PWE - Penn West Petroleum

[Eye4Valu]

You all make anything of Ho Cheuk Fund paring stake?

[Uccmal]

You all make anything of Ho Cheuk Fund paring stake?

 

Nope.  Sounds like a value shop that behaves similar to me.  Take a bit off as you go.  The interesting events will happen when the stock reaches $3.00.  It will slowly come back on the radar of conventional funds, and it will become marginable in Canada. 

 

$3.00: when or if, I suppose. 

[Joe689]

CEO French speaks today at 1:40 EST at GMP FirstEnergy - Energy Growth Conference. 

 

Slides: http://www.pennwest.com/upload/media_element/media_file/404

 

Webcast: http://jetslides.tv/lobby/1164

 

Nothing too new in the slides besides added color on decline rates and waterflood program

[Joe689]

Thinking with this OPEC cut that a lot of money might now be newly interested in oil names.  When they do their valuations, we should be near the top of their candidate list.

[Joe689]

Confirmed with IR that a new reserve report will be included in year end report.  It will be likely be as 12/30/16 as it was the previous year.  Trying to gauge what effect the report will have.    Primarily, the big differences will be reduction in Viking Saskatchewan and now the newly included Viking Alberta.   

 

Also, Penn West does not usually individually press release closed dispositions, so I would anticipate an update being provided in the next large report.  The December presentation reaffirmed that asset sales were on track for year end. 

 

The only thing that I think we might hear soon is the well results for AB Viking.  They said a couple times that they will inform us as soon as they have them.  "Early december" was the verbatim.

 

Nonetheless,  an exciting time for this company at these low levels.  Just glad I got in near the bottom right after those asset sales.  Another 6 months and I got some long term gains!

[Joe689]

Was thinking this last production deal cut would be the push above $2 USD.    Been trading pretty weak the past couple weeks considering the huge climb in oil.

 

Thinking it must be the uncertainty around the asset sales, drilling results, and '17 budget. 

[SharperDingaan]

Look up a calendar ...

With all the recent sales activity in the patch, it is highly likely that they have a sale waiting on approvals.

Our seller also needs to be out before tax loss selling season starts.

 

SD

 

 

[Uccmal]

Was thinking this last production deal cut would be the push above $2 USD.    Been trading pretty weak the past couple weeks considering the huge climb in oil.

 

Thinking it must be the uncertainty around the asset sales, drilling results, and '17 budget.

 

I think the Asian value fund Ho Cheuk has been reducing their position depressing the stock.  They were required to file until 3 weeks ago when they sunk below the reportimg threshold so we wont know without superior detective work from smeone with a Bloomby.

 

Look the worst case scenario now is where the stock is at.  PWT has likely taken the opportunity to hedge a bit more, hopefully not too much, but enough. 

[Uccmal]

Was thinking this last production deal cut would be the push above $2 USD.    Been trading pretty weak the past couple weeks considering the huge climb in oil.

 

Thinking it must be the uncertainty around the asset sales, drilling results, and '17 budget.

 

I think the Asian value fund Ho Cheuk has been reducing their position depressing the stock.  They were required to file until 3 weeks ago when they sunk below the reportimg threshold so we wont know without superior detective work from smeone with a Bloomby.

 

Look the worst case scenario now is where the stock is at.  PWT has likely taken the opportunity to hedge a bit more, hopefully not too much, but enough.

 

I did some back of the envelope calculations this morning. 

Whitecap trades at 1.3 to 1.4 x book and has a similar debt/equity profile to PWT. 

Pwt has a book value after impairments of - 5.80 per share.  Some impairments may reverse with higher oil prices so the book value is conservative in a rising oil price environment. 

 

Pwt should eventully trade at 1.2 x book, so  7.00 cdn. 

 

Assumptions: Oil stays above 50 US per barrel and currency is at 0.8 us to $1.00 cdn. 

 

Pwt should have some small discount to WCP (WCP has a better growth potential), but WCP is cheap as well.  There is also the gas factor.  Both of these companies produce 20% gas.  Gas prices are really high right now.  They are 20- 50% higher than PWTs hedges.  Pwt can take this opportunity to hedge gas further out at higher prices, stabilizing 20% of their cash flow.  I assume they will, for at least a portion of their production.

 

So, I see an easy 2.5 x for Pwt from here.  In other words, it is still insanely cheap, providing my assumptions hold. 

 

Obviously if oil keeps going up the currency assumption will change but that is less significant than the actual oil price climb. 

