motely morons

A MAD fortune-maker
A case in point might be our old favourite Maverick Drilling & Exploration (ASX: MAD). Long-time readers will know Dean Morel first highlighted this company back in August last year, when it was a mere ‘sleeper stock’, flying under the radar of all but a few savvy investors.

Fast forward to April 2012, and Maverick is the ASX’s hottest stock this year, soaring from 22 cents to a peak of $1.40. For those counting at home, that’s a potential fortune-making gain of 536 per cent...in a matter of just 3 months.

Yesterday, Maverick’s share price struck a speed bump, falling as low as $1.02...bringing the gain for 2012 down to a mere 364 per cent.

We’d take that gain any day.

In fact, Dean and I have taken those gains, seeing as we both own the stock, bought last year at average prices in the low 20 cent range.

But yesterday, some people weren’t happy, one saying...

“I'm a big fan of your work - but not so much as of late after seeing about 20% value taken off MAD on the back of your email late Thursday! Not sure if that's something you can be proud about.”

Another was just plain fearful...

“Hey guys what’s happening to Maverick. It’s really scary stuff. Tell me what you think!!!!!!!!!!!!”

Now here’s the really scary part…
We’re not sure why our reader should be scared...unless he’s trading on margin and/or using CFDs, and could be in danger of being wiped out of his position.

The really scary thing for us is that some people may end up losing money on a stock that has soared as much as 536 per cent year to date.

We’re guessing all might be forgotten, and forgiven today, given Maverick is soaring higher again, its shares up as much as 15 per cent to $1.25 in early trade on the back of a successful well result in the Nash Dome.

Then again, maybe not, given we’d advised Motley Fool Share Advisor members to take part profits on Maverick at around $1.30, although Dean did say...

“...by recommending investors take part profits it does feel like I’m stepping in front of a fast moving freight train! Maverick has a lot of potential, however the share price has run ahead of that potential.”

Stocks never love you back
It’s easy to fall in love with a stock, particularly one that’s risen so fast, so quickly, and seemingly has the potential to go even higher, especially after this morning’s announcement.

We asked Dean for his thoughts...

Maverick reported the Groce #182 well in Nash Dome field has encountered significant oil and gas pay zones. Management anticipate it “to be an excellent oil producer and potentially more prolific than the initial well Maverick drilled, the Groce #181.”

Due to this development the anticipated Nash Reserve study will be delayed by ten days. Delaying the report to incorporate this result indicates that the initial reserves for Nash should be higher than the report was originally going to state.

Maverick holds 2,740 net acres on Nash Dome. You may recall that at listing, Maverick had 7.8 million barrels of 1P reserves and 25.6 million barrels of 2P reserves on 850 acres on Blue Ridge Dome.

However, Blue Ridge was more developed at that time than Nash currently is, so extrapolate at your peril.

All will be revealed within the next ten days. Stay tuned.

A Foolish, frenzy-free zone
We’re business focused investors here at The Motley Fool.

We keep an eye on the macroeconomic environment, but we don’t work ourselves up into a frenzy about what might happen in Europe, the USA or China. We’ll leave that to the day traders, bears and pessimists.

And we definitely don’t let emotions -- both greed and fear -- effect our investing decisions.

As our own Scott Phillips said yesterday about our Maverick call for investors to take part profits...

“We try to give advice without fear or favour -- and we call it as we see it. We’re never happy to see our member’s investments shrink, but when we can no longer justify a recommendation on the known information and realistic expectations we’d rather tell our members so they can make their investing decisions accordingly. It would be far worse for us to keep our mouths shut and say nothing.”

Until next time, as ever, we wish you happy, profitable investing.

Foolish Best,