Kaiser, John

- John Kaiser (BNN Television photo)

Veteran Canadian venture stock cynic, analyst and promoter John Kaiser of Kaiser Research has published a free report with his take on the current junior resource sector bear market.

Kaiser begins with the dire financial straits of many Canadian juniors, 700 of which have negative working capital. Kaiser believes these companies will end up converting debt to equity, and rolling back their share structures, effectively blowing up current shareholders.

"Since nobody wants to provide fresh capital to pay off existing debts, these juniors are doomed to a cycle of converting debt into paper and undertaking stiff rollbacks that wipe out minority shareholders, followed by long term hibernation as shells or a refinancing that bulks up a new insider network which, courtesy of a tiny public float, can move the stock price to reflect the valuation script of whatever new story the junior adopts without interference from any but the stupidest of algo traders."

Kaiser calls the new "retail investor exemption" which allows non-accreddited investors to participate in financings of companies they already own up to $15,000 per year,"dead on arrival" for being a logistical nightmare for companies and shareholders.

Kaiser says marijuana ventures are better off as private companies rather "resource sector shells seeking a new pump and dump avenue," which we agree with.

The analyst was once again pounding the table for EMC Metals, a scandium junior company which has seen its share price rise from $0.03 to $0.10 over the last quarter after a slew of aggressive recommendations by Kaiser.

Kaiser wrote of a copper supply glut lasting until at least 2017 which will test those investors attempting to play out of the money copper deposits.

"Resource speculators can still profit bottom-fishing for advanced deposits, but it will be many years before a super-cycle narrative is actively driving a buyout frenzy."

"What I am on the lookout for are plays with conceptual potential to deliver monster discoveries. For these to have any degree of success potential they usually require extensive data collection to generate blind drill targets, which requires a deep-pocketed farm--in partner or a discovery bubble market of the sort we have not seen since the 1993-1997 discovery cycle."

Here's the link to John's piece: Understanding the Junior Resource Sector Bear Market | Kaiser Research