Despite having exc ROE and plenty cash on hand, FGE 'suddenly'...

Despite having exc ROE and plenty cash on hand, FGE 'suddenly' blew-up and crashed close to 90%. It's left holders badly shaken and those with margin calls possibly bankrupt. It happened with amazing speed and ferocity and a full explanation is still wanting. A relook at FY13 yr-end result shows cashflow had slowed considerably and (in hindsight) that def was a warning signal. yet how many brokers/analysts advocated holders exit FGE before the crash? not many i assume. I've compiled a piece and posted on ASX general thread but am re-posting here as feel FGE is exactly the example of what can happen when companies in the MS sector go wrong. There are dozens including MAH which have smashed shareholders faith and bank balance. I still hold some IMD and am down 75%!! I welcome comments on my post which is compiled from a wide range of sources along with my own thoughts.

I have several friends can't fathom why i remain involved with MS sector when I've taken a hammering on IMD and a couple of others. One even described me as 'almost welded' to the sector. Yet I've also had several very successful trades over the past few months. due to a recent injury I have plenty time on my hands and I've been reading widely. Currently demand for drilling and mining services, outside of CSG/LNG sector, is now worse than during the global financial crisis. It's mainly due to the poor outlook on weak commodity prices, subdued exploration activity, deferment of all non-essential expenditure by mining companies and meaningful reductions in production activity. Add to the mix a slowing Chinese economy, languishing gold price and global oversupply of mining equipment including drill rigs. This dismal macro reinforces my conclusion that most MS sector companies are exposed and vulnerable to intense competition. hence, they have a very high uncertainty rating. Even a financially sound company with a vertically integrated mining service offering, geographic diversification, solid reputation and long-term relationships provides only limited barriers to entry and protection against falling margins. Most company's earnings are highly reliant on buoyant exploration and production activity in the gold, copper and iron ore mining sectors. I do not foresee an improvement in gold, copper or iron ore prices, nor do i expect any meaningful expansion in mining activity during at least the next two years, which will result in lower earnings. Conclusion: only buy the cream and wait until SP hits bargain basement level. Risk is high, but those that can fill a niche and keep customers will do well for shareholders. Be very very picky.