[SharperDingaan]

Uccmal

 

Its interesting that we come to about the same price over about the same time horizon. Assuming a price today of $C 2.50; 2.5X is $C 6.25. We think its a double within 12 months + 15% for crossing the $C 5.00 institutional threshold ($C 2.50+$C 2.50)*1.15 = $C 5.75.  While they are very different approaches, they come out to essentially $C 6.00/share +/- $C 0.25 (4%).

 

FWIW we think the odds are pretty high that in year 2, it doubles again to between $C 10-12.

The main drivers being growth through the drill bit, oil consistently in the USD 55-60 range, and a dividend implementation.

 

A year ago PWE was widely available for < $C 1.00, & at that time - most would have demanded at least a 10 bagger return for tolerating the 'buy & hold' risk. If it works out, 3 years later - there is a very high possibility, that is pretty much exactly what you will end up with.  Confirmation via a different route.

 

May we all become very rich!

 

SD

 

[kevin4u2]

Was thinking this last production deal cut would be the push above $2 USD.    Been trading pretty weak the past couple weeks considering the huge climb in oil.

 

Thinking it must be the uncertainty around the asset sales, drilling results, and '17 budget.

 

I think the Asian value fund Ho Cheuk has been reducing their position depressing the stock.  They were required to file until 3 weeks ago when they sunk below the reportimg threshold so we wont know without superior detective work from smeone with a Bloomby.

 

Look the worst case scenario now is where the stock is at.  PWT has likely taken the opportunity to hedge a bit more, hopefully not too much, but enough.

 

I did some back of the envelope calculations this morning. 

Whitecap trades at 1.3 to 1.4 x book and has a similar debt/equity profile to PWT. 

Pwt has a book value after impairments of - 5.80 per share.  Some impairments may reverse with higher oil prices so the book value is conservative in a rising oil price environment. 

 

Pwt should eventully trade at 1.2 x book, so  7.00 cdn. 

 

Assumptions: Oil stays above 50 US per barrel and currency is at 0.8 us to $1.00 cdn. 

 

Pwt should have some small discount to WCP (WCP has a better growth potential), but WCP is cheap as well.  There is also the gas factor.  Both of these companies produce 20% gas.  Gas prices are really high right now.  They are 20- 50% higher than PWTs hedges.  Pwt can take this opportunity to hedge gas further out at higher prices, stabilizing 20% of their cash flow.  I assume they will, for at least a portion of their production.

 

So, I see an easy 2.5 x for Pwt from here.  In other words, it is still insanely cheap, providing my assumptions hold. 

 

Obviously if oil keeps going up the currency assumption will change but that is less significant than the actual oil price climb.

 

Using book value to value an oil and gas company is completely useless, and I'm not sure where you ever learned such a technique.  Next, impairments of $5.80 per share shows they are really good at destroying capital.  Why would you invest in a company that has a proven track record of poor capital investments?  This stock has never earned a return on it's capital, even at $100 oil, so why would that start now?

 

The only way, and I mean only way to make money on PWE is to either trade it or pray for higher oil prices.  Unfortunately, higher oil prices isn't going to happen in my opinion.  OPEC may try to support prices in the short term but the long term picture for oil is not good.  That is the main reason why I believe Berkshire invested in airlines.  I would spend some time understanding the secular forces that this industry is up against before investing in it.  You and SharperDingaan, someone who curiously writes in third person and is unwilling to make a personal judgement, have presented a terrible case for investing in this company.  Buyer beware.

[Uccmal]

Was thinking this last production deal cut would be the push above $2 USD.    Been trading pretty weak the past couple weeks considering the huge climb in oil.

 

Thinking it must be the uncertainty around the asset sales, drilling results, and '17 budget.

 

I think the Asian value fund Ho Cheuk has been reducing their position depressing the stock.  They were required to file until 3 weeks ago when they sunk below the reportimg threshold so we wont know without superior detective work from smeone with a Bloomby.

 

Look the worst case scenario now is where the stock is at.  PWT has likely taken the opportunity to hedge a bit more, hopefully not too much, but enough.

 

I did some back of the envelope calculations this morning. 

Whitecap trades at 1.3 to 1.4 x book and has a similar debt/equity profile to PWT. 

Pwt has a book value after impairments of - 5.80 per share.  Some impairments may reverse with higher oil prices so the book value is conservative in a rising oil price environment. 

 

Pwt should eventully trade at 1.2 x book, so  7.00 cdn. 

