NZ Oil & Gas (NZO)

[Casa del Energia]

Who cares what value a third person values anything at. Value is in the eye of the beholder. I remember once renovating a house that had a painting on the wall with a value of hundreds of thousands of dollars. I wouldnt have paid five bob for the bloody thing. I value property with a material value, plus adding or subtracting other aspects that influence value, to come up with a realistic valuation.
In this case i would say material value might well be $3-00, but deduct a plunging market, financial uncertainty, and middle east turmoil, to name just a few of the uncertainties. A falling tide takes all ships down, Bears cant count,in bad times people like me batten the hatches down, stick up a storm sail, and throw out the sea anchor. If the value is $3-00 in material value, and the share price is what it is then the punters are either stupid, or running scared. If they are running scared you should be wary, the herd moves in mysterious ways. Macdunk

I feel the same frustration, as others appear to hold - well actually, I oscillate between at annoyance and pity. The NZX 50 is 20% undervalued - but it is the usual situation heading into the final phase of a downturn. And yes, it is annoying the NZO is even more grossly 'undervalued'. The NZ dollar is set to drop, Bollard (probably) wont raise interest rates - in short, NZ equities will rise to it's more normal 5% undervalued. Along with the general market sentiment - NZO will do the same. In the mean time - patience and assurance that the cycle will complete and hundreds of panic mongers will kick themselves over bailing out on a soggy market - either because they had to because they didn't pay attention to their risk profile or because of itchy trigger fingers.
Anyway - the art work comparison is fallacious. Oil and Oil paintings are two different things - Oil in itself is useless and has no human use value whereas an oil painting is an end product of the consumption of oil (or more broadly resource) to provide a consumable product for direct personal benefit. The painting is an end consumer product and is entirely subject to human perception of worth, the input consumables can have metrics applied to derive a costing.
(Addendum: putting gas in your tank to make you car go is does not make motor spirit a direct human benefit - the transportation of goods or persons is the benefit - therefore gasoline is an input to that benefit. Remember - you can't drink petrol - well, not for very long.)

[bermuda]

Stop having wet dreams.. LOL

Get the average of all the brokers valuation and you have you value for NZO.



Dont be too optimistic. There is a likely chance McCain may get in. If he does, then all hell will break lose. McCain is a loose cannon, worst than Bush. Gold will be $2k and oil will be $400.

McCain is a real party man. Given to singing the Beach Boys number

"Bomb,bomb,bomb,bomb Iran".

This could be one of the biggest disasters of all time.

Go home America and let Obama sort it out.

America, they just have to feed their war machine. It improves the economy

[upside_umop]

Did anyone see tv3 business news this morning ?-I just caught the ending and am not sure if someone said nzo were valued at over $3

I think he said NZO $2 soon and some brokerage houses have $3 on PRC. He emphasised PRC should not be related to thermal coal and that coking coal remains in hot hot demand.

[tim23]

Just watched it, above comment is correct, $2 NOG & $3 PRC, Warren Head from the Headliner.

As for the art on the wall v oil comment - gee Duncan you are clutching at straws now, its tragic.

[Nitaa]

I remember once renovating a house that had a painting on the wall with a value of hundreds of thousands of dollars. I wouldnt have paid five bob for the bloody thing. Macdunk

Was it an OIL painting. You may find that valuation was done when oil was at $30 per barrel. If so i suggest you go right back and pay them the couple of thousand for it.

[zorba]

ZORBA, The way the middle east is going there is every likelyhood that the price of oil reaching $300 a barrel. We only have one glimmer of hope and that is Bush will soon be gone. Hopefully the yanks will go home letting the world settle down into some stability.
I hope you are right its your money you invest with not mine.
If the price of oil goes up it will bankrupt most economies your money might be worth very little if that happens. If that happens the only thing worth having is material things that you can see. GOLD, SILVER, LAND, property, etc. The Macdunks of this world watch with an ever growing interest at your progress and gleefool response to the price of oil going up.
Goodluck with NZO hope you are right just remember bears cant count. Macdunk

McDunk,

You are right in one sense, it could easily end up in huge catastrophic mess ......

