RE:RE:RE:RE:RE:RE:Why is this down 7% today?jcjohn36 wrote: Just remember that the smart money has already factored in what revenue for Q3 will look like.
small chance that lumber will stay over $900 for the balance of the year. I also don't see any insider buying during the last 6 months either? IMO The smart trade here is to sell into strength.
Im long WFT.
cheers,
JC
A few things worth picking apart and commenting on.
1. We know markets discount forward. No mystery here, but there is nuance per point 2 and 3 as:
2. "Smart" as you cite is debatable. Who/what is the smart money? Are you all-in as a proponent of efficient market theory? I'm sure not. EMT to me is the antithesis of smart, at least in this sector.
3. Not small chance, but zero chance of sustained $900. It begs the question of how much is enough. Best year in lumber was $480 for 12 months. Can we do better than that? Yes. What if we had $100 more, so $580 US for a year? Well that's $250 margins on 2.4 MMFBM so $600 million for a year. Not bad in my books, don't know about yours. A quarter at US $800 lumber+ is booked. Next might be $650. Say $450 for last 6 months. I’ll take an average of $587 US for a 12 month run any damm day. It’s a generational opportunity.
4. Insider buying is a mix here. Moreover it's been depressed for a long time so there will be transactions on either side of the ledger when it rises dramatically. I don't base my decision making on what some high school graduate turned lumber/pulp VP may or may not be doing, or whether he is buying a new truck, or he’s just playing the the houses’ money It's maybe worth noting if unambiguous, but it is not in this case.
5. Sell intro strength? Sure, but this is also investment grade. So if you're going to be in/out and trade... fine. I am not that good so I'm going to be selling in 2021 or 2022. That's just as easy, man. So there's a number of valid ways to play this in my opinion. I just think there's no sense selling my $3 shares for $6 when they are, by all objective measures, worth $12-$30 (near term....long term). But you gotta due your own DD to be confident rather than list to rich creeps on the internet like me.
My two cents. It sure ain't black and white, well other than its bad newsprint business which is black and white and red all over, but this will show so big green in the long run.