I reviewed some of my favourite readings on bubbles including Tulipmania yester-evening. Just a a skim read. What came through strong was the tendency for investment returns to fluctuate wildly but regress to the mean over the long term. The underlying assumption of regress to the mean is that the investment itself is sound and not likely to fail.
The human condition's tendency to oscillate between mania and despair cause the wild fluctuations.
With all that in mind, I thought what is the pure mean of SGH since it listed?
Answer, $2.60.
Therefore assuming the company doesn't nosedive into a further life threatening crises we can see the relationship of share price and time on a graph.
Now I'm not one for voodoo in the day to day but I do believe in the economics of supply/demand including why fluctuations regress to the mean.
Here's the SGH graph since listing with the mean (red) line. This suggest to me, provided believe in the company's survival, and absence of a further event changing the company's dynamic, then we can extrapolate that red line to peer into the future.
Despite all its troubles, ignoring the noise, overall trajectory from listing is up.
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