PFIE - After the Fall

Can TMF move mountains? ProFire is back to its pre bubble baseline and 76% below its all time high

http://softwaretimes.com/pics/pfie-03-27-2015.gif


**Ticker   High     Date       Now   Change**
PFIE     5.78  06/11/2014   1.40   -75.8%

Crude prices seem to be bottoming:

http://www.nasdaq.com/markets/crude-oil.aspx?timeframe=1y

3DP has also crashed. X-post at the NPI board:

http://discussion.fool.com/3dp-after-the-fall-31686963.aspx

Denny Schlesinger

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re oil prices

you can look at this with mostly fundamental
http://www.businessinsider.com/barclays-on-oil-prices-lower-…

http://seekingalpha.com/article/3021326-oil-will-bottom-in-3…

http://www.forbes.com/sites/mikepatton/2015/02/18/where-do-o…

or technical analysis, which in general seems to work much better in commodities than in stocks…
really long term charts are hard to find. But $WTIC at stockcharts.com offers a good look especially for members (longer range charts)

and see http://en.wikipedia.org/wiki/Price_of_oil#/media/File:Crude_… since 1861

and http://en.wikipedia.org/wiki/Price_of_oil#/media/File:Brent_… since 1987
note that the 1991 mini crash took 8 years tho correct, and then from a price half of the post 1991 low.

It seems there have been only 3 super bull markets in oil, one in the 1860’s, then in the 1970’s, then the recent one. I would base my expectations on these super bulls rather than all the mini ones.These may be the oil equivalent of “secular” bulls , requiring a long time to recover, with a fake “bottom” before the final one. All guesses of course.

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US rig counts still not near the lows seen in the not so distant past

http://abcnews.go.com/Business/wireStory/us-oil-natural-gas-…

US oil and natural gas rig count drops by 21 to 1,048
The U.S. rig count peaked at 4,530 in 1981 and bottomed at 488 in 1999.

mauser, thanks for all the info. This quote from one of the articles sums it up best:

Here’s the point. Oil prices are highly unpredictable. Although there is no shortage of available data, predicting the price movement of oil is really an educated guess.

My original guesstimate was that oil and PFIE would start to rebound in the second half of the year. Maybe the current bounce is just a head fake.

Denny Schlesinger

At some point I will probably make a bet on better oil prices. But it will probably be in a company that can survive low prices for a long time. Maybe EOG or NOV.

A friend managed to get a new job in an oil well supply company just near the peak in oil prices, The company makes a high quality line priced line of parts priced a bit above average. He tells me sales are only about a quarter of what they were at the peak.

Drillers are conserving cash, because cash flow is what you need to pay the bills. The trickle down effect will be significant.

Another thought might be that the drop in oil prices might be due to an unnoticed demand drop, an early sign of recession. Because economists , whatever school of theory they promote, are united in their inability to forecast recessions . They are good at offering explanations but only after the event.

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Another thought might be that the drop in oil prices might be due to an unnoticed demand drop, an early sign of recession. Because economists, whatever school of theory they promote, are united in their inability to forecast recessions. They are good at offering explanations but only after the event.

I have an explanation for the forecasting failure. Classical economists model their “science” after physics where the track of objects obeying gravity is predictable. The science of complexity, which includes markets and the economy, doesn’t play out in a simple field of gravity but on what Stuart Kauffman calls a “fitness landscape” that constantly changes as the agents compete and learn.

Oil was humming along down a “known path” until they invented fracking which changed the industry’s fitness landscape. All of a sudden it was no longer the Saudis on top of the game, the frackers took top position. Then the Saudis fight back. And so it goes. Making predictions is mostly futile. But the underlying laws of supply and demand remain constant which is to distribute product as efficiently as possible and the market’s function of eliminating unnecessary profits also remains in place. Within these lose guidelines it is possible to make educated guesses. Mine is that eventually oil prices will rebound as supply and demand get closer to equilibrium and eventually the players (agents) change their game once more.

At some point I will probably make a bet on better oil prices. But it will probably be in a company that can survive low prices for a long time. Maybe EOG or NOV.

A lot of PFIE investors have been cost averaging down. Not me. I discovered that I cannot make money on constantly falling stocks because I won’t sell short. I didn’t sell either for reasons I have explained before. So I watch and wait, wait and watch for the landscape to turn in my favor.

Yesterday there was a bullish article on Profire at SA:

Profire Energy: An Undervalued Opportunity
Mar. 27, 2015 12:16 PM ET | 2 comments | About: Profire Energy, Inc. (PFIE)

Summary

- Undervalued company that is currently affected by the low price of oil.

- Strong revenue and sales growth over the past five years highlight a company with strong potential; increased regulation in the future offers even more opportunity for growth.

- No debt and a large amount of cash on hand allows company to weather the low price of oil for the next 12-18 months.

http://seekingalpha.com/article/3033936-profire-energy-an-un…

“Undervalued Opportunity” is not the same as “Buy Now.” Just keep it on your watch list.

Denny Schlesinger

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