 

Assumptions: Oil stays above 50 US per barrel and currency is at 0.8 us to $1.00 cdn. 

 

Pwt should have some small discount to WCP (WCP has a better growth potential), but WCP is cheap as well.  There is also the gas factor.  Both of these companies produce 20% gas.  Gas prices are really high right now.  They are 20- 50% higher than PWTs hedges.  Pwt can take this opportunity to hedge gas further out at higher prices, stabilizing 20% of their cash flow.  I assume they will, for at least a portion of their production.

 

So, I see an easy 2.5 x for Pwt from here.  In other words, it is still insanely cheap, providing my assumptions hold. 

 

Obviously if oil keeps going up the currency assumption will change but that is less significant than the actual oil price climb.

 

Using book value to value an oil and gas company is completely useless, and I'm not sure where you ever learned such a technique.  Next, impairments of $5.80 per share shows they are really good at destroying capital.  Why would you invest in a company that has a proven track record of poor capital investments?  This stock has never earned a return on it's capital, even at $100 oil, so why would that start now?

 

The only way, and I mean only way to make money on PWE is to either trade it or pray for higher oil prices.  Unfortunately, higher oil prices isn't going to happen in my opinion.  OPEC may try to support prices in the short term but the long term picture for oil is not good.  That is the main reason why I believe Berkshire invested in airlines.  I would spend some time understanding the secular forces that this industry is up against before investing in it.  You and SharperDingaan, someone who curiously writes in third person and is unwilling to make a personal judgement, have presented a terrible case for investing in this company.  Buyer beware.

 

You know, you are right I'll sell right now.  Yeah right.  I didn't get > 20% after tax cagr over 11 yrs.  listening to idiots. 

[Joe689]

 

TOO would be an amazing acquisition for PWT to expand in the Alberta Viking fairway. Check their presentation.

 

Cardboard

 

Well, so much for TOO.    Was going to say "good premium" but I am not sure.  Looks like a steal to me.  They had 122 net sections in Viking AB.  PWE has about 170. 

[SharperDingaan]

kevin4u2:

 

I note that you have commented on this board, on PWT specifically, on a number of different dates throughout 2016.

Some of those dates, & the TSX closing $C price on that date were as follows: Oct-03 ($C 2.43), Sep-17 ($C 2.32), Jul-31 ($C 1.65), Apr-28 ($C 1.43), and Dec-21-2015 ($C 1.29).

For reference purposes. The TSX closing price today (Dec-14-2016) was $C 2.36, and $C 1.17 as at Dec-31-2015.

 

Your comments indicate you are clearly not a fan of PWT. You are of course entitled to your opinion - as others are to theirs.

Your Dec-21-2015 and Apr-28 postings evidence that you were aware of the price of PWT at the start of the year.

Todays price of $C 2.36, divided by the $C 1.17 price at the start of the year, is a year to date return of just > 100%.

Apparently that is a terrible investment.     

 

Poster beware.

 

SD 

[Uccmal]

kevin4u2:

 

I note that you have commented on this board, on PWT specifically, on a number of different dates throughout 2016.

Some of those dates, & the TSX closing $C price on that date were as follows: Oct-03 ($C 2.43), Sep-17 ($C 2.32), Jul-31 ($C 1.65), Apr-28 ($C 1.43), and Dec-21-2015 ($C 1.29).

For reference purposes. The TSX closing price today (Dec-14-2016) was $C 2.36, and $C 1.17 as at Dec-31-2015.

 

Your comments indicate you are clearly not a fan of PWT. You are of course entitled to your opinion - as others are to theirs.

Your Dec-21-2015 and Apr-28 postings evidence that you were aware of the price of PWT at the start of the year.

Todays price of $C 2.36, divided by the $C 1.17 price at the start of the year, is a year to date return of just > 100%.

Apparently that is a terrible investment.     

 

Poster beware.

 

SD

 

Not only that but in a number of prior posts Kevin4u2 stated that the price per flowing barrel that PWT would get for their assets was about 50% of what they DID get for the assets in June, which were not even their prime producing properties.  But he would rather post on past impairments from a year ago.  Obviously, he is too lazy to research anything and would rather regurgitate past arguments.

 

And he operates on the assumption that what we state in two posts is all the research ever done on the stock.  Several of us on this thread have gone through various permutations (99 pages) of different ways to view this investment, updating as circumstances change. 

 

Why am I bothering...dude has no credibility anyway.  This will be the last effort I waste on him.

