malx1 wrote: TLV, comments like this make me believe that Warren Buffett is sharing GH observations vicariously. Thank you.
Agree with your assessment, and appreciate it.
However, as a long-time shareholder, observer, supporter of this company, I'd like to defend its poor price action ending 2019.
People seem to go through cycles in their strategies and their lives, each cycle lasting 6-10yrs. US presidential cycle often 4-8yrs. The short-end of caring for a German Shepherd through its best years, 8yrs. The average lifespan of a Restaurant. Relationships? Lol
Something similar happens with investing, most notably when investing in "Cyclical" businesses, and ESPECIALLY when investing in energy/agriculture commodity producing businesses.
With that said, in defense of GH's share price performance, 2011 to 2019 the years you examined, we must also look at the "Mental Health" and "Financial Health" of investors who participated in the Energy sector, and Alberta-based businesses.
The Investor Psychology should be considered as Alberta and the energy sector emerges from its
decade of degradation. My thesis is that after a few years of $80 oil and $3ng, sound government policy, stronger balance sheets, healthy free cash flow yields, buybacks and the realization of growing dividends, that there will be waves of investment capital will return to Energy and Energy-related businesses. This will be old capital returning in the first wave and new capital entering in preceding waves. We are talking hundreds of Millions and eventually billions, from all corners of the globe. The aggregate impact will be Re-valuation upwards. What was once valued at 3x cash flow can eventually be investable at 6x cash flow. A changing of the guard will take place.
The Investment Book of Revelation, where money managers seek sustainable and growing cash flows in sectors that were so fashionably shunned by the masses.
Had extra time today, so got to drawing charts and looking at 20yr Energy-related equity returns.
Can call this one: Three Strikes and You're OUT!!
(investors who have have suffered a 20yr strikeout in Energy, not likely candidates to keep batting)
This is why expectations are so low, and why stocks exposed to Energy have a red flag attached.
It's been easier to just own GOOG, MSFT, AMZN, TSLA, NFLX, etc. (add your fave Meme stock here)
When it becomes clear that commodity prices can and will remain close to what we see today, new money will migrate to the sector. Operations at GH will catch the updrafts. We are lower risk than owning E&P's directly. GH will participate in a
Secular Energy Bull Run with much lower beta than other vehicles. Similar to CWB but much more fun for customers.
Now back to watching Kasking clean out weak hands in the Poker room!!