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130,000,000+.....all got it wrong?, page-15

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happyvalley

151 Posts.

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24/11/17

14:53

Post #: 29093468
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Originally posted by psi81 ↑

I would suggest not paying too much attention to what the SP has done in previous years. That's one of the biggest mistakes investors make, it's a form of anchoring bias to say "the SP was 15c two years ago so it's undervalued now."

There are two big cognitive errors at play there. The first is that companies like this are often valued on speculation so even if the stock was priced at 15c back then, it may not have been justified. People say "the market is getting it wrong now" but it's equally likely (in fact moreso) that the market was actually getting it wrong then.

The second big error is the inability to comprehend that value can be destroyed as well as created. A company may have been worth 15c back then but since that time, the company has spent money for no return, diluted its stock, market outlook for its business has deteriorated, etc. Even if the project has advanced the value may be lower.

I would also suggest not reading too much into what instos and "sophisticated" investors are doing. Those guys get it wrong all the time. All. The. Time. They supported SGH's buy of the UK business when it was $8, it's now under 4c. They are driven by what they think they can sell the shares for, not by what they think the shares are fundamentally worth.

It's another form of cognitive bias called authority bias. Those guys are big and rich so they must be right. That's just false. They may be experts in the market and in business but they are not experts in CSG geology or reservoir engineering. You guys, if you've been reading my posts, probably know more than any of them.

Instead, don't look back - just look at the here and now. STX is far more derisked than at any time previously, it has near-term funding and it has a competent management team. The price is cheap at $60M market cap with the upside of several Tcf of gas. A company that commercialises this resource could easily be a billion-dollar company, and even a company that proves it can be commercialised is going to attract interest from predators. STX is already known to the major players (I know at least two have run the ruler over them) but they have obviously decided to sit back and let STX carry the risk of proving it up. Risk appetite among the majors is still low and I'm pretty certain they don't yet believe STX's economics, and certainly don't believe they themselves can achieve them. It all comes down to Jaws - if STX can drill and frac a well that flows a couple of MMscfd then it's inconceivable to me that this company will still be anywhere near $60M market cap. Particularly with some of the no-hopers already sitting on multiples of that.

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psi ... congrats on ur post. As you can see from the "thumbs up" acknowledgements, you're everybody's leading light.
Happy Valley

STX Price at posting: 5.8¢ Sentiment: Buy Disclosure: Held
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Last 17.0¢		Change -0.005(2.86%)		Mkt cap ! $487.1M

Open	High	Low	Value	Volume
17.5¢	17.5¢	16.8¢	$1.068M	6.261M

Buyers (Bids)

No.	Vol.	Price($)
5	433355	17.0¢

Sellers (Offers)

Price($)	Vol.	No.
17.5¢	373316	8

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No.	Vol.	Price($)
5	433355	0.170
35	1409641	0.165
41	1736572	0.160
14	763905	0.155
26	502664	0.150

Price($)	Vol.	No.
0.175	373316	8
0.180	671190	11
0.185	509443	7
0.190	1232735	16
0.195	918217	11

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