Weekend thoughts22 Jan 2022 11:38
All,
I’m saddened to read the pain and losses here, I wanted to make a few points as honestly as I can.
I have been in the same situation as those who have lost / been wiped out, probably 5 times in my life. Each time it has happened, I felt numb and found it difficult to cope.
Don’t be hard on yourself, the reasons why you invested here were built upon best evidence and knowledge you had, unfortunately it just wasn't accurate.
Here is what I would say/do.
1. Don’t do anything rash, this is hard, but think of the blessings you have. You have others that need you in their life, you have family friends, you are special and valuable to them.
2. Tell your other half, though painful and maybe angry, share what has happened, it will be better to do it, don’t bottle it up.
2. If you have faith, pray and ask for help.
3. You will be an emotional wreck right now, so don’t make stupid decisions/any decisions on a whim.
There is a thing called brain fog, where you won’t be able to logically work through the actual facts you have found yourself in, wait and let your emotions calm down.
2. On ADV.
I lost 5% of my portfolio here, it was always higher risk, higher reward and with painful lessons in the past, I limited my exposure, but still painful. All shareholders are in some pain and feel duped to some degree.
ADV have limited ways forward, so I sold out immediately because of that on the first chance, regardless of the price, because I didn’t see any options that would recover my capital, only dilution ahead.
They might have other deals lined up, but chances of shareholders recouping losses here are slim at best. Don’t be hoping against hope for a miracle here (they sometimes happen, but unlikely).
Don’t be adding to a loss here if you’re in that situation, either hold and write it off in your mind or sell is what I would do.
Don’t hope against hope that you will get your money back, you will likely add to the pain.
If you absolutely can’t bear selling, just forget it - but don’t add to a losing situation.
A few reasons I see as negative:
1. Buffalo was set up so that if it was successful, we had 100s of millions of cash flow and the well would produce most of that upfront. That would have been straightforward to monetise without dilution.
2. Now, if company is to survive, they will need to raise cash, most likely as a heavy share dilution - current capital and recovery is going to take further hits. The wages they are paying themselves is excessive to me too.
3. They have lost credibility, market will not forget this failure of a 95% chance of success on geological probability.
4. If you must invest elsewhere, don’t go for Minnows with a higher upside but high risk, you won’t make the capital back fast, don’t try it.
Go for safer companies - although no company risk free.
Two I like are already producers, but undervalued - TXP and SAVE.
SAVE I expect will double from here in 12 months or less, TXP I value a
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