Victoria Oil & Gas: Fundamentals & Valuation Summary

The market in shares is different from, say, the market in oil, or any other commodity. The market price for oil IS subjct to supply and demand, such that the price will rise if demand exceeds supply, and vice versa.

Now, the price of shares in a business merely reflects the value of its future income streams, minus a discount - the discount being the compensation investors want for the risk they take in making their investment.

Take VOD, which has enjoyed a 30% rise these past few months. This rise is NOT because there is a shortage of shares - as we know, we can trade many millions a day if we wish. It's because the mkt is pricing in higher future earnings and a lower discount rate. The same (in reverse) is true of BP. Its shares have fallen 20% not because there is a glut of BP stock, but because the mkt is pricing in lower future earnings, and applying a higher discount rate (to reflect the greater likelihood of falling oil prices).

All of this is pretty self-evident, so forgive the lecture. It's just that PIs bang on about BUYS and SELLS as if they made any difference. They don't. All they should do is prompt one to ask, 'Why the buying (or the selling)? But believe me, BUYS and SELLS don't amount to a hill of beans when it comes pricing the value of a business. Value depends on future income. Supply and demand (of the stock) has sweet FA to do with it.