Zoltan Ban

The Globe and Mail (Alberta Edition) - - GLOBE INVESTOR WEEKEND - BY LARRY Mac­DON­ALD

Oc­cu­pa­tion

Au­thor and writer

The port­fo­lio

In­cludes shares in Sun­cor En­ergy Inc., Chevron Corp., Bar­rick Gold Corp. and Ur-En­ergy Inc.

The in­vestor

Zoltan Ban is the au­thor of Sus­tain­able Trade, a book on sus­tain­able eco­nomic de­vel­op­ment. He also has a de­gree in eco­nom­ics and writes for in­vest­ing web­site seekingal­pha.com.

How he in­vests

“I tend to in­vest pre­dom­i­nantly in things I un­der­stand,” Mr. Ban says. Hav­ing stud­ied com­mod­ity mar­kets ex­ten­sively, this means a fo­cus on re­source com­pa­nies.

Oil pro­duc­ers are of spe­cial in­ter­est. He be­gan buy­ing their shares near the end of 2015, when crude oil was trad­ing at $40 (U.S.) a bar­rel – af­ter col­laps­ing 60 per cent over the pre­vi­ous 18 months.

Mr. Ban’s de­mand and sup­ply anal­y­sis had con­cluded that oil was due for a re­bound be­cause the mar­ket price was be­low the “longer term break-even price for firms in­volved in ex­trac­tion.” In short, low prices would push high-cost pro­duc­ers to trim pro­duc­tion, re­sult­ing in tighter sup­plies in the mar­ket­place.

The price of oil con­tin­ued to slide af­ter he bought. But he was sure of his the­sis and kept buy­ing. When oil prices turned up in early 2016, his stocks ral­lied and be­came prof­itable.

He is still hold­ing his stocks on the ex­pec­ta­tion oil prices will go higher yet. Sup­ply is still con­strained, as the oil re­cov­ery re­mains mod­est so far. Plus, de­mand should trend up­ward as the global econ­omy con­tin­ues to ex­pand.

Sun­cor is a favourite. It is grow­ing pro­duc­tion even though oil prices are still rel­a­tively low, “which sets it apart from stag­nat­ing oil ma­jors such as Shell and Chevron.”

Best move

“Bar­rick Gold hap­pens to be my best in­vest­ment so far,” Mr. Ban notes. “I bought its stock in Novem­ber, 2015, and it is up more than 100 per cent” in an en­vi­ron­ment of height­ened geo-po­lit­i­cal risks.

Worst move

He took an 85-per-cent loss over a decade ago on his first in­vest­ment, Ura­nium One Inc. The les­son learned was that he needed to ed­u­cate him­self more in or­der to do a bet­ter job eval­u­at­ing the fun­da­men­tals.

Ad­vice

One not only needs to self-ed­u­cate but must also have the pa­tience “to wait for the fun­da­men­tals to play out,” Mr. Ban ad­vises. “They rarely play out as ex­pected.”

Want to be in Me and My Money? Con­tact Larry Mac­Don­ald at mc­col­umn@ya­hoo.com

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