sorry for replying to myself once again. the thing is chances like paragon are great, they look almost sure in the way that if they dont go bankrupt. if the industry doesnt explode you are going to make alot of money, however if you compare to say 2009 you were having non cyclical industries that were making alot of money on very low multiple. thats when i went all in because having a stock portfolio of 3-7 stocks were perfectly safe for your entire wealth. if all were non cyclical the way the world had to implode to not make alot of mony...
my propensity to go for it comes form being right 90% of the time.. still if you ride your entier wealth of ebing right 100% of the time you are gonna reset over and over again even if you got a very high success rate... so yes manage risk is still a thing.. go for it but in a way where you can live to fight another day and only ever "go" for it if you are 100% sure that the market is being super silly.
one of my trouble ealier (I am still fairly young) was that I am hard wired to "go" for it, when it comes ot investing. no matter how much you know, there will always be things you dont know because its a industry secret.
Now i also care for others money ad I am thinkin long and had about not overexposiing us to things that can destroy us whiel still balancing out getting the large gains. what i an ound is that the big shots are often worth just holding out till its braindead not to go.. thats when everyone else is fully invested. this is not a reference to the oil industry. I am at the max now, but the economy of the stockmarket now is not how well are economies going and what are the returns but rather what is the interest rate.. its not sustainable.
thats not really true. the market is being hysterial and wrong on many occasions. actually when the marketi s changing view of an industry very fast and suddenly see no value at all its often an exaggeration.. how many companies werent talked about being worthless in 08 / 09.. this is basically the same kind of hysteria hitting oil right now.
the fleetstatus reports also confirms this, this company is much less of a dog than made out to be. the fear seems to be the value of the rigs, however as anyone might know by now. new or old rigs are valued by the income they create as well as their useful remaining life. however with all the upgrades the fleet is newer than it seems on paper and fully competitive in its area and if you compare to a newer fleet that fleet also has more debt attached to an asset that is worth more (fair enough) but has still depreciated a ton lately. I have faith in this managements operational prowess they just need to be more careful on the financial front.
This is major stuff in my investment thesis of the company. my understanding is that during a downturn cycle older shallow water jackups will still find work due to the high return on capital on workovers as well as the scale of the projects in shallow water (more managable, good return on alot of projects). Paragon I think have showed us that they are a very good operator, when there are cuts they are not the ones being hit and thats in a quarter with desperate low oil prices. my thesis is that more expensive projects are being put on hold while the idle capital is still well spent in the shallow water projects that already got infrastructure and doesnt need long term comitment. this is good stuff from Paragon. they generated this much cash in a quarter with these conditions, also they have managed to secure more backlog than any competitor out there.