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Re: so what's the bear case?First and foremost, may I remind you that I have noted, here, complete respect and admiration for your points of view, and still do. However, in the example that they sold stock and then subsequently bought it back, prices entered the decision making process....they sold at much,much higher prices than those that they have repurchased. Secondly, most natural resource businesses rely to some degree on debt to leverage their ROI's; that's not the case here because of huge net backs vis i vie their industry piers in Canada, the USA, and Europe. Thus they can drill for new reserves, develop existing reservoirs, buy back stock advantageously, and still remain debt free.... Finally, we appear to be at an inflection point with Tag Oil; namely, can (will) they find serious new reserves within New Zealand, or not...In less than 12 months we should have that answer. It is a short enough time for me to hold, and even add, and if they don't succeed, the capital "opportunity loss" really doesn't amount to a heck of a lot, and can be offset by the Dee Three's, RMP's, and MEI's that ARE adding exponentially to their Canadian reserves.....The risk-reward relationship is one I am very comfortable with at this price..... Thanks again for your excellent observations and comments; they are VERY valuable to all readers. |
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