A must watch video for every investor IMOLet me start with my apologies:
* Stephen Mark Ryan, the creator of the video is obnoxious and vulgar
* The video is about Tesla but the content has implications for all companies
* The video is more than 30 minutes long and drags from time to time and will probably offend you
Now for the reasons to watch it:
* Tony Seba (the creator of the content of the video) has absolutely nailed the concept of innovation and adoption rates
* After watching the video, you will understand that innovation happens exponetially in the form of a "S" curve as opposed to linear adoption. That is why the so called experts (anaylysts, organizations such as the IEA etc) get it massively wrong year after year
* While the adoption of new innovation happens in the form of an "S" curve, the rate that the old technology that is being replaced also happens in the form of a reverse "S" curve.
* The net result for established existing companies or industries that don't respond to innovation in time is that they become extinct.
* The process takes about 20 years, but the bulk of the change happens in about ten years.
Why do I bring this up on a Suncor thread?
SU bought out Teck's minority interest in Fort Hills this week. Based upon the selling price and the asset write downs for both Teck and Suncor, one would have to surmise that Tech basically gave it away.
That should be great for Suncor. Right?
Then why did the street punish Suncor. Maybe punish is too strong a word. However, if the deal was such a steal for SU, why was the SU share price dropping after the announcement when the price of oil popped up?
The explanation from the street for SU's poor share price performance was due to the size of the writedown. That's true. However, why was the selling price so low in the first place when the price of oil is so high. I think the video will help why.