Oil up Market Up-Band Aid or Cure

[Zhong Lu + 845]

And just exited @ 6.6.  Could have done better and exited @ 7.  

Chances are it runs in AH. So will retake position.  But smaller.  

EDIT: Also, out of UGAZ except for small position.  

EDIT: Could have done better but today was very good. Double digits %.

EDIT: Alright, that's enough. Out.  

Edited March 3, 2020 by Zhong Lu

[Douglas Buckland + 6,308]

6 hours ago, Zhong Lu said:

And just exited @ 6.6.  Could have done better and exited @ 7.  

Chances are it runs in AH. So will retake position.  But smaller.  

EDIT: Also, out of UGAZ except for small position.  

EDIT: Could have done better but today was very good. Double digits %.

EDIT: Alright, that's enough. Out.  

Probably easier to knock off (rob) a couple of liquor stores a week. Much easier to understand the cash flow and risks.

Keep on truckin’ Zhong!😂

[Wombat + 1,028]

On 3/3/2020 at 2:56 PM, George8944 said:

Personally,  I hope the market continues dropping to bear territory.  We need a good house cleaning before I retire!   Purely selfish on my part.  Once we get back to a baseline, I can build a plan that may actually work.   With the FED blowing ever bigger bubbles it hard to plan long term.  

My guess is we will have a roller coaster to ride most of 2020.  Corola is just entering the US so there's still lots of anxiety (read: volatility) to weather.   If Corola dimishes as weather warms like the flu, we will have a reprieve until next Winter.  Maybe by then a vaccine will exist and this will be a memory.   I'll stop waxing on now.  I haven't a clue what lies ahead.  I'm in mostly cash and plan on playing the Options market and do some opportunitic buying of stocks I can hold for years and years.

Chevron plans on returning $80bn to shareholders over next 5 years.

[George8944 + 128]

10 hours ago, Wombat said:

Chevron plans on returning $80bn to shareholders over next 5 years

Both Chevron and Exxon have been borrowing money to do this.  As long as interest rates stay low or go negative ( good likelihood for either ) they can continue playing this game.  I'm not a big fan of buybacks.   It's a way to look like they've juiced up returns, when in fact many of company fundamentals are deteriorating.   They often have lower sales and/or lower margins and/or lower earning.   If you can't increase the numerator in the earnings per share equation,  you can always change the denominator.   Eventually this will catch up to them.  With all that said, Chevron is in better fiscal shape than ExxonMobile.

[Wombat + 1,028]

7 hours ago, George8944 said:

Both Chevron and Exxon have been borrowing money to do this.  As long as interest rates stay low or go negative ( good likelihood for either ) they can continue playing this game.  I'm not a big fan of buybacks.   It's a way to look like they've juiced up returns, when in fact many of company fundamentals are deteriorating.   They often have lower sales and/or lower margins and/or lower earning.   If you can't increase the numerator in the earnings per share equation,  you can always change the denominator.   Eventually this will catch up to them.  With all that said, Chevron is in better fiscal shape than ExxonMobile.

Chevron may be in better shape than Exxon, but important to understand the difference in their strategies and investment styles. Chevron spent $60bn on very large LNG plant here in Australia (Gorgon project). Now it reaping the rewards and can afford large dividends whilst throttling back on capex as they see little new demand for oil+gas. Exxon, on the other hand, is "going for growth". Having success after success in Guyana and got favourable terms on taxation. I would buy a bit of both to hedge my bets. However, I would wait a few weeks till overall share market falls into bear territory due to corona virus. Hope that is decent food for thought?

[George8944 + 128]

8 hours ago, Wombat said:

Having success after success in Guyana

I mostly agree with what you said.  I like Chevron over Exxon but neither rates my buy list for now.  The laws of economics still rule.  Debt needs to be paid back at some point.  Ships that keep taking on more water than they bail eventually sink.  Throttling back on capex is a big, huge, red flag for me.  Companies must invest to survive.   Throttling back on capex to make share holders happy is very short sighted on the part of the stock holders!

As for Exxon having success in Guyana.  I will agree when they convert those oil reserves to substantial cash on their bottom line.  Having huge reserves when oil consumption is dropping in price will not help them pay down debt.   As the expression goes, buy the steak and not the sizzle.  Guyana  in this market is currently more sizzle than steak.   Since I'm on a cliche tear in this post, I have one more.  Show me the money!

Here's an article that touches on the subject.   

https://www.washingtonpost.com/business/energy/exxon-mobil-and-chevron-help-fuel-investor-revolt/2020/01/31/1409fb30-445e-11ea-99c7-1dfd4241a2fe_story.html

[Wombat + 1,028]

6 hours ago, George8944 said:

I mostly agree with what you said.  I like Chevron over Exxon but neither rates my buy list for now.  The laws of economics still rule.  Debt needs to be paid back at some point.  Ships that keep taking on more water than they bail eventually sink.  Throttling back on capex is a big, huge, red flag for me.  Companies must invest to survive.   Throttling back on capex to make share holders happy is very short sighted on the part of the stock holders!

As for Exxon having success in Guyana.  I will agree when they convert those oil reserves to substantial cash on their bottom line.  Having huge reserves when oil consumption is dropping in price will not help them pay down debt.   As the expression goes, buy the steak and not the sizzle.  Guyana  in this market is currently more sizzle than steak.   Since I'm on a cliche tear in this post, I have one more.  Show me the money!

Here's an article that touches on the subject.   

https://www.washingtonpost.com/business/energy/exxon-mobil-and-chevron-help-fuel-investor-revolt/2020/01/31/1409fb30-445e-11ea-99c7-1dfd4241a2fe_story.html

OK, to quote Warren Buffett: "Be fearful while others are greedy, and be greedy when others are fearful" 

[Zhong Lu + 845]

On 3/3/2020 at 9:29 PM, Douglas Buckland said:

Probably easier to knock off (rob) a couple of liquor stores a week. Much easier to understand the cash flow and risks.

Keep on truckin’ Zhong!😂

I sold too early.  Penny stocks make me nervous.  Oh well.  Lesson learned.  Hold a little longer with half next time.  But previous experiences with penny stocks (not all pleasant) have encouraged me to sell ASAP.  

[Zhong Lu + 845]

1 hour ago, Wombat said:

OK, to quote Warren Buffett: "Be fearful while others are greedy, and be greedy when others are fearful" 

XOM eventually is fine.  But still too early.  Don't FOMO.  

EDIT: What I mean is if XOM breaks 50, it'll go straight down to 40.  Buy then.

If 50 doesn't break, you'll still have plenty of time to buy in the low 50's, so be patient.  There's not going to be a V-shaped rally in stocks or in oil.  Today's very bad no good price action confirms that.  

Edited March 6, 2020 by Zhong Lu

[Douglas Buckland + 6,308]

....and now you understand why I have managed accounts...😂