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Woulfe Mining Corp WFEMF

Woulfe Mining Corp is a mineral exploration company. It is engaged in the acquisition, exploration and development of mineral properties.


GREY:WFEMF - Post by User

Comment by professorchaoson Jun 10, 2012 2:50am
292 Views
Post# 19997037

RE: Timing of Events...

RE: Timing of Events...

It's interesting to note that markets price for anticipated risk, not real risk. If there is (more) turmoil in Europe for a little while longer, it may very well slow down the increase in demand for tungsten (think about it; with non-Chinese supply dwindling as China steps up production for domestic consumption, we don't need an increase in Global demand, we just need an increasing demand-supply gap outside of China). However, who suffers from European turnoil? In a globalized society, ripples to everyone. But realistically, it's probably going to be felt in Europe much more than it is in Asia or the Americas.

 

Given that IMC companies face considerable competition from Europe, European turmoil seems to give IMC a competitive advantage (or at least that's how it looks to me). The rewards for this kind of advantage aren't felt all at once, and they're most visible in hindsight. But life doesn't reward hindsight, it rewards forethought. This is why I'm so excited about Woulfe's position: As far as I can tell, we're facing a coin flip. Heads, we get a nice return all at once in the near future; tails, we get nice returns eventually, when the markets price the company fairly (dividends tend to guarantee that, if they look stable).

 

To me, the advantage of heads (the world starts feeling safer, and Woulfe's enviable position becomes reflected in the stock price) is that I get more capital to reinvest now, and allocating capital is fun. The advantage of tails (more scary news, and the stock price stays low) is that I get extra time to raise more capital.

 

Of course, I could be missing really important parts of the equation. So I guess, like you, I also lament not having a crystal ball. It would really make the next few months much more relaxing. But if markets are even somewhat efficient, then they are paying me to carry risk. What text books currently fail to discuss is that markets must also pay individuals to feel the anxiety that accompanies risk. From my estimates, the real risks are as small as they ever get in investing, which means I'm being paid a sizeable premium just to feel anxious. But close scuritny seems to suggest that, no matter what happens with the Euro, we're going to be fine.

 

So I guess if I had to choose between everyone having a crystal ball, or no one having a crystal ball, I'd prefer none. If we could all see the future, I very much doubt woulfe would have traded at an attractive entry point since the KZ deal was first put on the table. A quick glance shows that there are currently quite a few great companies at really good prices in many different industries. I hope to one day feel gratitude for the opportunities all of this turmoil is affording me, in addition to the gratitude I already feel from getting to live in a society so free, it lets me allocate capital wherever I see fit.

 

GL everyone!

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