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The book fortunes formula discusses the optimal trade allocation - the Kelly formula.
Essentially if your allocation is over 20% you better be pretty confident you understand why the market doesn't love your stock.
Good questions.
The only reason I invested in JGPK was because I think it's worth many multiples of its current price - large margin of safety. As discussed, JGPK's liquidity issue can be fixed - a better stock exchange, etc... E-commerce is hot and growing, etc..
I believe the stock market is priced high now - you can look at Shiller's CAPE, etc. And there are companies like Apple that have an intrinsic value much greater than current price. I believe there are good deals, but you have to really do your home work and look long-term. Buying individual companies carry additional risk over an ETF. I once bought an oil stock that looked unbelievable cheap. Well, come to find out all the accounting was made up. Luckily I didn't own much, and it taught me an important lesson - never place too much money (more than 5%) in any individual stock - look at Enron. Many stocks are cheap for a reason. Also, markets can be irrational for long periods of time.
Currently the supply of oil is way more than the demand, but oil prices in the last week are going up - deviating from supply/demand fundamentals. Why? Because traders not fundamentals are driving the market. People and market psychology drive markets, not math formulas - read the book when genius failed - a hedge fund bankrupted by a bunch of MIT PhDs and Nobel prize winners. Most hedge funds can't beat the S&P500 over a business cycle. You have to be a genius to copy Buffet, and need to know nothing to just buy an index fund from Vanguard. For 99% of people, the index is probably the way to go.
Why would anyone want to manage other people's money? I have friends earning $500K plus managing mutual funds, hedge funds, etc. Personally, it wasn't anything I was interested in.
If you want to work managing people money it helps to be a certified financial planner (CFP) and/or a certified financial analyst (CFA).
While getting these designations like an MBA (finance) may not make you a better investor, in general you need them to get a job managing other people's money.
My 2 cents...
I thing reading every book on Warren Buffet available helps. Ultimately, I think putting most of your money in balanced low cost ETFs and mutual funds is wise. I like vanguard life funds - set retirement date and the stock/bond ratio automatically re-balances.
Always important to remember, most mutual fund managers can't beat the market indexes.
No, I didn't hear about it.
Interesting, thanks.
An MBA (finance) helps you better understand the WSJ Jargon. Understanding financial statements and valuation of businesses, I think is important - the fundamentals.
I listen to Moe Ansari's podcast daily. He has over 38 years of trading experience and he goes through his trading logic. I think having the right framework is critical, so your not overreacting (or trading) using data noise. Conversely, you should be reacting to meaningful movements in the market - not in the hold and hope mode - correctly interpreting the charts.
In the end, like most things in life, the best way to get better is to practice -using a nominal amount of money. In trading, being able to ignore your emotions is key.
Hopefully that helps.
An MBA helps if your in your early thirties or late twenties.
If older, look for a good three plus class certificate program (finance) from a top school like Harvard, Stanford, Chicago,...
Chemical engineer, MBA (Finance).
Oil and Gas Acquisitions, reservoir asset management. And most importantly, manage my investment portfolio. A few years ago, I took a private company public - road shows, etc. My real passion is finance, but didn't want to travel constantly.
Yeah, I started my career as a commodity trader, so I know a lot about trading stocks, etc. I still trade some liquid securities... Why someone would try to day trade JGPK is beyond me. As stated many times, I think this company is really undervalued. I calculate just its US location network (without the software) is worth over $1 per share.
Looking forward to the next earnings release.
Yeah, someone most likely fat fingered the trade. I am just happy it wasn't me. Lol.
March 18th is the next earnings announcement.
This year, I am really hoping JGPK moves to the Nasdaq to increase shares outstanding, liquidity, and valuation metrics - going from less than $0.25 per sales to something closer to their peer group ~$3.00 per sales. This would place JGPK's share price ~$8.40.
I am amazed that some investors are trying to day trade JGPK - a stock that lacks liquidity due to only ~5 million shares outstanding. To me, either your in for a minimum of several years or you don't buy this type of stock.
Fingers crossed, looking forward to reading the 4th qtr financial statements!!
Yes, I am really excited about all the opportunities and looking forward to seeing the 4th quarter financial statements.
5 shares sold 2 times... heee heee.
Someone needs a financial advisor!
http://www.eia.gov
Updated Eagleford report
There seems to be a disconnect between how this company is trading and its intrinsic valuation. I am out.
