RE:Debt is Good! Sgy can make way more money with debt! Thanks Tanman, perhaps you're right that debt is good under these circumstances with a bull oil cycle, leverage I believe they refer to it as.
My concern is that if the cycle is 4 and not 7 years and we get caught with debt that becomes unmanageable....This could be a super bull cycle with these prices, but these are tumultuous times, which creates uncertainty and unpredictability. Not saying I'm right, but with the fcf they will generate combined by the animosity banks have for the oil patch( when you look at hedged companies, many were forced upon them by the lenders) I am leaning towards companies that have minimal debt, at or around .5 FFO or are working towards that target, and that are rewarding shareholders. Guess we can call it investor preference- I may have a different risk tolerance if I was younger, but it is what it is- I don't think my choices are based on fear, I try to find balance.
We're both investors here for the same reason, we both think we are going to make very significant returns on our investment. If management makes decisions I determine to be beyond my tolerance level, I'll move on. However, Paul has experienced a scare or two over the years, I don't believe he will over extend based on what he has said. And I agree, with you Tanman, he has made some astute decisions and has positioned the company in a position of strength, cause and effect.
All the best
Binkie