[doc75]

In fairness, Kevin did nail his call on the depth of the energy rout.  I'm too lazy to search for the posts but I distinctly recall him advising to stay clear of oil when it first cratered to $80, while most on the board were discussing how everything in the oil patch was on sale.  And I believe his point was that most companies in the patch never really earned a cent (not just PWT).  Of course, none of this excuses his condescending style. 

 

Anyway, back to PWT:  I just noticed that Byrdson has been gobbling up shares the past couple days.

 

https://www.canadianinsider.com/company?menu_tickersearch=pwt

 

 

[kevin4u2]

 

Using book value to value an oil and gas company is completely useless, and I'm not sure where you ever learned such a technique.  Next, impairments of $5.80 per share shows they are really good at destroying capital.  Why would you invest in a company that has a proven track record of poor capital investments?  This stock has never earned a return on it's capital, even at $100 oil, so why would that start now?

 

The only way, and I mean only way to make money on PWE is to either trade it or pray for higher oil prices.  Unfortunately, higher oil prices isn't going to happen in my opinion.  OPEC may try to support prices in the short term but the long term picture for oil is not good.  That is the main reason why I believe Berkshire invested in airlines.  I would spend some time understanding the secular forces that this industry is up against before investing in it.  You and SharperDingaan, someone who curiously writes in third person and is unwilling to make a personal judgement, have presented a terrible case for investing in this company.  Buyer beware.

 

You know, you are right I'll sell right now.  Yeah right.  I didn't get > 20% after tax cagr over 11 yrs.  listening to idiots.

 

 

So instead of presenting an rational argument you resort to an ad hominem attack and then beat me down with your illusory track record.  Nice try but there are some serious readers on this board who can see through your smokescreen.

 

I would note that your so called record was calculated in an intellectually dishonest manner by, "throwing out your high and low returns".  Now why would you do that, to appear modest?  Nope, the problem is that you have admitted to a recent fairly large drawdown.  Anyone can have 20% returns for 4 years and if in year 5 you suffer a 50% drawdown your net return is ZERO.  You see, Bill Miller had a terrific long term record and it only took one major drawdown to flush it all down the toilet.  So what is your true intellectually honest rate of return, and why would you throw out the highs and lows unless it was in your interest to do so...?

 

I would also add that your in a pissing contest about returns you will not win, so don't bother embarrassing yourself.

 

So getting back to the original discussion, please attack my argument that this company has been a capital sinkhole.  When your done with that one tell me how and why BV tells you anything about the value of the company. 

 

Now everyone duck, as I suspect the mud flinging is about to start again. 

[Uccmal]

Kevin, As I said...  why bother?

 

[Joe689]

Almost a million share dump at the end of the day today.  Disappointing w/ oil at 52.  Things are getting fishy.

[Uccmal]

Almost a million share dump at the end of the day today.  Disappointing w/ oil at 52.  Things are getting fishy.

 

I am not inclined to worry about it.  As Doc indicated above, Byrdson, an outside director, bought 650000 share this week.  His history, in terms of share purchases is interesting.  He bought 200000 shares sometime in 2015, sold them late 2015 for a tax loss (probable). He bought that amount back after the asset sale, and added the 650,000 this week.  So, either he is stupid, or sees a brighter future. 

 

At some point during the stocks low points Ho Cheuk fund bought > 5% requiring them to report.  They reported selling to below the 5% mark in Oct/November, and as a result no longer have to report.  My bet is they are still moving shares out.  The only references I can find to the fund is that they have a chinese address, and have bought and sold Penn West.  It may have been a big chunk for them and a real big score this year.  Beyond that it is hard to know. 

 

Kevin is correct, in that PWT was a sinkhole.  But that is no longer the case, since the asset sale. 

[Cardboard]

Kevin has been right once or by pointing out the massive increase in U.S. shale production: parabolic in 2014. Since then he should have made a killing by shorting.

 

I remember him being mad as hell when Penn West went from $0.60 to $2 in just a few weeks in 2015. So maybe he was short?

 

Now, he is like a permabear who never switch side or at least go from negative to neutral.

 

Cardboard

[SharperDingaan]

We know our seller had 9% of PWT at one point (approx 45M shares), and that they have now been selling for quite some time.

Yet despite that sustained and material selling pressure - the price hasn't really fallen.

The bitch is that the price of PWT hasn't risen along with its peers.

 

That much additional supply, had to have been crossed against additional institutional demand.

We now also have significant insider buying, signaling impending change.

