Nawar Alsaadi's  Instablog

In September 12th 1962, in his landmark speech president Kennedy said:

"We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard"

This line has stuck with me since I was a child. And since life has taught me that everything worthwhile in life is hard to get; hard work, persistence and conviction is what differentiate between those who attain their dreams and those who lag behind.

For me an investment in a stock, is an investment in a physical company, in its people and its products, it is not an investment in a stock ticker, real life doesn't blink like a ticker, real life moves at its own rhythm.

Traders have the impression that great companies are built on the excel sheet of a bank analyst; forgetting that great companies are built in the field. Building and introducing a new technology has never been an easy task, but it is that desire to innovate that drove and shaped humanity since the birth of time. The first airplane, the first automobile, the first space shuttle, the first computer, the first oil rig and so many other inventions took a tremendous amount of time and efforts to make them a success, the path was never a straight line, but with their success they changed the world and made our life richer and better.

Many years ago Gasfrac was an idea, it was a collection of electric impulses in a brain of a human being like you and me; today it is a company employing hundreds of people, generating a quarter of a billion dollars in annual revenues and producing real game changing results for companies like Husky in the Cardium and Quicksilver in the Niobrara. This idea transformed itself into reality because of the endless hours of work, sweat and determination the pioneers of this technology invested in this endeavour.

What those people created is real wealth for both society and themselves, this is how economies grow and this is why free enterprise works. The traders and analysts who sit at their desks and criticize why this company did not deliver according to their excel sheets have not accomplished in their lives a tiny fraction of what this group of people managed to build.

Gasfrac's path to success won't be easy, there will be ups and there will be downs, but make no mistake about it: progress is being achieved. Yes, it is not perfect and not always lineair, but this is real life, we have stops and we have starts.

I can assure you all that Gasfrac's new management team is undertaking a herculean effort to guarantee this company continued success, men and women with decades of experience are putting everything they got into this effort to carve a piece of the multi-billion dollar fracturing market for Gasfrac. I have talked to many of them and I know that those people are intelligent, able and accomplished, they are not living a delusion and they know that they can achieve the goal they set for themselves.

Those of you who think this company will not be able to break through in the United States are sorely mistaken; contracts will be signed, business will be generated and Gasfrac will be multiple folds larger within a few quarters from today. Real business takes time to mature: developing a strategy, implementing it, talking to customers, dealing with their concerns, deploying new sets, training new staff, negotiating, marketing, continued R&D improvements, competing effectively ... etc takes time, and takes a lot of it. This company will not be built at the speed of the ticker; it will be built at the speed the fracturing market can bear.

If you are truly an investor in this company and have a true conviction in this technolog; heavy sell off days like today, should not shatter your confidence, a person's true character is built on his/her ability to face adversity, and not from their ability to coast on success. We may have lost a battle today, but we are winning the war.

And no, I don't call this love, I call it conviction.

Disclosure: I am long GSFVF.PK.

Finally few hours after the release, and after talking with a number of fellow shareholders, it is time to put things in prospective.

Gasfrac has disappointed a lot of believers, operationally the company over promised and under delivered for several quarters, I would say for many the story has regressed from steady growth to: does the technology even work?

As usual the truth is somewhere in between, the technology is certainly working, too much empirical data has been released from several formations to indicate that the technology works well in a number of basins; however it is clear that data is not enough, the company needs to deliver the service quicker, better and does it safely, those imperatives seems to have slowed down growth, the growth in capacity has run widely ahead of demand, something the new team already addressed in their Q4 release when they stopped capacity additions.

It is also clear that management is also limiting expectations for the whole year at a range of $250m to $300m; this is significantly lower than the average of $370m expected by the street, at $250m to $300m growth in 2012 will be 56% to 88% from 2011. Those are positive and courageous steps; we finally have proper guidance from the company, thus we are not subject to analysts varying expectations.

Starting from tomorrow and after the severe sell off, the company will basically have to re-prove itself, this will only be done through:

- Signature of additional long term contracts.

- Translation of those contracts into revenues and cash flow.

- Progressing with its partnerships model and demonstrating the revenue potential of such a model.

The management team has a window between now and the end of the year to show that the obstacles the company is facing can be overcome; Q1 was the last quarter in my book that can be blamed on lack of time to react to conditions created by the previous team.

Long term the jury is still out, I don't think this $20m miss is the coup de grace to the company or to LPG fracturing, but they are certainly cruising too close to the edge; without concrete steps in the next few months conforming increased adoption, the likelihood of Gasfrac turning into a limited operator will look increasingly likely (flat scenario number 4 in the article I published today).

Disclosure: I am long GSFVF.PK.

In a new twist in the Goldman Sachs fraud allegations and in an effort to safeguard its business and generate new revenues, Goldman Sachs (NYSE:GS) is officially launching its Collateralized Religious Obligations (CROs) product , a CRO is based on a complex mathematical formula to slice and dice existing religions and package them into a new offering.

"One reason we have developed this product is due to the evolving nature of the religious market" states David A. Viniar, Goldman Sachs CFO, Mr. Viniar added "Muslims and Jews are tired of not being able to eat pork, thus we developed a CRO where the Judaism and Islam none-pork eating component is stripped and replaced with a God approved pork eating component from Christianity, thus allowing Muslims and Jews to eat pork without violating God's wishes"; it is a win - win situation.

Mr. Ahmed Misdar the Imam at AL-Azhar, one of Islam's greatest religious learning centers based in Cairo informed Reuters "We never knew how to deal with Islam restrictions before Goldman's CROs; today if you need a fatwa modified to fit your lifestyle, you can call Goldman, they will custom make you the product and find you a buyer on the hell side of the trade".

Immediately after the announcement S&P rated the product Triple Cross, Moody's (NYSE:MCO) gave it a Triple Crescent rating, while stating that it is "virtually hell proof". In addition the Vatican in partnership with AIG (NYSE:AIG) have started to sell Heaven Default Swaps (HDS) on all Goldman Sach's issued CROs.

However, due to the current Collateralized Debt Obligations (CDOs) debacle, rumours quickly spread that Goldman is offering CROs handpicked by Satan, and has been shorting the product outright, by buying HDSs from the Vatican and AIG.

Mr. Lloyd Blankfein quickly denied those allegations, he stated "Goldman is only market making between heaven and hell, just as God does", he then added "Does God ever disclose on which side of the trade he is?".

Nawar Alsaadi, reporting live from Goldman Sachs New York head quarters