A few points27 May 2020 15:06
A pullback was inevitable. As has been stated repeatedly on many boards over the years, NOTHING goes up in a straight line. I surprised myself this morning by checking how long I've been a shareholder in Condor. October 7th 2009 was my initial investment. I've therefore seen it all, the ups, downs and associated theories for what is happening, and when.
I'll share a few more thoughts.
The market makers don't really care what the price is. If they see an opportunity to get buys and sells moving, they will take it. If they need to supply shares they have to get them from somewhere, and if they need to sell they will discount to whatever they feel is needed. No one outside of their world knows at any one time the motivation is. We'll have to see, with hindsight, this time. As ever. If you are day trading it is too bad, but if you are prepared to grin and bear it short term pullbacks are not an unhealthy intermission in a longer term progression.
If you read, or watch, anything of MCs prognostications on CNR then you might have caught his ambition to be 'shovel ready' by the end of the year. Given the willingness of the indigenous government to assist, and MCs own ambitions, even if it's H1 next year it doesn't really matter. The fact is we are far more advanced then when Condor last traded at these levels.
I don't need to rationalise an NPV by pulling together sophisticated DCF calcs to know that the SP really ought to be on the other side of 100p by now. My instinct tells me that on a comparative sector basis it should perhaps be closer to 120p than 50p, but I also realise that we may not get that final push until a few weeks before cash flow becomes a tenable outcome. For me if it's a case of waiting another 6 to 12 months then so be it. It's meaningless on a 10+ years scale.
Gold has pulled back. But then again COMEX contract rollover at the end of each month always produces some activity, often a pullback. There are also moves around to open up the economy and if you a short term binary investor, i.e. economy up so I must sell gold (my insurance against nasty things), then you may well be tempted to sell. However, with trillions QE pumped in to the world monetary system, inflation (after short term deflation) looks likely. A hard asset like gold will benefit, and that may be months away, not years.
At the moment I see this as an inevitable, and healthy, pullback. On this occasion it may still have further to go. However, as we have seen CNR is a tight market and one or two more decent RNSs and the SP bounces back up. If you believe in CNRs underlying value proposition, and have the cash to spare, then I would see it as a buying proposition. Condor is 'on sale'. It has been since the forced sale but that was before the permits started coming through. It's now on sale and considerably de-risked.
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