GREY:STTYF - Post by User
Post by
zentrarianNZon Oct 02, 2012 2:54am
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Post# 20436223
This Dance Ain't Over
This Dance Ain't Over There is no question that management made some blunders with the thermal coal and oil streams, although IMO that has more to do with macroeconomic conditions than in their assessment of the projects. But they aren't perfect and it is revealing that they were quick to own up to the mistakes. The thing to keep in mind is that Watson and Co. aren't going to abandon SM&E just because they had some washouts. If anything, these setbacks will only cause them to rise to the challenge of turning things around. The recent dual deal with Colossus indicates they are already moving at least some of their attemtion from SG to SM&E.
Farsighted investors will put the past behind and consider the risk-reward going forward. Before this recent crawlback, SM&E was selling near liquidation value(!) and that encouraged me to finish buying half my intended position. (As luck would have it, right at the low.) I think there's still great value here for a long term investor, and the only reason I haven't gone all in is that I agree with most posters here that base metals are likely to take a sizable short term hit before inflation starts to really kick in, so there may well be better buying opps down the road. But I don't intend to sell or trade in the interim and risk missing a reevaluation by institutional investors recognizing what Watson has done with SG.
In short, I'm convinced that the "ugly sister" will be turning some heads before this dance is over.
z.
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