Vegas Free-for-All - Time to invest in oil?

jatki

Dec 6, 2014
6:50am

I'm with PJ on ETP, it's my biggest holding. I bought it last year mainly for the dividend which was 7+% at that time but then the share price kinda exploded, it shot up and now in the 60's. I think Kinder is a really solid play in the pipelines also, pays a decent 4.2% divvy. I was fortunate and had a decent chunk of KMI before they announced the consolidation when it shot up in the 90s, I took the money and ran keeping a small amount just because. Kinda wish I had kept all of it. If it dips significantly I might buy more.

I know I've gotten slaughtered on a couple oil producers I own BUT I'm trying to look at it in a good light, they're long term holdings, I have the dividends reinvested so I'm looking at picking up shares on the cheap, really cheapreally ,really cheap:<; Seriously, I am gonna buy some more, being patient.

Don

Dec 7, 2014
9:50am

Block User

Quote

Originally posted by: snidely333
Thanks, lots of great information here.

Allow poor old DonDiego to add a qualification.

DonDiego is not contemplating adding to his stock market investments; quite the contrary, he is waiting for an indication that the present over-valuation is about to reverse, . . . when he hopes to exit more quickly than other investors.
[With specific regard to the shale oil, aka "tight oil", DonDiego is concerned about the extraction-costs and the longevity of the wells.]

More generally the actions of central banks worldwide have led to current stock market conditions which DonDiego opines are overvalued, . . . largely due to the central bank induced - as opposed to market induced - depressed interest rates.
When interest rates begin to rise [or are permitted to rise], it seems to poor old DonDiego that lots of debtors may find themselves in difficulty, . . . and shortly thereafter the debt-holders may find themselves extremely disappointed, . . . and shortly thereafter, . . . well, DonDiego doesn't know exactly what might happen, but he does not wish to be the last guy holding the bag-of-stocks.
He expects currencies to fall, . . . with the US dollar holding up better than most but only for a while, . . . so his stock holdings currently represent real and necessary assets - like oil, agricultural products, etc.

It's tough enough investing with steady currency values. The dilemma is if currency values fall faster than ones asset's values rise one can still end up with the short end of the stick.

[n.b. DonDiego has successfully kept "partisan politics" out of this post; much of what he anticipates is the result of what he believes to be unfortunate Government policies, but he doesn't assign responsibility to any one party more than to any other.]

snidely333

Dec 7, 2014
1:05pm

Block User

Don Diego is bearish. That's ok. I think investors are more emotional than Don Diego gives them credit for. Currency, schmurency. I think oil will go back up some day. It's depressed now so it's a good time to buy.

Or not.

pjstroh

Dec 8, 2014
12:42am

Block User

Different opinions are what make a market.

I'm not too worried about a recession in the near future - certainly not like the scale we saw in 2008. We are currently in one of the longest bull markets in history (perhaps longest?) but earnings multiples for the S&P are not at historically high levels....the economy is still adding jobs ...and manufacturing has not built up large, unsold inventories (which is the biggest red flag I look for). Balance sheets for corporations have more cash on hand than any time in history . Commodities are the only thing that seem to be overproduced at the moment - and that is largely a tailwind for both consumers and business alike.

And if tax reform gets passed....and if the government ever decides to rebuild AMerica's infrastructure instead of the MIddle East's...then holy cow! It'll be another huge leg up, in my unprofessional opinion..