Replies to post #1174 on Daybreak Oil and Gas Inc (DBRM)

[downsideup]

LOL!!

Why do you even assume that whoever it is that has been selling shares here in the last year or two IS taking a loss by selling shares at current prices ? I think that is not likely, given the nature of the patterns I see in the trade. I do think the pattern you see pretty well defines normal in the nature of the range in market noise that is fairly typical in any stock, given the fact that markets simply are not particularly efficient. That DBRM has been lightly traded, well below most investors radar, easily explains the traversing in the range in the period, given the nature of changes in the markets in that time frame.

PP buyers selling shares recently would be taking a loss... and it seems likely there would be some of that, but, given how few of those shares there are in the trade, they CAN'T begin to account for the volume that we see ? And, those PP holders who sold shares before August of 08 wouldn't have a loss ? Sure, "they can't", etc., although given the pattern I'd expect that at least half, if not most, did ?

As you've pointed out, that scenario you've postured isn't very likely, or even possible, given the very small numbers of shares in the turnover in the volume we see here, and the very small number added to the outstanding, over a period of some years. This is a very LIGHTLY TRADED issue in that entire time period... so it is the LACK of volume, not any unusual number in excess, that defines the patterns in the trade.

Obviously, as in any other issue, some large number of the shares in the trade over the last few YEARS are being recycled. MM's don't work for free, or generally opt to lose money in their trading... so we're obviously not seeing on balance volume that is a simple linear shift in shares moved only from one set of hands to another... rather than a normal directional rotation in the market, that allows MMs to make some $$$ on the rotation in the trade, whatever the direction in the trade. Might be useful to compute what portion of the volume in the trade HAS to be rotation... sufficient to make market making worthwhile. Not rocket science.

Then, start with the SEC filings and map out the time lines in the # of shares that are outstanding, in terms of when they were issued and at what price, then see what there is that is actually in the float... Yahoo says 34.22M, and you can't really avoid the facts, including, in that, what the nature of the LIMITS are ?

Why is it, do you think, that average volume remained flat until June of this year... and has increased since then ?

Shares are still a commodity, and trade as one... so the CCI shift you see in March 09, on a two year weekly chart, correlated with the bottom in the market then, means what in terms of change in on balance volume ? A series of increasing peaks in CCI while holding above prior minima ?

I won't disagree that the patterns you see into February of this year, whatever the drivers were, suggest the MMs focus in that period was an expectation of surplus in supply and a direction in the trade that shows price suppression by on balance selling... defining a trade based in expecting more shares were coming to market in the future then there was demand that was expected to exist for them. I also don't see a reason in that time period, given the drivers in the larger markets, that the balance in supply and demand should have shifted to a surplus in demand.

The shift taking place since then ?

You could explain the volume you see as selling by PP holders and those who received shares in payment for services... only if there was no other trade in the shares at all in that entire time period... no MM activity, and no investors here watching and accumulating those others are willing to let go.

What I note that I find most interesting about DBRM currently is the growing market interest, paired with ongoing long term shifts in the larger market fundamentals, in oil prices and stocks, paired with the continued level of performance proven by the company... and the relative LACK of shares available now at the prices they were available only a short while ago...

With even minor increases in interest on the buy side from here... which the changing fundamentals support as likely... I think the fact of the shift in availability will out "soon".

I'll happily buy more $0.10s if anyone wants to sell them to me. But I don't expect I'll have that many more opportunities at them.

[downsideup]

What was the original issue price ? I don't know. I do note that the charts show that back in 2001 it traded for $0.01 to $0.02 a share the entire year before leaping up to $0.04. I'd like to think if I had owned it all the way from $0.01 I might decide it was useful to sell a few shares between $2.50 and $3, and not wait for it to drop back below $1. Not everyone in the market spends the same amount of time focused on stocks that those posting daily on IHub might. I have friends who check up on their stocks once every couple of months, just to keep "close track" of them.

I'd love to be able to say when I retire that my "taking losses" on my penny stocks will mean selling off shares for 5 or 10 times MORE than what I paid for them ?

What is a remarkably significant position in a stock for me, might not matter very much to another... who might what I would consider to be larger holdings in a few penny stocks they own... that may not be overly significant to them. I think it is reasonable to assume we're not here chatting daily with Warren Buffet and Bill Gates. None of us here have the kind of $$$ they do... or we wouldn't be chatting here daily, either.

People sell shares for the reasons they do... whether they need the money, or simply because they are executing the plans they had for their investments when they bought them.

It doesn't really matter too much, either, why they sell... given the fact of their selling will have the same impact, whatever the reason. I think that leaves you needing to do your own DD to determine for yourself what the company is doing, what it is going to do, what the potential and the risks are, etc. Find value, and try to buy value when others are selling. Not rocket science... which is not to say it is easy. The fact is that price is not value, price is price, determined by the balance in supply and demand. Selling in excess, drives the price down. Buy low means buying "broken stocks" when others are selling them and "breaking" their price support. DBRM got whacked by selling in the last two years... but, the company has only improved its situation in that time ? I'd say, actually, that they have improved their situation dramatically.

I recognize the value, here. I note the price relative to the value, and that it is what it is for the obvious reasons...

I called the bottom here back in February tied to the drivers in the oil price changing. Insane to be able to buy DBRM for $0.07, then... which didn't mean I thought I must be missing something that the sellers knew that I didn't ?

Price is demand and supply. Value is value.

Since then, I haven't had a reason to alter my position. DBRM still trades at a huge discount to present value, never mind the many and significant improvements in their situation since February, or any thought of the current price discounting any future events or future values...