"Is it a fear that we are in the midst of a boom (thus near the peaks), a fear that revenues are getting too close to the levels of the last peak, a fear that LYL is not capitalising on the infrastructure boom, a fear that LYL is a minnow, a fear that contract disasters (a la RCR) are just around the corner etc etc?"
For mine, it is all of the above, bit overwhelmingly it is the view - rightly or wrongly - that we are close to the peak in the cycle.
And I have to say, I understand that view (by that I don't mean I necessarily agree with it; rather, I can understand why elements of the market come to that view).
I think that the recency phenomenon is strong in people , and that they are still somewhat scarred and brutalised by the painful fallout that followed the previous peak.
I've enough grey hair to know that no two business cycles - whether at their respective peaks or troughs - are the same, and if you held a gun to my head and forced me to plot the shape of the current cycle, then I'd say that the peak will not get anywhere near the manic amplitude of the commodity boom of 2011/12, but that this one is likely to be more enduring in terms of time.
In other words, at the risk of sounding pretentious, I'll invoke some basic principles of calculus and say that, compared to the last commodity boom, the area under the curve of the current cycle upswing will be broadly similar, but instead of an acute peak but spanning a relatively short period of time (the last boom), this time I think the cycle will have a far less pronounced intensity, but will last for several years.
Which, in many ways, will be a better quality "boom" ...certainly one that is more manageable from the point of view of a business that is participating in it.
LYL Price at posting:
$4.70 Sentiment: Hold Disclosure: Held
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