Investors should never underestimate how negative developments lead to further negative developments

Investors should never underestimate how negative developments lead to further negative developments. The share market today offers many precedents. Atlas Iron, once upon a time a $4 stock and not so long ago considered good value below $1, is today trading below 17c. Lynas Corp has fared even worse, now trading around 5c and having fallen off the radar of most investors. Investors who like to criticise the analysts and experts for failing to anticipate crude oil's price dive better not lose sight of the fact that the industry itself is ill-prepared for lower priced oil. Globally. Oil companies carry too much debt. They have sanctioned too many investments that generate inadequate returns. Now analysts are coming to the conclusion that cheaper priced oil is here to stay, potentially for many years. This will impact on other commodities too. My Weekly Insights: (VIEW LINK)