For several years now I have been writing blogs on 8 websites,4 on Wordpress,2 on Google Blogger,1 on Linkedin,and 1 on Tumblr.They all had a business slant to them.But in fact most of the blogs have focussed on some change in the environment that has not been factored into the valuation of a company or in some cases several companies.My blogs rarely just gave a different business forecast for the same factors or situation as other analysts.An example of this is seen in the price of Canadian oil companies.I made several blogs discussing the fact that the size of oil reservoirs has been overestimated.Oil pools increase in viscosity as you go deeper in the reservoir.And in fact at the bottom of the reservoir is a layer of tar or asphalt.Slightly above the bottom layer is one or more layers that are difficult to pump to the surface and to refine.Once this fact is realized and discounted, the estimate of total oil supply will be reduced. And since the demand is constant or slightly increasing, the price of oil will inevitably rise over time.So it is likely that all Canadian oil companies is now or soon will be a bargain.
The above analysis is only an example of the kind of situations that I described in my past blogs.There are other examples such as the size of the gold deposit in the Australian mine called the Fosterville mine in the state of Victoria in Australia.But it is increasingly difficult to find situations where the value of resources has not been factored into the market price of the resource and of course the underlying stock.So for this reason and other difficulties I have decided to increase the scope of all 8 blogs.I,especially realize,that I have not utilized as much as I should have from my Tumblr website which I usually make smaller blogs on.
The kind of thing that I will focus on are changes in trends or in the environment that will change (at first gradually) the valuation of a company and eventually the price of it's shares.It is rare to find large and clear changes.But I cannot make blogs continuously on large changes.I am content to find small changes on very valuable resources.This can still lead to fairly large changes in the value of a company and it's share price.In the past I looked almost exclusively on the change (especially the increase) in the share price of a stock.But the new blogs will look at other changes also;not only whether a share price will move up and by how much. An example of this is the discovery that the long awaited Trans Mountain pipeline is open and transporting oil to the B.C.coast.This allows Canadian oil to be exported to Asian countries like Japan and South Korea.Here the price is the Brent price rather than the W.T.I. index and as a result the Canadian index(C.W.S.) has been rising faster than the W.T.I. which it is tied together with.The result is that the differential between the American index (W.T.I.) and the Canadian Crude index(C.W.S.) is narrowing.This will benefit all Canadian oil production,not just oil exported to U.S.A. As the percentage of oil exported to Asia increases the differential between the W.T.I. and the C.W.S.will dissipate.