And every spring rebounds once the weight is removed.

 

It is a speculation as to why the seller has such a hate on PWT, and is so adamant to exit.

We can only conclude that they must have been burnt under the old regime, and chose to average down when the share price was sub $1.00. It got their average cost down to around the current market price, & gave them a seat were there a take-out, but it took their share count up to 9%. It's really only recently that they would have finally been able to spit the bad taste out, without loosing any money.

 

Just keep in mind that every yin has its yang,

and change at the two inflexion points is sudden.

 

SD

 

 

   

 

 

   

 

[kevin4u2]

Kevin has been right once or by pointing out the massive increase in U.S. shale production: parabolic in 2014. Since then he should have made a killing by shorting.

 

I remember him being mad as hell when Penn West went from $0.60 to $2 in just a few weeks in 2015. So maybe he was short?

 

Now, he is like a permabear who never switch side or at least go from negative to neutral.

 

Cardboard

 

Cardboard I am not bearish any longer. I just think there are much better places to invest other than this company. Many people have sent me personal messages about this one taking a bath, following others unto this name and a few other oils. Now they say they didn't do enough research.

 

Why not try and kill this idea?  I just don't think some people on here do not appreciate the other side if the argument. Instead of being open to discussing opposing points of view it is clear some are only interested in silencing there opponents.  It doesn't bother me as I understand the psychological games people like to play.

 

As I mentioned before I believe there are secular forces at play here that makes the short term interesting and the intermediate and long term downright scarry for oil. What threats face this industry? Lots. Let's just say I wonder if my 12 year old son will even drive an automobile.  We are at a tipping point of what they call a paradigm shift.  Technology is making it so cloudy,  and that is why auto manufacturers are so cheap. Why is every tech company and their dog getting to autos?  The future is going to be different, so why take the risks sorting out the winners and lovers. Look for one foot hurdles,  don't loose money, enjoy life. Cheers.

 

[Cardboard]

Being early is the same as being wrong and I have been many times. Technological changes will undoubtedly affect all our facet of life. But, this takes time. Often, much more than we expect with one reason being that we all have a built-in resistance to change. We don't like to adpat.

 

This reminds me of a fund manager in 2001 or so who justified his investment in Magna instead of Linamar because they had less exposure to combustion engines. This was also roughly at the same time that Ballard Power was supposed to revolutionize the world with their fuel cells. If you look now or 15 years later, that argument had zero bearing on the success of either one. So we all have to be careful about extrapolating too much into the future.

 

Regarding this company or Penn West, I would say that it is night and day from the company in 2014: the debt situation has been addressed, they have cut the bloated administrative structure, are focused in a few key plays and have pretty good well results or definitely similar to best in class players. It still does not address the issue around ROIC which is plaguing most of the Canadian shale players. So based on that alone, one could justify staying away from this unprofitable industry. They are cyclical after all.

 

I no longer own the name since I believe other oil & gas stocks offer more potential, at least near term. However, I still could get back in. But, I was very wrong to enter this name in 2013. While the "change" at the micro level stated above or the original thesis played out very well, the two crashes in the oil price: excess supply/OPEC war on shale, Iran deal, killed the investment thesis. I knew about the excess supply but, since it was ignored for so long by the market, I kind of ignored it too. Then when people finally realized that U.S. shale was about to turn a slight over-supply into a large over-supply the first crash began.

 

Despite, I kept on saying that this company was worth $2 in a bankruptcy/liquidation scenario and based on what has transpired, I do believe that I was right. While you seem to indicate in the past that it was a clear $0. If we look back from a starting point of $10 then, it got a lot closer to $0 than $20 so I was wrong and you could say that you were right. However, you can trade, average down, revisit the situation when events transpire. So it is all very relative.

 

While I have no problem with people taking the opposite view, I like to hear sound arguments and transparency (short or not?). I also like for people who present such opposite view to present their own selection. However, when one is only here to bash others ideas without themselves going on the high wire then I lose a lot of interest in what they have to say.

 

Cardboard

[Uccmal]

Well said Cardboard. 

 

As to PWT.  If one goes through the entire thread, I have admitted that I got caught in the commodity downturn.  But that hapoens with cyclicals.  I took my tax losses and got out.  I originally entered pwt because it looked as though new management was taking the steps necessary then to right the ship, and clean up the balance sheet.  The comparability to Fairfax in 2005 was uncanny.  An overextended company that had made bad management decisions.  Now, with PWT had the commodity crash not happened, they would have sorted out the asset messiness, paid down the debt, and still been a larger player out west.  But that is not how it unfolded.  So, I got out.  Its all documented in this thread. 

