Some really good advice in this thread. Those who have been...

Some really good advice in this thread. Those who have been 'playing' the stock for the last few months should have been well and truly aware of the high risks they were taking.

For the longer term investors however, the picture is a little different. This company went down hill very quickly. The June 2012 report was outstanding. FGE had nearly $200 million in CASH, strong NPAT and cash flow, and great returns on equity. They also had a bucket load of contracts for future work, and were diversifying into power with some promising JV opportunities in Asia. The Roy Hill contract was already being speculated. I am not saying there was no risk, but the balance sheet was very strong.

June 2013 delivered good profit and strong returns, and future contracts provided plenty of buffer against what we all knew to be a weakening of demand in the sector. Cash flow was a concern, as were the bonding arrangements for work in progress. But given performance over preceding years, these were hardly 'red flags'.

I was concerned by the Taggart purchase. It didn't make sense to me and caused me to review my position. Once I realised that FGE were chasing annuity work and geographical diversification, I was comforted by the insurance of such a strategy given the lack of ongoing engineering work in Oz, and decided to retain my position (what a shame!).

The TH of November was a huge shock. Suddenly the management capability was under serious doubt. The risks had gone from acceptable to very high. But the horse had bolted and a quick decision was required whether to cash in the few remaining chips or to play out the hand and see what the cards actually were. In retrospect any return on the dollar would have been better than none - but any long term holder would be showing a massive loss on their investment in any event.

Blame yourself for poor investment decisions and try to avoid them again. But only management of FGE can be blamed for such a poor result when they had such a great starting advantage.