Well it's official. ATPG Oil & Gas files for Chapter 11 bankruptcy protection. Here's the link:
For those with any history on my blog, I wrote some very negative things about ATPG back in 2010. The company was way, way over leveraged and the clock finally ran out. What I did run into was a firestorm of controversy from so called "value investors" who thought ATPG was a bargain. One commenter said it was worth $90/share. I was lectured by many on the "value" in ATPG.
One fellow said I didn't understand the economics of "reinvestment" (since that is somehow different from "investment"). He was full convinced he was going to make "ridiculous excess gains" at the expense of the ignorant (myself included).
The math behind financial statements isn't hard, the problem is we often look at them with glasses that distort reality. Those glasses ignore facts that don't align with what we want to see.
Anyway, here are some links from my previous blog post (in order):
I posted the same article on Seeking Alpha, check out the controversy in the comments section.
Looking back at those posts, I am still amazed at how strong the cult following for ATPG was. I had a ton of comments on those above posts telling me where I was "wrong". I'm still surprised at those who argued with me that ATPG had earned a profit.
Devon Shire (aka CanadianValue & aka Swizzled)
Clearly this guy has no idea what he's talking about. I see that he has now changed the name of his blog to be the same as mine. It's pretty low of him to try and steal traffic to his blog. I have tried to email him (through several sources) to see if he'll change it, but so far no reply.
We had some lengthy debates since I started my blog and so far he's batting 0 for 2. IF YOU HAVE FOLLOWED HIS ADVICE, YOU WOULD HAVE LOST MONEY.
I find it amazing that he now charges for an investing newsletter, mainly targeting small to mid cap oil and gas. If anyone reading this subscribes to his newsletter, please email me a copy and I'll gladly review his recommendations.
Anyone who knows me understands how much this stuff burns me. The vast majority of investment advice, professional or not, is worthless. The people who listen to them deserve what they get, however, the so called advisor still keeps the fees. The mutual fund industry is the worst.
So what have I learned from this whole experience? First you must often stand alone and stick to your principles in the face of intense opposition. Facts are facts, don't ignore them. The vast majority of "value investors" on the internet are useless. Often these people read one misguided individual who in turn repeats the same nonsense and the cycle is repeated until a whole mass of "investors" on the internet believe their own story (I wonder how many of them actually read the ATPG annual reports and financial startments).
On days like this I am reminded of a quote from Warren Buffett.
The market, like the Lord, helps those who help themselves. The market, unlike the Lord, does not forgive those who know not what they do.