Can STO survive, page-828

@madamswer you did well at MND where I hesitated at the Macro. Lesson learned for me.
On paper I did very well on SMX but I don't confuse financial outcome with being right and respect your opinion. It was taken over because it was cheap but operating results justified your caution over my optimism.
Again it's awesome you say you're not sure, we should all be less sure more often.

However with STO I am not uncertain.

I agree that it is generally impossible to beat the market or predict macro trends better than hordes of analysts.
In this case the opportunity for small long term value minded investors (who don't worry about temporary paper losses) exists for 4 reasons I can think of.

1. Analysts spend too much time in offices, their university training tells them markets are always efficient and economic models shouldn't include the effects of finance or resource costs. Divergent or long term thinking is severely discouraged it is in fact obliterated - there are no Anarchists working for Wall St firms or value investors either as in pure form these things can only exist away from the noise and the bad odor of the worshippers of the superfluous.
2. We are led to believe that oil is going to be less than $50 per barrel forever because the Permian Basin https://en.m.wikipedia.org/wiki/Permian_Basin_(North_America) in Texas despite having already produced 29 billion barrels of oil has suddenly found an additional resource which is cheaper to exploit than Ghawar in Saudi Arabia. https://en.m.wikipedia.org/wiki/Ghawar_Field . I call bullshit - PXD is a Ponzi bubble which is misleading it's investors about the amount of oil available. The fact that PXD exists is all the evidence one could need on my first point, the forward looking statements on which the company sells this bullshit are only as good as their two page long disclaimer of small print.
3. To understand the price of oil long term it must relate to geology and technology. These are physical things which engineers, tradies and oilmen understand but financial analysts clearly do not. It is my view that US tight oil can ramp up and oversupply the market until like it's cousins the Eagle Ford and Bakken already have the sweet spots in the Permian start go to water. At the present rate this is probably two years - it can restart again but at much higher prices. https://www.google.co.nz/url?sa=t&s...ggoMAI&usg=AFQjCNGzqemg7P66E4PwdwqfVP4BzHiU7Q
4. Meanwhile if like the rest of the industry STO's reserve replacement ratio remains at 7% for two more years we will be in a position of massive undersupply. Tight oil is a tiny tail wagging the dog of an enormous global industry.

This situation is a practical experiment for me of a comment BG once made that economic conditions militate against the continuance of any given trend. The present low oil price and cashflows of STO are not an expression of weakness, if you looked at the historical record in late 2014 the uninitiated would have seen a strong showing and perhaps thought it quality.
That historical strength was in fact weakness just as the present weakness conversely eventually will mean strength - low oil prices are the cure for low oil prices.
Eventually - years. Value investors can wait and chill go surfing not worry about Mr Market's latest rediculous brain malfunction.
I am not interested in quality business, meaning Amazon, Google or Facebook. Everyone is looking for those competition is intense.
The present "breakeven" price of $36 US brent crude does not include (4) or the fact that the industry is in depression - service providers operating at a loss to avoid going bankrupt.
In the long term oil must oscillate around it's cost to make and that's nearer $100 than $50 U.S Brent Crude with the real breakeven around $50 - 60 per barrel.
Oil and the LNG STO produces is a fixed cost for almost every business. It's not just a commodity it's THE commodity, consumption is massive and resources depleting steadily.
Most businesses are cyclical and should be valued on through the cycle earnings - if they can be bought at a low price and are well entrenched they make wonderful investments also.
It doesn't need to be this way, cycles of mad over and underinvestment with billions in wasted capital and inestimable environmental degradation. Definitely keen to exploit the cycle, vote my proxy, take a win and reinvest in a windfarm or Snowy 2.0 though.
That's my definition of being the change you would like to see in the world.
GLTA (shorters I genuinely love you guys-it's your fiduciary duty to put your money where your mouth is and go hard. The shareprice is definitely falling )