Monday, April 8, 2013

Random Thoughts about HRT Participacoes

HRT gives you (3) chances this year to make multiples on your money with their Namibian prospects Wingat, Murombe, and Moosehead.  I expect the stock to continue to run up in anticipation of Wingat; to pull back in the probable case of failure at Wingat; run up again as the results of Murombe become imminent; pull back in the probable case of failure at Murombe; and run up again as the results of Moosehead become imminent.  In the absence of any positive results, I will maintain an overweight position until two to three weeks before results of the third prospect will be known, then I will trim my position to my conservative estimation of the Kelly Criterion.

1-HRT-11-AM well which is currently being drilled in the Solimoes basin also provides a chance for downside protection.

Don't bet more than you can afford to lose!  A Macondo style blowout could wipeout your entire investment.  Having said that, I wish I could find 20 stocks with this kind of asymmetric risk/reward profile and spread my portfolio across all of them.  Please contact me if you know of any!

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