Thursday, May 28, 2015

Sold Dragon Oil (LSE:DGO)

Sold all my 1700 shares at 687.50p on 26th May.

The majority shareholder ENOC indicated in March that they would make an offer, finally mentioning a 735p price on the 21st of May.  Not as much as I'd hoped, and the market seems doubtful the bid will go through.

ENOC is a refiner who badly needs E&P capacity to sell oil domestically.  A previous opportunistic bid in 2009 was defeated by minority shareholders.  Don't know what will happen now - the takeover may fall through, or they may increase the price.

This company is not a long term investment, despite the good numbers.  "Oil" and "Turkmenistan" make it too risky to build a meaningful stake.  Don't want to be left holding it if the takeover falls through.  Better to sell now for a quick 20% gain.

Profit is SGD 4437.43, including dividends.  Right now, the results, and the process - being able to wait for a commodity to become undervalued, find ways to invest in low cost producers while managing risk, and waiting for the payoff - mean more than the money does.  Prove you can make a plan and follow it.

Incidentally, Turkmenistan's president just unveiled  a 65ft high, 24k-gold, overcompensating statue of himself riding a horse.