RE: RE: Mart Magic Sorry, I do not think this is gambling. It is a calculated risk, but everything in life is a risk. There are never any guarantees for anything. Mart has gone up; the question is what to do with the money I have made.
Everybody decides for themselves, but for me I am looking for the next Mart. I will not sell this stock as it is still way under-valued at the present time. Instead, I will take my dividends and make the next investment. Hopefully, that one will also pay a large dividend in a few years.
Why is this not gambling? 1) Mart was priced at TWO TIMES existing earnings. 2) The oil wells they hit are massive producers, with who-knows how many more to come. The field is clearly not anywhere near fully explored. Mart's best years are clearly still ahead of them. 3) Yes, there is geo-political risk in Nigeria, but (in my judegment!) there is far greater geo-political risk in the middle-east. Iran test fired a missile capable of hitting Israel with a nuclear-sized warhead earlier this week, and gasoline was up in my city 20 cents a gallon within an hour. What happens when the REAL shooting occurs? It does not seem that Israel is bluffing. Then there are "tax the oil company" mentalities throughout Europe and the USA. In many respects, Nigeria is a safer place for an oil company that most other places; especially a company that partners with local indigineous companies that the Nigerian government is favoring. 4) Mart was, and continues to be, debt-free. No banker/loan problems at this time, and hopefully not ever again.
Warren Buffet made a fortune following the old Graham and Dodd wisdom; buy a company for less than it is worth. Buy a dollar's worth of assets when they are on sale for less than a dollar. That is exactly where Mart was a month ago. Its assets were-and continue to be-greatly undervalued by the market. That will change in the next few years. In the meanwhile, I will hold the stock, collect my dividends, and roll them into the next stock that I think can be another Mart. You can gamble if you wish. I will be trying to find a few companies whose real worth is being missed by the market, companies whose assets, like Mart's are sitting right out there for everyone to see, at a price that makes you say "you must be kidding me". There are not many, but I do not need many. I have one in mind at present. If interested, ask me about it after mid-August when my dividend money goes in! Also, interested in what else people like-send me a private message.
This is not gambling, this is calculated risk-taking. There is a difference.
In the end, the current commodity boom that has been in place since 2001 will end, just as the real-estate boom, internet boom, Japanese boom, the prior commody boom of the 70s, and the "Nifty Fifty" of years ago ended. All signs indicate that it will be at least another three years, and possibly much longer than that. When that occurs, I have an exit plan of where to go with my money. At that point, I hope to have an awful lot of money (God willing) so that I can do some things that make sense from a societal perspective. I have little need to spend the money on me, there are things in the world I would like to improve before I die. I do the best I can to stay humble; I try to remember that the happiest people in the world are the servants, not the people that get served. Thanks for listening to my heart on this.
Bows