 

In late 2015, the real depth of the commodity bath began.  In late 2015, I re-initiated a position in PWT, as well as ENB, RY, FN, MTL, RUS, WCP, and BEP.un.  All in the same time period when the Canadian index hit bear market territtory or very close.  My positions in every one of those listed above were bigger than PWT when I re-entered it.  I actually posted the exact number of shares I bought and reqdjusted the number as time went on.  As we know, in early 2016 the oil price bottomed and started to rise, and my posiiton turned profitable. 

 

I traded around the position throughout early to mid 2016, and was getting fed up with the situation, even posting "too little, too late" when they made an asset sale in April/May.  My comment at the time was that they had just sold an asset, and it didn't dent the debt on the balance sheet because the debt was rising faster than they could sell assets to cover it.  Then within weeks the big sale came. 

 

And that was a game changer as far as I am concerned.  They have right sized the debt. 

 

Proportionately, their debt is the same as WCPs, which I still hold, and that is why I feel it is a reasonable comparator.  Now, whether any of these companies will actually make money, after the retrenchment remains to be seen.  When I use book value, or NAV, it is only as a simple comparator.  Whether its right or wrong it shows me that relative to WCP, PWT has alot of room to run. 

 

Now to clear up the misunderstanding on the NAV.  It is roughly 5.80 (somehow that got misconstrued as being an impairment of 5.80). That 5.80 is the NAV or Book value of the assets of the company at Sept. 30, 2016.  It has been subject to prior impairments due to wells being shut in, or made uneconomical by the low oil price.  My comment, was that we may see asset revaluation, should commodity prices increase or stay the same.  All in all, it was a simplistic way of analyzing a complex situation. 

 

Kevin focuses on the ROIC, or future cash that can be taken out of an operation (I guess we can call that free cash flow).  I have no quibble with his statement that the vast majority of western Cdn, and I will add, all north american smaller E&Ps were fat and bloated and were not making money.  Nearly all of them were engaged in financial engineering, where they issued stock or debt to finance dividends, and drilling.  Most of them were stealing from the future, and got caught badly by the downturn. 

 

However, several things have transpired since the start of the commodity rout, some industry wide, and some PWT specific.  Industry wide, the survivors have cut their costs, and rationalized production.

PWT specific: they have cut their costs and selected their best fields to focus their capex on.  Whether they will actually become EPS profitable remains to be seen.  They certainly will, should commodity prices rise.  Whether they are at $53.00 price per oil will come out in ensuing quarters. 

 

They have a few tailwinds right now: a large amount of tax loss carry forwards will shield cash flow, perhaps for years to come; the commodity price itself (both oil and gas - gas is trading way above where they have hedged some at); their cost structure has come way down making them among the more competitive operations (It is in the ballpark of WCP); reversal of impairments (this of course has no effect on cash flow); and some further debt reduction. 

 

IMO in a rising commodity environment (say > 55 oil) they will make alot of money.  In a stable commodity environment (prices where they are now)  they will at least break even, or slightly better. 

 

As to the greater argument on whether we use oil and gas in the same quantities going forward, I would suggest that demand will stop rising at some point, and the decline will eventually start.  To that end I think the resolution will favour the likes of PWT who have a long lasting, ready piped environment, and limited competition in NA.  Taking this further, I think that higher margin projects that were put on hold during the bust will stay that way.  This will have the perverse effect of limiting supply going forward.  It wont stop the juggernaut of cheaper alternatives, but that is the really long game. 

 

Why PWT versus other companies.  Well I also hold WCP,  and BTE (eagle ford).  There are undoubtably better companies out there with bettter risk adjusted possible returns, but I got to know PWT, and WCP really well, and I tend to amke the most money when I stick to something I know well. 

i have had this type of stock crash, sell out and rebuy type scenario a few times in my career.  Sometimes I get out and stay out forever, like RIM (bby).  Other times I hang around to take get better profits once things rebound (BAC, WFC, JPM - apparently not long enough though. 

 

As to the attack on my long term record I let it stand.  I toss out the highest year (198% return); and the lowest (-33%) to give myself a better idea of what is sutainable.  The 198% year was the FFh Leap year (2006) and is not representative of the way I invest now.  If I leave in the highest and lowest years then the results look better, not worse. 

 

And thats enough.