I agree with the premise and logic of your article. I wonder if Athabasca is the right benchmark measure though because as I recall it IPO'd at an inflated value in 2010 right before the peak of the oil/commodity bull market.
Yes, but the IPO was a secondary offering by the then shareholders and none of the proceeds went to the company. They were cashing out and management did not use the $18 trading price to raise equity to clean up the balance sheet, and the fear of dilution saw the shares tumble. I chose ATH for the article after reading a lot of comments that applauded the 2023 performance which in context was more of a dead cat bounce than good decision making. A classic case of good assets and weak management in my opinion.
I would say ATH might even be a good long term buy now, no debt and billions in tax credits. They seem to have their oil sands doing well too. The price of oil and a 2 year delay on TMP might impact them BUT they can't control that. PEY with low NGas price is not great. Likely better that CR or BIR, but still.. they all do great with $90 oil and $4 ngas
I have no doubt ATH will be a target for a merger and has valuable assets. I am unimpressed with management, eschew investments that depend on a transaction to return income to me, and just buy and hold companies I see as well managed, well financed and likely to keep growing in line with the economy.
While I mostly agree with what you say timing means alot and perhaps staying away from resource stocks entirely is good. Buffet does like OXY, but what about great companies like Nvidia or Cisco, when is a good time to buy. Fwiw I did pick up shares of ATH at 17 cents, BUT sold most around a dollar:)
Great buy, not so great sell? Not my cup of tea. Resource stocks can be acquired when trading below their value as an option using Black Scholes to value reserves as a "real" option and ignoring fluctuations in commodity prices, so long as they are managed competently and prefer to pay dividends with excess cash than buy back stock. Transactional investment benefits brokers but punishes traders as a class despite some of them coming out ahead.
There may be few investors who bought Peyto at issue and never sold. Darren Gee, Don Gray, JP Lachance and few others come to mind. If you believe there is a time to buy and a time to sell, you join the masses of investors whose returns depend on finding a greater fool and as a group your brokers make money but you lose money. I don't even try to time the market since I know I would be poor at doing so but I am sure you must be good at it or you wouldn't advise it. I bought Peyto at $1.04 per share Cdn and I may eventually lose my capital but in the meantime I will receive a return many times my investment in dividends.
Get a new adviser, use common sense, and don't bet that a natural gas price of $10 to $15 a gigajoule will last long when supply costs are in the $2 to $3 range. Warren Buffett, Peter Lynch, John Templeton, Stanley Druckenmiller and Benjamin Graham demonstrated that buy and hold works and trading does not.
I agree with the premise and logic of your article. I wonder if Athabasca is the right benchmark measure though because as I recall it IPO'd at an inflated value in 2010 right before the peak of the oil/commodity bull market.
Yes, but the IPO was a secondary offering by the then shareholders and none of the proceeds went to the company. They were cashing out and management did not use the $18 trading price to raise equity to clean up the balance sheet, and the fear of dilution saw the shares tumble. I chose ATH for the article after reading a lot of comments that applauded the 2023 performance which in context was more of a dead cat bounce than good decision making. A classic case of good assets and weak management in my opinion.
I would say ATH might even be a good long term buy now, no debt and billions in tax credits. They seem to have their oil sands doing well too. The price of oil and a 2 year delay on TMP might impact them BUT they can't control that. PEY with low NGas price is not great. Likely better that CR or BIR, but still.. they all do great with $90 oil and $4 ngas
I have no doubt ATH will be a target for a merger and has valuable assets. I am unimpressed with management, eschew investments that depend on a transaction to return income to me, and just buy and hold companies I see as well managed, well financed and likely to keep growing in line with the economy.
While I mostly agree with what you say timing means alot and perhaps staying away from resource stocks entirely is good. Buffet does like OXY, but what about great companies like Nvidia or Cisco, when is a good time to buy. Fwiw I did pick up shares of ATH at 17 cents, BUT sold most around a dollar:)
Great buy, not so great sell? Not my cup of tea. Resource stocks can be acquired when trading below their value as an option using Black Scholes to value reserves as a "real" option and ignoring fluctuations in commodity prices, so long as they are managed competently and prefer to pay dividends with excess cash than buy back stock. Transactional investment benefits brokers but punishes traders as a class despite some of them coming out ahead.
There may be few investors who bought Peyto at issue and never sold. Darren Gee, Don Gray, JP Lachance and few others come to mind. If you believe there is a time to buy and a time to sell, you join the masses of investors whose returns depend on finding a greater fool and as a group your brokers make money but you lose money. I don't even try to time the market since I know I would be poor at doing so but I am sure you must be good at it or you wouldn't advise it. I bought Peyto at $1.04 per share Cdn and I may eventually lose my capital but in the meantime I will receive a return many times my investment in dividends.
Get a new adviser, use common sense, and don't bet that a natural gas price of $10 to $15 a gigajoule will last long when supply costs are in the $2 to $3 range. Warren Buffett, Peter Lynch, John Templeton, Stanley Druckenmiller and Benjamin Graham demonstrated that buy and hold works and trading does not.