Bought $2000 of this company and others over a year ago, now worth $28k. Lost my job and wanted to hold this for emergency. Been watching you guys sell/buy back and am really envious that I haven't done the same but did not want to pay taxes on short sales. Gonna wait till Jan and start trading to avoid taxes this year. Do I pay taxes on profits if I reinvest profits using the same scottrade account? I really want to increase my holdings so I will cont to buy back MHR, DAN, FITB, but want to buy some $1 stocks with profit like SSN and MDW that some of you have talked about. All advice and help apreciated!
Not_A_Short, Not_A_Liar, or whatever lame name you wish to use next, here's 3 things to remember:
#1 - Claiming to not be a Short while constantly bashing is proof of being a short or trying to influence people to sell their shares at undervalued prices so you can pick them up which is worse IMO.
#2 - Anybody making more than a couple inquisitive posts has a stake in the position or otherwise wouldn't waste their time, to state otherwise is just plain stupidity.
#3 - Creating an alias "Not_A_Short" only emphasizes the fact that you are one and shouldn't be trusted.
my return is from .69 Cents to todays price.
Honestly have not figured it up .
(i used 6.00 lol)
or 8.69 times my money.
I NEVER would have bought this stock except i knew Gary's work in the past.
Have even told all my friends about it when it was at less than 2.00 to get in and they have.
As i've said MANY times before, he's one of the best i've ever seen at building a company and selling it, and he will do it again. If i had to make a bet , this will be about 4 times what it is now, before he sells it again.
Go back and read my post. I do not advocate putting together a basket of any old micro caps. Junk is junk. $1 junk is no different than $20 junk except the $20 junk has farther to fall.
I assume when you buy a $40 "blue chip" you do a bit of homework and try and avoid the Enrons and World Coms and Global Crossings and the like and do your best to invest in the large caps that won't be filing for BK anytime soon.
Turns out there are differences between $.50 and $1 stocks as well. Some have good management and some don't. Some have proprietary products and some don't. Some make good margins and some don't. Some management teams use their companies to enrich themselves and some use their companies to enrich themselves and other shareholders.
I like buying what I consider to be blue chip micro caps that are generally under $5 per share. MHR is a blue chip micro caps. There are lots of others including HGSI, EXXI and on and on. Do some homework and take a look at the five year chart of MHR, HGSI and EXXI and ask yourself why they rose so far so quickly, why they show no signs of returning to earth and why you weren't in any of them. Those are all good questions worth exploring and answering.
Your 15% really is chicken feed compared to what Slab and I and others have made on MHR. It's much better than what most make investing in blue chips but its chicken feed compared to finding Google, Walmart, Microsoft or MHR for that matter back when they were penny stocks.
Some folks don't have the risk tolerance to invest in pennies. Most penny stocks will wipe you out so you must spend hours and hours and hours doing homework before you invest. That kind of commitment isn't for everyone.
Nobody needs to do homework on Coke, Johnson & Johnson, GE, EMC, Dell, Goldman, etc...before investing. If you don't want to spend your time doing serious homework and you're o.k. with a 15% return if things go well or if you don't have a high enough risk tolerance then don't invest in micro caps.
If you want the brass ring as I define it and you're a working class stiff then you have to invest in the best quality micro caps available. Most of us have our assets depleted by sending kids to college, keeping our wives happy, paying alimony and child support and taking the periodic hit in our retirement accounts thanks to the morons in DC and on Wall Street. If you're not making $200k a year you're bleeding cash all your life and you're not going to live long enough to grab the brass ring absent some help from a stock like MHR and Gary Evans or an HGSI.
I owned HGSI at $1.40 and about four weeks later it was $14 per share then it rested for a couple of weeks and went straight to $28 per share.
Why would I want to own GE when I can own HGSI. I first bought MHR at $.39 per share. Two years later it's $6 per share heading for $20. Why would I want to own GE?
I may be understating Slab's position in MHR. He may be up more than 400% on a huge chunk of change and I don't want to insult him so I'll let him tell you how much he's up if he cares to do it.
I appreciated your well written post. You make some excellent points.
I agree that the potential for outsized gains (and losses) is far higher for small cap stocks.
