an interesting analysis, page-135

Hey Auto,
Are we talking here about trying to separate the systematic risk (aka market risk) from the company specific risk and the interpreted effect on the OEL stock price?

No way I'm putting an opinion on here. That's a lose-lose proposition. Not doing it. Give me call and we can discuss.


What is clear (IMO) is that the market risk has gone up (e.g. coronvirus, change commodity price, change in demand,...). When I compare OEL stock price performance to my other 2 ASX listed investment stocks (so not counting the binary bet spec) its a fugly graph.

Since they would be exposed to "relatively" the same "market risk" that just leaves "company specific risk". I would add that OEL has the 2nd highest beta of all the E&P stocks I own (ASX and US). Nothing inherently wrong with a high beta (higher risk higher retrun right??) ... general definition being

"High beta stocks are those that are positively correlated with returns of the S&P 500, but at an amplified magnitude. Because of this amplification, these stocks tend to outperform in bull markets, but can greatly underperform in bear markets."

Then again, changing the benchmark away from S&P 500 to say XOP (O&G E&P only) changes the beta. What I can comfortably say the last phrase of that definition has played out (in the E&P sector bear market).


I've done pretty much what you asking in trying to determine "value" ... the actuals are in their financial statements. The future production profile ... well I would call that a FORECAST. Its dependent on quite a few variables. So its going to wrong and if it right its lucky. But you have to expectations of the ranges for these variables so risk to them.

Now we're getting down to why one company is "better" than another (e.g. lower costs, better margin, superior product quality, ...) and how that is reflected in stock price.