mte - on special, page-3

Calina,

You make some very good points. Holding MTE during the current market reminds me of during the GFC when I was holding a gas company by the name of Pure Energy Resources (PES). I bought the company around the 27cent mark based on the location of its gas exploration tenements. They proved to be outstanding gas tenements and as a result the price rose to around $2.20ish (pretty sure they had an impressive initial JORC as well to back it up). Then the GFC struck and people turned irrational and within a few weeks it fell below dollar because of panic selling (no different to MTE). I used to remind myself that even if the world was headed into a massive depression energy would still be needed by the masses (all the CSG companies were eying LNG as their end goals). I also used to take comfort in a valuation sheet I created that showed PES trading at a massive discount to its peers and to the recent merger activity in the CSG sector. Again, no different to MTE...


Long story short I held onto my stake in PES during the irrationality of the GFC and ended up selling to British Gas for $8.20 a piece, turns out that my simple valuations were correct and as a result I laughed all the way to the bank.

Just remember, just because short-term irrational traders and investor think this company is worth 103million today doesn't mean a multinational won't run the ruler over it in 6 months time and come up with a valuation many multiples above today's market price.


s.loeb