You are wise to do your homework before making a big bet. I'm afraid too many investors idea of due diligence is little more than reading a couple of headlines and following what other are promoting or what has been going up.
I was not really being critical of MHR for a slow growth rate. I was commenting on how the huge increase in revenues was really all about the triad acquisition. If you look at the press release for Q3 there is no mention that the bulk of the growth was triad. Any casual investor reading that press release could easily get the impression that the growth was organic. See the press release I ran across. (In fairness the 10Q did disclose that the majority of the growth was due to triad, but relative few investors actually read the 10Qs)
I agree that investing in small caps is likely more risky than investing in a S&P 500 "blue chip", like say Johnson & Johnson.
I'd also argue that the potential for outsized gains (and losses) is far higher in the small caps.
For people that are true buy and holders, a mix of large cap blue chips can be very rewarding. JNJ raises its dividend by around 10% every year. Granted, the yield is around 3%, but clearly if you hold it over a 10, 20, 30 yr period, the dividend income stream alone can be significant. The same holds true for many large companies like Coca-Cola, Pepsi etc. That being said, I would rather take more risk.
I lose very little sleep when I invest heavily in small caps, because, when I invest heavily, I have usually done hundreds of hours of research. When I bet big, I do my homework. Buffett once did an analysis and found that he always made more on his big investments because he bet big when he was absolutely sure of himself and made smaller bets when he was less certain.
As for Magnum Hunter, I honestly believe it will be a $10/share stock within 12-18 months. With the acreage position they have in the EFS and Marcellus, they have the ability to ramp up production for many years.
Your statements about what kind of production growth rate MHR has experienced from the drill bit is misleading. MHR has not done much drilling since management took over. They drilled a well or two in East Chalkley and a few in the now divested Cinco Terry field that was operated by Approach, but other than that, they were living off of the increasing production in North Dakota, which was a direct result of the water flooding that was done under previous management. The real uplift was, as you pointed out, the Triad acquisition. Gary Evans spotted an opportunity where he could buy cheap production. How can you fault them for not having organic growth when they only recently acquired acreage to be drilled on?
They made the Sharon and Triad deals and now he is drilling 3 or 4 wells in the Eagle Ford as well as the Marcellus. With any luck, results will be good, but even average results will be dine given the fact that oil is slowly creeping up to $90/bbl. Hard not to make money on the EFS wells at $90/bbl. Are thse EFS wells going to be prolific producers like the Bakken? Probably not, but a depleted EFS well will probably be producing 40 boe/d. Given that they get full payout in a year or 2, that will be fine. MHR has something like 100+ locations. So, even after they are all drilled and in the flat part of the curve, you could expect 3000+ boe/d. That alone is 50% above current production. Add in the Marcellus potential and I think you will soon see the enourmous acreage/share exposure that MHR has in its portfolio.
I have done very well over the past 11 years. My compound rate of return is over 15% a year. Quite good in comparison to the averages. (and not a single short position!)
Is the Slab guy really up 400 times his investment over the past 3 years? I find that hard to believe.
You seem to be saying that investing is low priced stocks is less risky than blue chips stocks. How is that so? If a stock goes to $0, you lose 100% of your investment no matter your original investment price. Let me tell you something, a small cap speculative stock like MHR is far more likely to go to $0 than a S&P 500 company.
For your information, blue chip stocks (S&P 500) are up about 500% over the past 20 years. (1990-2010).
I am not employed. However, I am not unemployed.
Bill- You are absolutely right. Ever year all the pundits say this the year for blue chip stocks and then the small caps go out and kick the s--t out of them. I bought some BP this year, but that was it it as far as high priced stock was concerned.
What facts have I misrepresented?
It is true that I am not at present an investor in MHR. A friend of mine was telling me about it the other day and I decided to take a look at it for him. My friend is a pretty good investor. He was investing the preferred for the generous yield (10+%). He was under the impression that this was a fast-growing shale play and was thinking of investing in the common.
I am not short this stock (or any other stock). I don't short stocks.
I am also done looking at this stock. It is such a poor risk in so many ways (lack of earnings, dilution, debt load, exploration risk).
Good luck to all shareholders. (you may need it)