“There is something (here, perception, ideas, theories) and a function of something (here, a price or reality, or something real). The conflation problem is to mistake one for the other, forgetting that there is a “function” and that such function has different properties.” – Nassim Taben, Antifragile
People often look at something and determine the value. They can be right or wrong and not know why. The physical characteristic of the subject can bear no resemblance to its function. I think this is a pretty powerful statement.
The function of something can be completely different than the subject and inform the observer of what is relevant. In our context, the something is drill results. The function of something is the price action. Great results can lead to great price action or none at all. What does the price action tell us? Maybe the something isn’t that important. Maybe it’s a function of the jurisdiction, operator, the team (f(grade, team, jurisdiction)). If we look at comparatively positive results maybe we can learn something about the other variables in the equation.
I’ve continued the analysis of 2018 exploration results, looking at average price returns after the release of significant drilling results. In the chart below you’ll see the price return in daily increments after the release of exploration results.
I’ve sorted the data by the return two weeks after the information release. The range of results is quite large. Moosehead, Dixie Lake, Fenelon, Tatogga, and White Gold saw share price increases continue for quite a while after exploration results. Other properties not so much. So what distinguishes these properties from the rest? If there’s a steady stream of exploration results than this could propel the stock higher. Maybe it’s the the quality of release?
The chart above shows that there is a weak relationship between price returns and
What was the function that resulted in Sokoman Iron Corp’s share price appreciation??? Could we have predicted it?