. And just when I thought my billboard was a unique find, how about this press release:

Copper King Mining Corporation (Pink Sheets: CPRK), under the direction of its PR Firm Alexander Lindale L.L.C., has installed 55 full-sized billboards in LA County with 24 to follow in Utah. The billboards invite people to come and view the website for Copper King.

In conjunction with the billboards, there will be the release of a several-minute video news release on Copper King Mining that will be sent to several thousand TV stations via satellite uplink, and several thousand radio talk shows, newspapers and trade magazines. The purpose of the advertising blitz is to bring public awareness to Copper King Mining, a major employer in Milford, Utah, and provide an educational experience in the history and development of copper in the United States.

Truly depressing.