Rainbow Resources (RBW, TSX-V) enjoyed a powerful week, finally breaking out (as predicted) from a flag formation and hitting a high of 21 cents yesterday before closing at 20 cents. The jump in weekly volume to 1.78 million shares – the best weekly volume since the stock first went public a year ago – is extremely encouraging and bullish. Below, John has two updated charts on Rainbow with Fibonacci numbers as well.
We see a lot of things in Rainbow we like, from the people involved (including well known Calgary entrepreneur Bob Libin) to the company’s West Kootenay land package to the share structure and RBW’s stated desire to go after additional opportunities in the Gold and Silver exploration space. This certainly seems like a young company on the rise.
David Johnston, who was named President of the company yesterday (he headed up privately-held Braveheart Resources which was acquired by Rainbow last fall and became a director of Rainbow recently), will get his first major test as President at the Resource Conference in Vancouver (Sunday and Monday) when BMR puts him on the “hot seat”. Going forward, we are going to be much more aggressive in our interviews with company Presidents and CEO’s as we put them on the spot with tougher questioning (call it interrogation if you will). The key to making money and finding the best opportunities in a market like the Venture Exchange is making sure the person running the company has the character, the experience, the ability and the game plan necessary to drive the business (and the share price) forward. In most cases with these CDNX companies, that is simply not the situation. In fact, it’s incredible how reckless some CEO’s can be. Many are in the wrong business – they are wealth-destroyers, not wealth-creators. Many, surprisingly, have no idea how to properly run a business, deal with shareholders or handle the market. We have seen many examples of that over the last year. So our trust level is low and the bar is high.
We have performed a lot of due diligence with regard to Rainbow and we’re very confident this is a fabulous opportunity, but Johnston will definitely be put to the test and we will grill him hard for our benefit and our readers’ benefit. We will fire challenging curve balls at him, not juicy pitches down the heart of the plate, and he (and Rainbow) will be evaluated on how he responds.
RBW Chart #1
RBW Chart #2
Note: Both John and Jon hold positions in RBW with Jon increasing his position Friday (Terry does not hold a position).
BMR – Going forward, we are going to be much more aggressive in our interviews with company Presidents and CEO’s as we put them on the spot with tougher questioning (call it interrogation if you will).
Bert – So much as i appreciate what you intend doing, being aggressive may not be the ultimate, in
gaining the honest to goodness truth of it all. Some of those so called CEOs’ are indeed reckless
& know how to spin a good story. Need i remind you all of one particular CEO, who has so far let us
down. No doubt, you are high on RBW but you know what, i have not as yet taken a position. My trust so
far, only extends to BMR & not beyond & it’s because of my lack of trust in the so called dudes’ out there.
For those who may be interested, i am long on CEV, SGC, HRC, DVV, & IGO… IGO was given to me, as a result
of New Gold buying out Silver Quest… R !
Comment by Bert — January 21, 2012 @ 1:48 pm
Intelligent comments as usual, Bert, thank you…there is no shortage of clowns running CDNX companies…some of them actually have great assets (excellent properties or a promising technology asset) but are incapable of pulling everything together – some have good intentions but they regularly trip over themselves, lack good communication or business skills, or have no market savvy…what I see and hear a lot as well are Presidents and CEO’s with egos…they are micro-managers who don’t listen and can’t delegate or surround themselves with the right people…some treat shareholders – the ones who pay their salaries – with absolute contempt…for a CDNX company to succeed over the long-term, it must have quality people at the top who have business smarts, who are focused and driven, who understand the capital markets, who know how to communicate, who have put excellent assets into the company, and who can tell the company’s story in a powerful way…those are important criteria…most companies simply don’t measure up…the ones that do offer huge potential rewards…
Comment by Jon - BMR — January 21, 2012 @ 2:26 pm
Thanks for your comments Bert and Jon. A video interview can be beneficial for those that can read body language (facial expressions) – George Bush is probably one of the easiest people to read in the world and Oliver North the hardest, if not impossible!
Martin put forward a pertinent question yesterday, hopefully it will be answered in the interview: :My question is if the mineralisation is at surface with those kind of silver grade, at international for instance, why wasn’t mine before??”
Enjoy the weekend. 🙂
Comment by Andrew — January 21, 2012 @ 3:03 pm
BMR
RBW sounds just like VGD all over again?
Hope you guys are right about this one.
good luck
Comment by GREG H — January 21, 2012 @ 5:25 pm
Perhaps a question to put to David Jonestone would be to make sure that no kryptomite mineralization is close by as that might be disasterous for the rbw investor relations guy. I would think that a key component of their area play is the fact that the land position was privately held. This is a very positive sign. richard
Comment by richard — January 21, 2012 @ 7:55 pm