I like Oil

[Ed_The_Gypsy]

After my last attempt at buying an individual oil stock at what I thought was a good price, I am done with individual stocks. The market is too unpredictable and volatile. I'll stick with index funds and maybe 1 or 2 vanguard mutual funds.

Me too. I had good stocks. They are still good stocks but a whole lot cheaper than when I bought them.

Sent from my SM-G900V using Early Retirement Forum mobile app

 

[harley]

Me too. I had good stocks. They are still good stocks but a whole lot cheaper than when I bought them.

Me too, but I'll just take a nap and at some point they'll be higher again. One thing I know is that I can't predict when.

 

[VFK57]

After my last attempt at buying an individual oil stock at what I thought was a good price, I am done with individual stocks. The market is too unpredictable and volatile. I'll stick with index funds and maybe 1 or 2 vanguard mutual funds.

For decades I had my 401K in mutual funds, not anymore. What I noticed that if Market goes up 10% my funds were up 5 to 8%. Yet when Market was down 10%, my funds were down 12 - 15%. I also can not state that I am good in picking individual stocks.

 

[ERD50]

For decades I had my 401K in mutual funds, not anymore. What I noticed that if Market goes up 10% my funds were up 5 to 8%. Yet when Market was down 10%, my funds were down 12 - 15%. I also can not state that I am good in picking individual stocks.

So what do you do?

-ERD50

 

[VFK57]

So what do you do?

-ERD50

I keep individual dividend paying stocks in pharmaceutical, REITs, oil. When some group going down, other gain, not equally. In regard to total gain the index funds are probably better yet dividends are part of our income and whenever my wife decides to retire we may add more to current dividend paying stocks, re balance our AA . I checked some dividend paying funds but somehow was not attracted to any. What would you recommend?

 

[target2019]

For decades I had my 401K in mutual funds, not anymore. What I noticed that if Market goes up 10% my funds were up 5 to 8%. Yet when Market was down 10%, my funds were down 12 - 15%. I also can not state that I am good in picking individual stocks.

I keep individual dividend paying stocks in pharmaceutical, REITs, oil. When some group going down, other gain, not equally. In regard to total gain the index funds are probably better yet dividends are part of our income and whenever my wife decides to retire we may add more to current dividend paying stocks, re balance our AA . I checked some dividend paying funds but somehow was not attracted to any. What would you recommend?

I understand your points. In our brokerage we've settled on SCHD ETF, which holds 256 companies presently. This is to build out some diversification around an individual company holding.

 

[ERD50]

I keep individual dividend paying stocks in pharmaceutical, REITs, oil. When some group going down, other gain, not equally. In regard to total gain the index funds are probably better yet dividends are part of our income and whenever my wife decides to retire we may add more to current dividend paying stocks, re balance our AA . I checked some dividend paying funds but somehow was not attracted to any. What would you recommend?

Probably nothing that would interest you. I'm interested in total return, I don't see the point of looking at dividends separately from total return (other than tax consequences, which has me wanting to minimize divs in a taxable account).

I also have little interest in sectors, I like diversification.

-ERD50

 

[sengsational]

Here is a discussion about energy stocks which seems to argue against just buying a US index. I think it might be suggesting that being overweighted in energy is better. I'm not a regular reader of this thread, but I'm always seeing it in the recent threads, so thought readers here might be interested.

The Case for Investing in Energy Companies | Marotta On Money

 

[Totoro]

This is a statistical - and dare I say static - approach to energy companies, as it doesn't take into account the huge technology wave that's underway in alternative energy. Not to mention innovations within the sector (shale oil).

The basic argument is "what goes down must come up", which for the whole sector might not be true this time.

Time will tell.

 

[aja8888]

The basic argument is "what goes down must come up", which for the whole sector might not be true this time.

Time will tell.

Today's Houston Chronicle article quoting EOG's CEO on oil production indicates they are poised to drill and produce at 40% lower costs than during the good times due to reduced contractor costs (rigs, frac jobs, competions). They state $60 oil is all it would take and that may be within two years.

 

[RobbieB]

Gas is going up now here. I think the low where I live was $2.50/gal, and the last time I filled was $2.85.

That's another reason I went solar. I don't see a finite resource getting cheaper over the long run.

 

[sengsational]

This is a statistical - and dare I say static - approach to energy companies, as it doesn't take into account the huge technology wave that's underway in alternative energy. Not to mention innovations within the sector (shale oil).

The basic argument is "what goes down must come up", which for the whole sector might not be true this time.

Time will tell.

Yes, these guys do take a statistical approach to investing, for sure. The article does address the technology wave to say that nobody cares more about leveraging the wave than the big-boys. Look at what they're trying to do in Florida's upcoming election: offering an amendment that would make them the exclusive king of solar. And they argue that it's the predictability/regularity of the up/down that makes energy a more interesting prospect.

