You’re right in many ways from pure risk and value analysis point of view. However the market now is different to what it was or has been in the past 10 years with so much liquidity sloshing in the market that the world has never seen , not in 2009 not in 2012 , not ever. With excess liquidity and super low interests rate , capitals are increasingly chasing risky returns. I believe JP Morgan , HSBC and etc have done all the calcs on valuation and risk analysis and yet decided to join the IPO party taking up 10% holding each. Yes the inflation looks set to rise and so will interest rates but that will take time. The Fed and RBA will tolerate as much inflation as they possibly can as Japan 30 years ago serves as a somber example of how raising interest rates can completely stunt a major economy for 20+ years even it was intended as a well meaning solution to correct and control the super charged and inflated economy. So the party will last for sometime before it draws to a close. People walk into the party with different objective and different risk profile , some long some short but a party is a party that big shot guests know they shouldn’t miss. NXL is not for the faint hearted as it may or may not take off and competitors are only increasing by the day and they’re only making $20m profits a year but at least the industry and trend looks promising. You need something like NXL in your portfolio to give you some kicks and capture the still yet distant future ,otherwise trading will be such a mundane task limited only to the blue chips and even that during a correction/crash will wipe out half your portfolio. And I bet if it were to fall to $2-3 , you would probably be even less willing to catch even after all the value analysis as an event of that usually speaks of a total collapse in the market confidence.
NXL Price at posting:
$5.77 Sentiment: Hold Disclosure: Held
(20min delay)