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On the 8th January 2016, VCL published its monthly note. This included the publication of VCL's CEO, Martin Wood's monthly comment, as well as this month's five resource stocks and one technology stock of interest, which can be seen on the Short Note page, plus a topical cartoon.

"Tech tock, tech tock the tech clock doth run down.

The current media attention being given to various cryotech companies is in my opinion the signal that the tech sector is frothy.  It signalled the last tech crash in 2000 and is all over the papers again now.  I don’t blame it as a technology, I see it as a lead psychology indicator, the tech market has gone messianic and the next step is always down after this.  Why?  Religion. 

In the middle ages the Church got rich by sitting by the beds of dying rich men and reminding them that it is easier for a camel to pass through the eye of a needle than for a rich man to pass into the kingdom of heaven.  In other words, what they were saying was what have you got to lose, give us your cash and we will give you a shot at immortality, worse case, you wasted your cash, but you’re dead so who cares.  The cryotech sales pitch is pretty much the same with less smoke and fewer dodgey outfits and choirs.

Cryogenics is selling the same snake oil with the same cruel play on human frailty and fear of death, in fact fear of death is its best salesman.  And of course users can’t slam it on Tripadvisor! A few months ago we talked about the two things needed before the resource market can rise again.  The first was the death of a major mining company with the resulting fire sale of assets at bargain prices allowing the survivors to start the process of fixing their balance sheets with some cheap assets.  This seems to have been supplied by Anglo American (not dead just poorly).  I must admit my money was on Glencore or Barrick – Anglo American who knew eh?  The second shoe is the bursting of the tech bubble to encourage “capital gain” investors back into resources.  Is it about to drop?

Happy New Year"

Martin

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