(B)(N) ABX Barrick Gold Corporation

Drama. Who’s in charge here? The stock of the Barrick Gold Corporation, which was one of Canada’s largest “gold mining companies” with a market value of more than $30 billion just last month (please see our Post, Extraterrestrial Funds (ETFs), March 2013), is down by more than (37%) this month and is trading at a paltry $18 billion and $18 per share now.

But the “fix” is in and a prestigious group of investors lead by the Canada Pension Plan Investment Board, the Ontario Teachers’ Pension Plan, and the Caisse de dépôt et placement du Québec, and also including the Alberta Investment Management Corp (AIMCo), the British Columbia Investment Management Corp, Hermes Equity Ownership Services, the Ontario Municipal Employees Retirement System, and the Public Sector Pension Investment Board – which sounds like a lot of our money, pensioners and the like, who are getting by on $500 per month after a lifetime of contributions to these worthies – is opposed to paying an “acquisition cost” or “signing bonus” of $11.9 million for a new manager because, they say, this compensation is inconsistent with the governance principle of pay-for-performance and is therefore “disproportionate and sets a troubling precedent in Canadian capital markets” (Reuters, April 19, 2013, Barrick faces heat from top Canadian pension funds).

Well, there are certainly others who might take notice of that – pay for performance – particularly if they were standing by while some part of $30 billion of our money vanished between $48 billion in 2011 and $18 billion today on the “Barrick Play” of the last two years. We were, of course, not so affected because – unlike them – we understood the “price of risk”, and we are paid for performance, and nothing else. Please see Exhibit 1 below.

Exhibit 1: (B)(N) ABX Barrick Gold Corporation – Risk Price Chart

Barrick Gold Corporation produces and sells gold and copper. The Company business activities also includes exploration and mine development and it holds interests in oil and gas properties located in Canada.

(Please Click on the Chart to make it larger if required.)

Postscript

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Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.