Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (42332)	4/20/2011 12:50:27 AM
From: E_K_S	Respond to of 78666

Thank's Clownbuck - This is helpful information to know. However, can't the company under estimate their actual depletion numbers and can they really be trusted (are they audited). I believe NOG had an article that stated that the company was reporting inaccurate depletion figures, thus overstating their actual reserves. It was a hit piece by some short seller(s) but how can we really trust these figures? It is a good place to start in order to determine some type of value. I agree w/ you on those company presentations. They pretty much show you selected information that provides the best spin for the company. They also leave out very important information like "Our latest test well was a dud!" (check out the latest Rex Energy Corporation (REXX) presentation). Several years ago I held a position in Royal Dutch Shell and over night their reserves were reduced by 30% in a press release. Over several years they had overstated their actual reserves (it's not an exact science as management claimed) either their depletion numbers were too low or they just lied. The stocked tanked and as I recall there were no shareholder suits. There was some management shake ups, committees formed to investigate audit procedures but it proved to me that stated reserve numbers can and will be wrong. Value investing exemplifies the art of digging. The more you dig, the better picture you get into the company and their operations. Sometimes you will find some hidden assets or nuggets of value that will provide you some confidence in making an investment. For you to make money. the market must eventually recognize this value too. EKS