If things get out of hand in the Gulf, and I think there is strong chance of that happening, then yes $300 oil price is possible followed by major world recession and collapse of oil price.

If this scenario looks like happening and the price of oil is north of $200, then I will be looking to get out of NZO and into bonds.

In the meantime I hope sanity prevails and that the world can get through the current financial mess, brought on by our illustrious American friends and their shonky banking systems, if we can get past this fraudulent banker/rating agency scam mess then I am hoping for calmer waters next year ......

IMOH current price of oil reflects genuine supply - demand pressures and not speculumation, current contango oil pricing is reflecting arrival of Peak Oil .... will the world oil industry be able to put in place new production to the extent of 4 to 5 new Saudi Arabias ove the next 10 years ??

I doubt it and the oil futures are responding to that unlikely scenario.

For more discussion on the need for 4 to 5 new Saudi Arabias, see my posts 32 and 33 on:

http://www.sharetrader.co.nz/showthr...?t=6144&page=3

Z

[POSSUM THE CAT]

Zorba I believe inflation adjusted bonds are no longer available. And if oil gets above $200.00 per barrell in the short term you will inflation rates similar to Zimbabwe your bonds will be practically worthless or the bank or whatever that issued them no longer exists

[Drone]

McDunk,

You are right in one sense, it could easily end up in huge catastrophic mess ......

If things get out of hand in the Gulf, and I think there is strong chance of that happening, then yes $300 oil price is possible followed by major world recession and collapse of oil price.

If this scenario looks like happening and the price of oil is north of $200, then I will be looking to get out of NZO and into bonds.

In the meantime I hope sanity prevails and that the world can get through the current financial mess, brought on by our illustrious American friends and their shonky banking systems, if we can get past this fraudulent banker/rating agency scam mess then I am hoping for calmer waters next year ......

IMOH current price of oil reflects genuine supply - demand pressures and not speculumation, current contango oil pricing is reflecting arrival of Peak Oil .... will the world oil industry be able to put in place new production to the extent of 4 to 5 new Saudi Arabias ove the next 10 years ??

I doubt it and the oil futures are responding to that unlikely scenario.

For more discussion on the need for 4 to 5 new Saudi Arabias, see my posts 32 and 33 on:

http://www.sharetrader.co.nz/showthr...?t=6144&page=3

Z

Zorba why if things got out of hand in the gulf would you get out of NZO? It would be the one thing worth owning in that scenario, (apart from defence stocks) asumming it could survive the general market carnage of course..

[foodee]

Zorba why if things got out of hand in the gulf would you get out of NZO? It would be the one thing worth owning in that scenario, (apart from defence stocks) asumming it could survive the general market carnage of course..

D
Care to share your ideas on these 'defence stocks'

cheers

[zorba]

Zorba why if things got out of hand in the gulf would you get out of NZO? It would be the one thing worth owning in that scenario, (apart from defence stocks) asumming it could survive the general market carnage of course..

Drone,

You make a good point ..... NZO would initially be a good bet should oil run up to $200 - $300 .....

But what happens after that, does the world head into a serious economic meltdown ?

If so will the demand for oil collapse, or at least fall way below current supply capability ?

If that happens oil price should also collapse or seriously reduce and take many oilers with it. Its all a huge landscape of uncertainty, and coking coal miners will also be hit, so no doubt NZO and PRC would both take some serious hits ......

So if oil is heading for $200 - $300, then maybe one should be starting to cash up and get out before a global meltdown.

Maybe since it seems that inflation adjusted bonds no longer available (see Possum's post above), maybe then best option as McDunk suggests is GOLD BARS !!

Alternatively if deep recession and monetary deflation is the outcome then just having the funds sitting in Kiwi Bonds earning interest may also be safe and useful, maybe along with a stash of gold bars for diversification.

Lots of "maybes", its all very unpredictable, where will it all end ....

If the Iranians keep on firing rockets and the Israeli keep up their war games, its going to be a serious bloody mess, and if the Strait of Hormuz gets blocked for any length of time then the global economy is stuffed, and no doubt huge numbers of pension funds and and individual savings will go down the dunny !!

Z

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