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9/17/13

Kallpa Securities on Peru mining

I've been asked for a comment by three readers on this note over at The Gold Report, which is enough to get me out of my reticence (and stop more mails from coming in). However, I'm not going to go into specific parsing mode and will keep it to three general comments.

1) This is a note where a brokerage talks its book, which is neither good nor bad, it just is. However, the reader needs to keep that filter in their head at all times (and read the smallprint disclosures at the end of the piece).

2) There's always this whole thing about how a Peruvian will know more about Peru than an outside observer, which is true on many things. For example, if I were in Lima I wouldn't hesitate to ask these guys where to go to get a really good anticucho. But when it comes to political risk in vast expanse of Peru that lies outside the capital city, the sad fact is that Limeños have as little idea of what's going on as people thousands of kilometres away. For sure they can fake knowledge better than the rest, but they're still pig ignorant.

3) There's a Peruvian psychological wrinkle that gets them to ignore anything that might be bad until it's too late to fix (and then plead ignorance/innocence later). It's present in spades in the report.

Anyway, there you go, job done, comment made and I did it without using a single swear word too. Go read the note.