On 18 June I suggested there was an 80% chance of a minus 70% return from Tangiers Petroleum
John Robertson
PortfolioDirect
On 18 June I suggested there was an 80% chance of a minus 70% return from Tangiers Petroleum. Its Moroccan drilling activity has come up dry and the share price has fallen 85%, only very slightly worse than my 70% estimate. The risk/return profile of low market value oil and gas plays betting on expensive offshore drilling results is too skewed against the ordinary investor. Companies with a stronger capital base would be able to reassess information from even a dry hole to improve the chances next time but this is not an option for those companies betting everything on the next hole being a winner. Neon Energy is another to have fallen into this category recently. The best way to play these situations is to sell into pre-result expectations of success or simply stay clear because the risks are too great.
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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business strategist and investment market professional for over 30 years after starting his career as a Commonwealth Treasury economist in Canberra. Since being Australia's top-rated commodities analyst and chief economist at one of Australia' leading stockbroking firms, he has advised companies across the mining, consumer products, IT and biotech sectors on their equity market relations. He leads the firm's investment evaluation and security structuring activities on behalf of the Australian Small Scale Offerings Board (ASSOB), the world's first equity 'crowdfunding' investment platform. John Robertson discusses the interaction of mining and investment markets in his weekly 'From the Capital' column in Mining Journal.
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John Robertson
PortfolioDirect
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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