RE:RE:Graphite Investing News Interviews SJL CEO Mr Paul OgilvieAbsolutely GoodSpec. We're onto really great things. We have to remember that due to the beaten down state of the resource sector, it's tough for companies to get interest from investors for the long term picture. Of course that will change. Gold is still struggling to turn around and resume an upward direction. Once this bear market reverses and we enter into a bull run again. Then look out. Especially the companies that have the goods to deliver. Like anything, there are those out there who will lead the reversal. Then like always the rest will start reacting and once things are roaring again, the herd will come stampeding.
I'm really impressed with Mr Ogilvie's long term approach. The fact he is focused on high quality and low cost is very important. This statement in the article made me think.
"The great thing about our lump graphite is the low cost per ton. This gives us significant latitude when it comes to being price competitive for customers."
This is crucial. Sure, right now when the prices of graphite are high, no one is thinking about the costs so much. However, what if prices plunge for some reason? Look at gold producers! The costs to produce have sky rocketed and even at $1300 an ounce companies are suspending production because of the costs.
Same thing happened at the height of the Molybdenum craze. Prices were super high and everyone was jumping on the band wagon. Then we hit the 2008, 2009 market crash and bang. Prices dropped and companies got stuck with properties that were no longer economical to bring to production. Even the producers got hit hard. Of course the entire resource sector got creamed and many never recovered.
History repeats itself often. At least SJL will be in a very good position should something like this happen again. The other companies...not so good. Not if there costs are too high. Too many people are looking short term. Times are great, prices are high...lets jump into any old graphite play, especially those who are rushing in to produce regardless of costs or mine life etc. Things could turn on a dime.
At least with what Mr Ogilvie is purposing to set up, SJL will do very well in good times and prosper through the tough times as well should tough times develop. I am hoping that good times are ahead of course. The resource sector has had enough tough times for long enough now!
Even though the major markets and many other sectors recovered from the carnage in 2008/2009, and entered bull markets, the fact that there was no lasting recovery with the resource sector, does concern me. The DOW has topped out twice since July 29th. It's been in a trading range since May of this year. The S&P 500 has faired better. Higher highs on each topping pattern. Now the indices are at the top again and look like they may be making new highs again, so we shall see what happens in the next little while.
Contrast this market behaviour with the TSX Venture. Sitting at 940, only a couple hundred points above the low of the market crash. Hasn't been able to break above 975 since May of this year. Yea it was recovering quite nicely up until Feb/March of 2011 where it hit a high of approx 2450. Then it dropped off and continued it's descent until hitting a low of 869 on June 26 - 28th of 2013. And still it's struggled to add a measly 100 points since then and now dropping off again. Unbelievable. So our CEO's approach is wisdom based.
So the resource sector isn't anywhere near out of the woods. If there is a reversal in the major markets that could affect things negatively even more. Not to be pessimistic but the facts are the facts. These are the reasons I feel strongly in support of how Paul Ogilvie and SJL's team are conducting business.