Ckleinnba, I'm happy to admit that that TeTeTe has some valid...

Ckleinnba,

I'm happy to admit that that TeTeTe has some valid points about investment in general. However the big question is which of those valid points specifically apply to a particular stock.

For example, getting caught up in hype is typically a bad thing. Getting caught up in hype which results in you paying significantly more than something is worth must be avoided at all costs. The first question then becomes, is a particular stock in a state of hype. If it is it raises a red flag that it's likely a stock to avoid. However, even hype in itself isn't always a bad thing. Sometimes hype can draw your attention to undervalued opportunities that you were previously missing. The key is not the hype, it's the paying too much. In the case of LNG then you need to ask yourself is it in a state of hype: to some extent you could probably say yes it is. LNG has gone quite unnoticed to much of the market to date and increasingly there has been some excitement about the stock and the company which wasn't there amongst the wider market before. Should you then question if it's still a good investment: yes, it could easily have been pushed way beyond what it's worth (especially given the ~2000% increase in SP that it has seen over they past 18 months). However, is the increasing excitement justified, and has the SP gone beyond what the company is justifiably worth? Yes LNG was priced at 20c at one point in time and even fell to 12c, however it was priced at such a low level initially because of what happened with FL. And even when the company began to demonstrate that it had a viable and profitable business in Magnolia (and had begun signing deals to demonstrate that) the market continued to focus on past misfortunes and not on the present and future. It soon became clear that LNG was likely worth quite a lot more than 10-20c, more like at least $1 or more. Since then LNG has made significant progress on Magnolia (the same progress I explained in relation to investing in a townhouse project), and has shown that it is likely to be double or quadruple it's original size. It is now clear that Magnolia alone is now likely worth quite a lot more than previous $1, and since then the company has acquired BH, and shown that it can likely acquire future projects. So given that the SP had been beaten down so low due to past misfortunes, given the original plans for Magnolia demonstrated value more in the order of $1 or more, given the company has double or quadruple the original size of Magnolia, progressed approvals and deals, acquired a second project, and shown it can acquire more and replicate the model, it's no surprise that we are now up 2000% yet still arguably not overvalued (that's the world of scalable businesses for you). If you want to invest in LNG, you need to value it like the townhouse development otherwise it's not an investment for you. Don't worry about what the guy who owns the projects paid for them when they was originally only one proposed project of 1 townhouse, look at what progress has been made and what the project is now likely worth.

Another of TeTeTe's generalisations is the future is uncertain and hypothetical. The future is always going to be uncertain and hypothetical no matter what you do. However this doesn't stop us from looking towards the future with some degree of certainty. Dealing with uncertainty is as fundamental to investment as it is to life. We need to minimise uncertainty and manage risks. Putting your money under your mattress is uncertain into the future, your house could burn down. Putting your money in the bank is uncertain, the banks could collapse. Investing in government bonds is uncertain. Everything is uncertain. In the case of LNG then you need to determine where the uncertainties lie and how uncertain they are. For example, we don't yet have authorisation from FERC to build Magnolia, however how uncertain should we be that it will or will not get authorised? The plant may cost more or take longer to build than anticipated, however the company is managing this risk by signing a fixed price and time contract with KBR and SKEC which shifts the risk of this uncertainty to them. For every uncertainty you can come up with there are details that need to be considered in order to determine the level of that uncertainty. This is where the generalisation gets applied.

People like TeTeTe are happy to throw up all these generalisations for why LNG isn't a good investment (at all, or at a given price), however none of them are willing to discuss the details of their generalisations in order to determine if they are relevant or not, and to what extent they are relevant. This is where most have problems with what such people have to say. I'm all about risk assessments of my investment, so if someone can present me with an issue with the company that I have considered or risk assessed then I'm all ears. However repeated generalisations without further justification are either naiive, or intended as deceptive.

Finally, if you agree with TeTeTe's valuation metric that LNG is worth 0, then you must also agree that my townhouse project is also worth 0. If you want to see it that way then fine, don't invest in either of these sorts of businesses. However deciding it's not for you vs short selling something you don't understand (in the case of TeTeTe), are two different things.