Easter bunny time ....again.... more schmaltz... little yellow chicks with red neck ties propping up boxes of chocolates... oh, why does it have to happen so soon after the Christmas overdose, when even I have not been able to totally eradicate the sight all those stupid fat and cheerful Santas buzzing around in sleighs wherever you go to buy a pint of milk.
To add grist to the mill I read some tripe in the ADL magazine about some new six points of whatever being propounded by Gareth Penny about whatever angle he was trying to put on ‘living up to diamonds,’ Charles Wyndham says on www.polishedprices.com.
All that I was sure was that I was reading another entry in the lexicon for bullshit.
This constant reiteration by Penny that 2009 was a difficult year is boring.
If it was such a difficult year why did BHP manage to achieve a 115% or so increase in underlying earnings?
It was a bad year for De Beers, but then most years have or have been comparatively bad to disastrous, and in comparison with BHP their EBITDA saw a fall not much short of 50%.
Life would be pretty difficult for any business if they insisted on selling their product at 20% below market price.
Blow me down that is exactly what De Beers have done again at the sight that ended last week with premiums nestling comfortably around or above the 20%.
This is from the company that set out claiming that it would sell to those companies that would maximise the rough.
In one sense they were correct, most of the sight is being sold before the sight at these premiums, at least the buyers understand which side their bread is buttered.
Boxes of goods sold to support local cutting in producer countries are readily available in Antwerp or wherever you want it delivered.
So as De Beers falls head over heels rushing to get its ship in order for an IPO, they cannot even price their diamonds.
We know that they cannot find mines, thankfully for their shareholders a fact acknowledged at last by the company as its exploration budget has been hacked to smithereens.
We know that they have an extraordinary ability to turn gold to lead, witnessed by the disaster of Venetia, now being wrapped up as some form of responsible mining so as to prolong the life of the asset, like burning a cake and claiming that this is to increase its shelf life..
I will not even mention Snap Lake.
They have ceased to be competent miners. Maybe the lure of those gigantic fees and management incentives that proved enticing when the company was privatised may lure the unsuspecting into the spiders web of the proposed listing.
Of course the funny thing is that by getting rid of the current management and adopting a BHP type model to price the diamonds, anyone would be a fool not to buy De Beers shares.
As it is, anyone even contemplating joining that merry gang might as well think about being an innocent young lad at some Roman Catholic orphanage to whom, I am sure, some holy father would offer a chocolate bunny.
