Introducing the CVI - Punch Card Portfolio Newsletter

I write a weekly investment newsletter. This newsletter involves the development of a focused portfolio of undervalued securities. The subscription price is $20 per month (cancel any time). Every investment idea I recommend will be one I purchase for my own portfolio. If you have questions prior to subscribing shoot me an e-mail (Swizzledxxx@gmail.com)

Please note I'm running a low-tech operation and that the newsletter is sent by me via e-mail. There will be a delay between when you pay and when you receive your first e-mail (usually a couple of hours).

Subscribe to CVI - Punch Card Portfolio Newsletter

Wednesday, October 31, 2012

Should We Buy Cobalt In Advance of 2013 Drilling?

My latest Seeking Alpha article:


The business model of an offshore exploration company is to go out into the middle of the ocean and drill a well that costs over $100 million, with a success rate that is likely somewhere around 1-in-5. The prospect sizes are enormous, so if they hit oil chances are it is going to be a monster find. However, if they don't hit oil, you have just flushed $100 million down the toilet.
The business model of an exploration company obviously does not fit well with my investing style, which is based on Buffett. Exploration success equals a big win for investors, while exploration failure equals a big loss (all of the cash invested in the well). It is hard to invest in these companies and believe you are following Buffett's rule No. 1.

No comments:

Post a Comment