Great post. Back in form. Keep em coming.

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15,757 Posts.

11/08/15

11:51

Post #: 15784862
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Originally posted by madamswer ↑

"Can't understand the 2nd part of yr post."

It gets to the issue of causality, i.e., what are the real determinants of share price performance?

It sounds to me like WOR's share price has fallen due to the oil price having fallen. And certainly the tone of the commentary here, in the media and by broking analysts is consistent with this observation.

Ipso, an investment in WOR becomes predicated on an opinion on the direction of the oil price which, as is empirically evident, moves in a random cycle.

Therefore, an investment in WOR is predicated on trying to forecast a random variable.

Meaning, that absent any rare and unique insights into the oil industry and/or markets, an investment in WOR - like any commodity related business - boils down largely to chance.

And my experience having lived through numerous cycles is that - sadly - the element of chance actually becomes skewed against the investor because he or she gets consistently tripped up in by the Recency Bias, i.e., he or she cannot resist being overly bullish when everyone else is, and vice versa.

And its not just the layman who falls casualty to this phenomenon of human nature. Go and audit the commodity price forecasts of the most eminently qualified mineral economists and commodity analysts who - despite being aided by teams of assistants and substantial databases and supply-demand models - have a recurring track record of being mostly wrong (not just 50% wrong, which what one might expect under a scenario of mere random guesswork, but overwhelmingly mostly wrong [*].)

[*] Of course, no one will actively draw public attention to this sort of professional negligence, not do these "smart" folk ever get the sack or have their bonuses predicated on how accurate their forecasts are. No, their role is not to be right, it is to generate opinion - any opinion as long as it generates activity by which brokers and investment banks might profit.

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Great post. Back in form. Keep em coming.

WOR Price at posting: $8.54 Sentiment: Sell Disclosure: Held
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(20min delay)
Last $13.72		Change -0.140(1.01%)		Mkt cap ! $7.649B

Open	High	Low	Value	Volume
$13.90	$13.91	$13.71	$14.10M	1.019M

Buyers (Bids)

No.	Vol.	Price($)
12	2468	$13.72

Sellers (Offers)

Price($)	Vol.	No.
$13.73	2163	20

View Market Depth

No.	Vol.	Price($)
1	1000	14.100
2	20978	14.070
2	25834	14.060
2	12129	14.050
1	5741	14.040

Price($)	Vol.	No.
14.110	5741	1
14.120	27754	3
14.130	48372	6
14.140	17763	2
14.150	3229	1

Last trade - 14.00pm 28/11/2024 (20 minute delay)

WOR (ASX) Chart

Great post. Back in form. Keep em coming.

Top Stories

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History-making uranium sample grades and an imminent drill run. Infini Resources is poised to transform in 2025

This biotech stock raised $11M in a risk-off environment. Its Alzheimer's drug could change the game

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up

Southern Cross Gold zooms in on 9 new high-grade zones above 20g/t at Golden Dyke

Buyers (Bids)

Sellers (Offers)