Also, For Those Who Are Wondering Why XOM is Tanking So Hard

[Zhong Lu + 845]

This song explains it:

 

Note the bull-bear war at 65-70 for the entirety of the second half of 2019.  XOM's price would regularly bounce, but each bounce was weaker then the previous one.

When 70 finally broke and there was no meaningful rally at 60.....

As Led Zeppelin says: "When the levee breaks, mama you gotta move."

Edited February 26, 2020 by Zhong Lu

[Zhong Lu + 845]

Speaking of which, 49 on WTI broke.  

"Crying won't help you.  Crying won't do you no good.  

When the levee breaks mama you gotta move.

Ooo ooo.

All last night sat on the levee and moaned.

All last night sat on the levee and moaned.

... Going... going down.  Going down now. Going down.  Going down now."

Edited February 27, 2020 by Zhong Lu

[Douglas Buckland + 6,308]

Rob Plant put you up to this, didn’t he?😅😂😭

[Zhong Lu + 845]

It's a good song! 

[George8944 + 128]

LED Z is one of my favorite groups.  My second favorite for blowing out the headphones is Linkin Park.  Third is Rachmaninoff.  He's not a rocker obviosuly,  but his music is so very complex in parts juxtoposed with these soft alarmingly simple preludes.  He sends my brain into overload.  I often catch myself mezmerized and gazing into space while I listen.  (listening to him now! )   Linkin Park and Led Z don't do that.

Back to business.   XOM is dropping because their balance sheet is crap and in a generally falling market they no longer represent a flight to safety.   Their dividends and buybacks for the last several years have been funded with debt.   Now that things aren't so rosey, smart investors are going back and giving fundementals a second look.   For young investors they probably don't know what that means!

Buy a put option and enjoy the ride down.  That's what I've done.   (I started selling when China quarentined Wuhan. )

[Zhong Lu + 845]

What's a fundamental? 

[Gerry Maddoux + 3,627]

33 minutes ago, George8944 said:

XOM is dropping because their balance sheet is crap and in a generally falling market they no longer represent a flight to safety. 

Check out the finds in the Stabroek Block off the coast of Guyana, George. There's lots of natural gas, but the oil is a find of the century. 

An even better bet though is Hess, which owns about 40% of the Stabroek, with almost none of the problems. 

And please, don't talk with your finger in your mouth!

[Zhong Lu + 845]

25% position in XOM.  51.   Due for a relief rally.  Green now, so there's evidence of buying.

A bit oversold and their dividend yield is 6% at current prices meaning that it's bagholdable- if I should so desire (unlikely that I should desire it, but who knows).  Should attract buyers.

EDIT: MACD lines for XOM are at -3 and -4. LOL.  

EDIT: On the other hand, the rally in the S&P is failing.  Making it a smaller position. 15%. 

Edited February 28, 2020 by Zhong Lu

[George8944 + 128]

21 hours ago, Gerry Maddoux said:

And please, don't talk with your finger in your mouth!

You are a funny guy.  There big find has no bearing on their current balance sheet.  XOM is not a high tech company that can run on venture capital money without turning a profit.   

That gas in the ground is of little value at today's depressed prices.  Maybe someday it will generate cash flow for them, but until then they have bills to pay and wall street isn't buying the future promise.  They want ROI/ROC now.

The question was why are they tanking TODAY, not what is their potential value 3-5 years from now.  Those are two different questions.

[George8944 + 128]

7 hours ago, Zhong Lu said:

25% position in XOM

Wow!  You must not be a long term trader.  I limit all my trades to no more than 5% of my portfolio.  Money can be made many ways. so I'm not passing judgement on what your doing.  I wouldn't be able to sleep swinging for the fence all the time.

I bought options on the oil & gas EFT XOP.  I already set my profit point sell order. MY loss is capped, so I'm less worried about that side. I have until April 20 to hit my proft target.

[George8944 + 128]

BTW, today i heard REO Speedwagon's song Riding the Storm Out.  I thought about your LED Zeppelin comment and thought this song was applicable too.

[Zhong Lu + 845]

1 hour ago, George8944 said:

Wow!  You must not be a long term trader.  I limit all my trades to no more than 5% of my portfolio.  Money can be made many ways. so I'm not passing judgement on what your doing.  I wouldn't be able to sleep swinging for the fence all the time.

I bought options on the oil & gas EFT XOP.  I already set my profit point sell order. MY loss is capped, so I'm less worried about that side. I have until April 20 to hit my proft target.

I don't know how you can sleep given that predictions of the future become more unreliable the longer the time frame.  For example, we can predict the weather with near 100% accuracy 1 day in advance, and >60% accuracy 3-4 days in advance.  But if we try to predict the weather 10 years in advance, well, good luck.

Why do you think stocks are any different? 

Edited February 29, 2020 by Zhong Lu

[Zhong Lu + 845]

Here's another myth: position sizing.

It actually has no effect on performance, statistically.  Consider: if you flipped a coin to determine position sizing, your average returns over a period of time will be the same as if you chose the same position size for every trade.

The reason you limit your position sizing is to lower the variance.  But variance can cut both ways.