An excellent post Let's try again.
The below conclusion is a great summary of all of the points which Andrew Hall raises with such authority;
"As a result, “the virtual inevitability of higher prices down the road leads to a simple conclusion: now is not the time to exit the market,” he said."
The below point also stood out;
“there is certainly still a chance of lower prices in the next month or so,” although “weighing that possibility against the virtual inevitability of higher prices down the road leads to a simple conclusion: now is not the time to exit the market.”
And the following;
“Despite all the short-term negativity, the longer term story regarding oil remains very much intact. Indeed the longer prices remain at current levels the more powerful the ultimate recovery will likely be.
A very apt title for this to be published under as well
"Oil recoil - J Curve". If Andrew's hypothesis is on the mark, then within the next month it would seem Oil is supposedly bottoming referencing his 'next month of so chance of lower oil', it will be hard for some to hold onto FAR, this said - there is IMHO a high likelihood we might see some bargain hunters enter the stock when the market turns or we see a '
black swan event', which is looking more likely with Russia warning overnight to immediately destroy anyone threatening
Russia and further Russia upping its nuclear
stance and holding baltic nuclear
drills and seemingly looking to block the Baltic sea - it would seem to me unfortunately that the Middle East's volatility is going from bad to worse.
I would prefer that any differences between the Saudi's and Russia are resolved amicably, and it is just a game of
brinkmanship. However, the Saudi/Russia differences are potentially far more complex than just the Oil - with the ex lord Mayor of London overnight stating;
“The simple fact is, the West doesn’t face a threat from Russia,” the former Mayor of London said. “We now face a threat from Muslim fundamentalism. Most of which has been funded by Saudi Arabia, our principal ally, which has funded the most intolerant strand of Islam which bears no relation to the teaching of the Prophet Mohammed.” and "Only now has Washington just begun to see that it needed to cooperate with Iran and Russia to combat Muslim terrorism, he said. “We need a broad coalition. The West is discredited after the fiasco over the wars in Afghanistan and Iraq. We need to bring in not just Russia and Iran but China, Nigeria and Brazil as well. It needs to be the world standing together. That’s what the UN was created for.”
Whether you take the perspective of the 'Oil God' Andrew Hall, or consider the escalation of issues in the Middle East (
not wishing for escalations here by any means, but talking fact). It is highly likely we will see a natural restoration of pricing through the market's economic forces (within the next month according to Andrew) or perhaps a more sudden step change through conflict. With previous conflicts spiking oil prices as follows;
View attachment 123314
The point I would like to make in this post is, it seems highly likely Oil may bottom within the next month or (months). Furthermore, for many holders - it will be difficult to hold on. Once Oil recovers, no doubt bargain hunters will appear and we will see a step change across sentiment and investment in O&G. With FAR's results progressively being disclosed through the next 6 and a 1/2 odd months, furthermore our new blocks 3D being released around the May/June timeframe - as per a previous post I
made talking to being patient and waiting out to May for what I think will be a major step change in our share price, I urge you to consider the following;
- If we are close to the bottom, why would you sell now? "Don't throw the baby out with the bathwater".
- Consider your tax concessions if you are trying to trade the stock and get in and out, I would prefer to sell out of FAR at a much appreciated price in 6 months and use a 50% concessional tax discount, than lose that in trying to gain a few pips now.
- For the brave, perhaps now is the best time ever to buy.
"As a result, “the virtual inevitability of higher prices down the road leads to a simple conclusion: now is not the time to exit the market,” he said." Andrew Hall
Although widely criticised the following quote might be more apt than ever all things considered;
View attachment 123319
P.S - Kudos to the team at FAR for their timing around the capital raise. I would hope this point doesn't need explanation in light of the events we are seeing currently.
(20min delay)