Silvercorp, Quarter End, and October

by JDH on October 1, 2011

Welcome to October. Here in my corner of Southern Ontario the weather has become decidedly colder; it feels like October. Two orders of business on this brisk day: SVM.TO – Silvercorp Metals Inc., and the September quarter end.

First, SVM.TO – Silvercorp Metals Inc., as many of you may be aware, has been the subject of allegations of accounting irregularities. The short sellers piled on, and drove the price down.

I posted a special commentary on Friday, Silvercorp Metals Inc. – Profit From the Short Squeeze, where I stated my opinion that the short sellers are probably wrong, and it’s likely the stock will see a nice rebound as the allegations are disproved. The stock is already up from it’s lows, and I suspect there is more upside as more information refuting the allegations is made public, so I’m a buyer at these levels. Only time will tell if my optimism is well founded. All comments welcome.

The second order of business is the September quarter end.

All of the news reports are reminding us that this was the worst quarter since the credit crisis in 2008, with the Dow down more than 12%. Interestingly, you, the readers of this blog, saw it coming.

Back in December, as you will recall, I asked readers to provide their predictions for each quarter end in 2011. The winners for the third quarter are as follows:

JohnB predicted that the price of gold would be $1,550 on September 30; the actual closing price on Friday was $1,622.30. Congratulations to JohnB.

For the record, I predicted $1,800, so if the contest had ended two weeks ago my prediction would have been perfect. Alas, the correction over the last two weeks took me, and a few others, out of the running.

In our guess the Dow category, yellowcaked is the winner, predicting a Dow close of 10,500. The actual close was 10,913.38. Well done.

I predicted 10,000, so I wasn’t that far off, all things considered.

The group as a whole predicted a gold price of $1,558, which was better than anyone’s individual prediction.

The group predicted the Dow at 11,300, which again was closer than any individual prediction.

I guess that’s the wisdom of crowds in action.

In case you are wondering where we will end the year, you predict a gold price of $1,621, only slightly higher than we are now, and the Dow at 10,892, almost unchanged from current levels.

Interesting. Check back at the end of December to see how we did, and check back next week for more on gold, the markets, and whatever else strikes my fancy……

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