'Markets are rarely wrong for long durations of time and stocks are priced the way they are for a reason.'
Disagree, if markets were rarely wrong for long durations there would rarely be opportunities to make money. Markets are almost always wrong IMO, as they're driven by greed and fear (and sometimes love if you talk to FAR shareholders lol). Thus any stock at any given time is usually undervalued or overvalued but rarely valued without emotion. So what would be considered 'fair value'? Depends on who you talk to. IMO all it can be is a general agreement (consensus) of sentiment by market participants at any given time. But it doesn't mean that the generally agreed sentiment at any given time is carefully considered or correct, hence the coined phrases ‘the herd mentality’ or ‘the herd is rarely right’. Plus the makeup of the herd is ever changing and therefore the sentiment that dictates price is ever fluctuating, resulting in a market comprised of many SPs that constantly fluctuate.
The opportunity by DYOR, learning & mastering the technical and fundamental tools at your disposal, and learning from your own experience (and from others whom you trust) is to identify what you believe is undervalued, why the current market sentiment might be inaccurate and then aiming to be a step ahead of the herd and their ever changing perception of 'fair value'. This is easier said than done of course.
In relation to SBB, there can be no argument that it has been sold down by the herd due to a number fears that rightly or wrongly still exist. Those fears include the CEO's controlling stake in the company and any negative impact he could have as 'the dictator', concerns that he may decide to sell many of his shares on market post escrow period causing a further drop in the SP, concerns that a 25% of FY NPAT divvy may not be paid, concerns that the books have been fudged based on the low interest and apparent inconsistencies such as 4c vs HY interest figures on @$30 million, and therefore raising concerns that the cash doesn’t exist. Then there's the fear of possible fraudulent intentions and behaviours internally due to a small percentage of random Chinese businessmen and their companies (in the past) found to be listing on foreign exchanges for dishonest reasons etc. etc.
Yet so far none of the above fears have actually been proven (other than some low interest inconsistencies which I agreed need to be cleared up) and all going well i.e. unless these fears become reality, I think it's only a matter of time before the company dispels these myths (perhaps not by immediate reply but through continued hard work, consistent reporting and rewarding shareholders) and in doing so market sentiment towards SBB will improve in time IMO as will the market capitalisation of the company.
GLTA.
SBB Price at posting:
6.5¢ Sentiment: Buy Disclosure: Held