Yeah, 8,600 shares sold for $0.64/share to $0.62/share.
I am a big believer and truly enjoy inefficient markets. ??
Not sure why anyone would sell at $0.70, but thanks!
The graph comparisons show the peer group symbols - X axis. I used to build these types of graphs, so that's how I know.
Not true.
Comparison to Peers:
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTYyODY4fENoaWxkSUQ9MjYyNzY1fFR5cGU9MQ==&t=1
I was involved in developing many of these oil fields.
It's both, compare its drop to its unhedged peer group - much more.
Getting hammered due to ceo's messy divorce.
Unless you have money to burn, I wouldn't buy any more of these OTC energy stocks. My guess is many will not make it another year - which is essentially stated in the audit report - going concern issues.
Many good buys now - WRES, CVRR, Carizzo, Continental - trading at big discounts and will be around when these prices recover.
This and WRES - trading at 0.5 of book value!
Trading at 7 times earnings and $0.26 times sales!
Make that mispriced it.
This stock shouldn't be dropping with oil price since it only refines oil - it's not a producer!
I think the market has misprinted it.
Yeah, I agree. I am amazed how discounted some of these high quality companies are. I am loading up on some of the best energy value plays.
In 1-2 years from now, I am betting $80/bbl plus oil price.
Most likely just people taking loses for taxes today.
This low price proves financial markets are not efficient.
Exhibit A
Maybe actually worse than Vegas - in Vegas you at least get free drinks when playing the tables and slots.
Yeah, I feel your pain. I also just have a small position. I mainly bought just to follow some small O&G companies.
It's unfortunate many aren't aware of the risks of owning these OTC small stocks. The odds aren't great even with $100 plus oil price. The pink sheets reporting requirements are much lower than on the Nasdaq. As stated many times, think of it as a lottery ticket - don't be shocked when you don't win - this is Vegas money.
I think there are some really good O&G investments available now like WRES, EOG, Continental Resources, Carizzo, ... If your going to speculate on these high risk companies you better have at least 20 in hopes one or two payoff big.
I have absolutely no idea what is going on with STTX right now. Hopefully they can make it through these low prices.
Just my 2 cents.
At these prices, I think WRES is a good acquisition target. The pieces are worth more than the trading price.
Yes, I agree.
This partnership will enable JGPK to increase its profit margins, add more customers, and low its risk.
I like WRES as a value play. It's currently trading at $0.5 of book value and it has really good oil/gas hedges.
The book value is over $3.50 per share, and it's trading at ~$1.71 per share.
Hopefully STTX can make it through these low oil prices. WRES is very strong financially.
Yes, the price of natural gas is lower, but WRES has good gas price 2015 hedges and the Breakeven for gas is about $2 per MCF.
Under current oil/gas prices WRES should be trading at more than book value (more than $3 per share) I think the market way over reacted on this one. It's currently trading at ~0.5 of book value. Huge opportunity!
I could be wrong, but this looks like an arbitrage opportunity.
A market capitalization valuation way below its underlying hedged oil/gas price.
I am interested how numerically someone gets to $1.65 per share valuation. I have been doing this a long time and I don't see it.
This is consistent with my analysis:
http://m.seekingalpha.com/article/2776115-warren-resources-has-more-upside
Can anyone explain with numbers why WRES is trading below $2 per share?
The Company's current hedges in place as of November 4, 2014 are as noted in the table below:
Type Benchmark Price Quantity Period
Oil Hedges
Oil Swap Brent $102.12 800 Bbl/d 10/01/14 - 12/31/14
Oil Swap NYMEX $101.67 300 Bbl/d 10/01/14 - 12/31/14
Natural Gas Hedges
Gas Swap NYMEX $3.79 7,000 MMBtu/d 10/01/14 -12/31/14
Gas Swap NYMEX $4.18 2,000 MMBtu/d 10/01/14 -12/31/14
Gas Swap NYMEX $4.27 3,000 MMBtu/d 10/01/14 -12/31/14
Gas Swap NYMEX $4.18 3,000 MMBtu/d 01/01/15 -12/31/15
Basis Swap* (WY) CIG to NYMEX $0.20 6,000 MMBtu/d 10/01/14 -12/31/14
The tangible book value is $3.61 per share - this what WRES could get if it sold off its fields. It should be trading at something above this.