 

[wmc1000]

What impact might this have on Exxon stock? - it says Exxon now says it may have to write down value of oil stocks still in the ground.

http://www.nytimes.com/2016/10/29/b...o-declare-lower-value-for-oil-in-ground.html?

 

[aja8888]

What impact might this have on Exxon stock? - it says Exxon now says it may have to write down value of oil stocks still in the ground.

http://www.nytimes.com/2016/10/29/b...o-declare-lower-value-for-oil-in-ground.html?

Asset base will decline in value. Earnings may fall if those assets are produced and produce less margin. Layoffs of employees may help earnings.

Personally, I hope the stock goes into the $60's so I can load up on more shares.

 

[hesperus]

Oil up nicely this morning on production cut hopes. Will this one actually come together? At least for now seeing some nice gains in my MLP's.

 

[aaronc879]

Oil up nicely this morning on production cut hopes. Will this one actually come together? At least for now seeing some nice gains in my MLP's.

If your MLP is anything like my oil stock then it's just going back up to where it was a week ago. It had been falling in anticipation of the OPEC deal not going thru. Not that big of a deal but it should trend upward now that the OPEC deal is good. Of course I just sold 2000 shares a week ago. That's probably why it's going up 7% today.

 

[hesperus]

If your MLP is anything like my oil stock then it's just going back up to where it was a week ago. It had been falling in anticipation of the OPEC deal not going thru. Not that big of a deal but it should trend upward now that the OPEC deal is good. Of course I just sold 2000 shares a week ago. That's probably why it's going up 7% today.

Pretty much, with the exception of PAA, which is up about 9% today and a bit higher than a week ago. It's been a roller coaster.

 

[Breedlove]

How can Oil prices ever really go up again , you need a very strong demand or a major supply problem . I don't put any faith in production cuts or agreements . After 30 years in the Oil Field service industry I see technology today that is so far ahead of where it was just a year ago . As soon as OPEC slows down then the U S boys will increase their production again.

 

[hesperus]

domestic crude production also down more than expected, which is also driving up prices - at least for today.

 

[Breedlove]

People playing Shorts . Just wait .............Remember this they can bring a U S west Texas Permian basin well in less then 30 days . That one well now has as many as 80 stages . That well will not pump as long as most international wells ( Saudi Arabia wells have lasted 30 years ) But easier to produce with all the logistics and politics involved . I don't see oil really going much over 60.00 but it has happened before .

 

[haha]

I don't see oil really going much over 60.00 but it has happened before .

And it will again.

One thing that markets never offer is price stability

Ha

 

[ESRwannabe]

Looks like Saudi Arabia finally capitulates. Too late for me. Took my losses and moved on a few months ago. I should have never gambled on MLPs in the first place given that my past and current base case is stagnation. Of course oil is not going to be great in such a scenario.

So if oil goes up I guess we will suddenly have more inflation. With Trump planning to spend money via infrastructure and tax cuts, and now oil going up. I guess it may look like we have inflation for a while, but I don't buy it long term.

The global birth rate decline that's been going on for decades is going to start having an impact. Baby Boomers are going to increasingly be spending less money outside of health care. There will be a housing decline at some point given the demographics for house ownership. It looks like Baby Boomers are deciding not do downsize their housing for now, but that will only last so long before the issue gets forced. Nobody lives forever. Lastly, I think the technology gains in AI and robotics will more than offset any wage inflation that comes from the current anti-globalization pro-nationalist zeitgeist.

My base case still remains very slow growth stagnation. In which case, oil is not going to get too crazy. Then again who knows with OPEC. I'm obviously rooting for US shale to kick their rear-ends. I think their effort to hurt US companies was pretty much a total failure.

 

[harley]

I finally made it up past my buy in price on a number of oil stocks in my play money Roth. I put in some sell limit orders. Now it's wait and see time. If I manage to get out with a small profit I'll wait for the inevitable drop and buy again. I'm not as sophisticated as many of you with options and puts and such. Just straight "buy low, sell higher" (or try to anyway).

 

[aja8888]

How can Oil prices ever really go up again , you need a very strong demand or a major supply problem . I don't put any faith in production cuts or agreements . After 30 years in the Oil Field service industry I see technology today that is so far ahead of where it was just a year ago . As soon as OPEC slows down then the U S boys will increase their production again.

^^^^This^^^^

People playing Shorts . Just wait .............Remember this they can bring a U S west Texas Permian basin well in less then 30 days . That one well now has as many as 80 stages . That well will not pump as long as most international wells ( Saudi Arabia wells have lasted 30 years ) But easier to produce with all the logistics and politics involved . I don't see oil really going much over 60.00 but it has happened before .

and This ^^^^^

Companies are drilling in the Permian right now and have been all year. Almost 1/2 price well costs, and lifting well under $30/BBL

 

[Breedlove]

If we have some major inflation , we print a lot of U S dollars then oil will go up quickly .