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So these oil stocks cant be dead forever right? Like USO and WTI.  

I have a little bit of USO I bought at the end of friday and see it's already in the red another 11% or so.  I was just gonna hang on to it, or is that just a dead stock I should dump?

Just wondering when some of you guys would expect oil to rebound

 
ghostguy123 said:
So these oil stocks cant be dead forever right? Like USO and WTI.  

I have a little bit of USO I bought at the end of friday and see it's already in the red another 11% or so.  I was just gonna hang on to it, or is that just a dead stock I should dump?

Just wondering when some of you guys would expect oil to rebound
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USO isn’t really a stock. its an oil futures play. WTI is America’s version of crude oil.

Commodities are different animals altogether. Much more driven by pure economics. Supply and demand. You have huge issues with both variables right now. There’s elasticity and things will snap back at some point. Who knows when, but there will be indicators along the way.

 
BassNBrew said:
I tagged along with you on the tankers and am plus +10%.  Thank you!  When are you looking to exit?
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I'm not in a huge rush. Just meant it's not a long-term play. Like the latest I'd want to be holding it is into Q2 earnings over the summer. But they report earnings starting in early May (EURN starts on May 7th) so hoping between now and then, that more headlines come up about no storage and they guide to how ridiculous Q2 could be. But I think DHT is at least worth $10 and could hit the low teens. 

https://twitter.com/the5hippingman/status/1251187888928284676

 
Almost funny how AMZN appears to have fallen in the contrarian bucket now. They are like ZM and TDOC. When the market goes up like Friday, it goes down. When futures are down, it’s up. Really odd if it stays like that now that it had that run up.

 
sporthenry said:
I'm not in a huge rush. Just meant it's not a long-term play. Like the latest I'd want to be holding it is into Q2 earnings over the summer. But they report earnings starting in early May (EURN starts on May 7th) so hoping between now and then, that more headlines come up about no storage and they guide to how ridiculous Q2 could be. But I think DHT is at least worth $10 and could hit the low teens. 

https://twitter.com/the5hippingman/status/1251187888928284676
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Any of those other look tasty to you?

 
stbugs said:
Almost funny how AMZN appears to have fallen in the contrarian bucket now. They are like ZM and TDOC. When the market goes up like Friday, it goes down. When futures are down, it’s up. Really odd if it stays like that now that it had that run up.
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Is it a safehaven? People move cash to it vs just staying in cash? I don't know, just could make sense 

 
JerseyToughGuys said:
USO isn’t really a stock. its an oil futures play. WTI is America’s version of crude oil.

Commodities are different animals altogether. Much more driven by pure economics. Supply and demand. You have huge issues with both variables right now. There’s elasticity and things will snap back at some point. Who knows when, but there will be indicators along the way.
Click to expand...
USO is a tough play. As someone pointed out, it's a contract futures play and it previously used to exclusively invest in near-term oil contracts which in a contango market, get smoked. They said they'd start investing in long-term contracts (ie July instead of June) due to this issue. But essentially they buy near-term oil contracts which trade above spot price and oil gradually moves down to spot price then they sell that option and go out and buy the next (higher trading) oil contract. It has a lot of technicals but it becomes sell low, buy high. USL at least invests across 12 months so that avoids some of these issues.

This all is complicated by the fact USO owns a massive size of the contracts. So there is some talk that they are responsible for this move in oil today due to USO buying more contracts since retail investors have bought USO. "Combine this with the fact that USO holds 20% of the June WTI contract positions and the sell-off could be intensified on May 5 when the roll begins."

 
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[icon] said:
Is it a safehaven? People move cash to it vs just staying in cash? I don't know, just could make sense 
Click to expand...
I think it is. They are in that bucket of “doing better” in this crisis. Doesn’t mean same growth numbers as normal or maybe it means better but I could see it being a stock people will invest in instead of cash now.

 
drunken slob said:
Not a virus impacted company, but Russia/Saudi Arabia impacted is, Halliburton (HAL). A very unpopular company, but, they're not going away. 

Going in on 4/20/20 for a number of shares solely to take future dividends from. Also hold a decent amount of Marathon Oil (MRO) below $4 per share.
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HAL getting crushed this AM so you are getting a good price.  That dividend is probably in danger though.

 
sporthenry said:
USO is a tough play. As someone pointed out, it's a contract futures play and it previously used to exclusively invest in near-term oil contracts which in a contango market, get smoked. They said they'd start investing in long-term contracts (ie July instead of June) due to this issue. But essentially they buy near-term oil contracts which trade above spot price and oil gradually moves down to spot price then they sell that option and go out and buy the next (higher trading) oil contract. It has a lot of technicals but it becomes sell low, buy high. USL at least invests across 12 months so that avoids some of these issues.

This all is complicated by the fact USO owns a massive size of the contracts. So there is some talk that they are responsible for this move in oil today due to USO buying more contracts since retail investors have bought USO. "Combine this with the fact that USO holds 20% of the June WTI contract positions and the sell-off could be intensified on May 5 when the roll begins."
Click to expand...
Just wanted to say that you're really one smart dude or at least present that way if you're not.  :D  Thanks for all the information and education you provide in this thread.

 
The Lost One said:
Dividend yield is 45.98%?
Click to expand...
Maybe not?

3/26/20 - MFA Financial Inc. shares more than doubled to $2.81 after the company said it is revoking its previously announced first-quarter dividends on each of its common stock and 7.50% Series B Cumulative Redeemable Preferred Stock to preserve liquidity until it can more accurately assess the impact current market conditions will have on its business.

The company's board of directors will continue to evaluate the payment of dividends as market conditions evolve.

 
BassNBrew said:
Just wanted to say that you're really one smart dude or at least present that way if you're not.  :D  Thanks for all the information and education you provide in this thread.
Click to expand...
Thanks for the kind words. I'm not sure it's intelligence so much as having wisdom from making similar mistakes but also having been exposed to a range of things. Like I went long VIX once and watched it just slowly bleed down. Had a lot of coworkers go long USO back in 2015/2016 and they got burned by it. That is when I found out about USL because I was worried about that roll stuff. I've just been fascinated by a lot of these things like the blow up in the VIX ETN, an ETF possibly driving the price of oil down 40% in a day. So that is usually when I learned about this stuff and realized you need to understand what exactly you're investing in. Nothing worse than seeing oil go up and your ETF go down. I mean I'm in a gold ETF and I'm just reading stuff now about how it could blow up if people start demanding physical settlement. Guess the moral of this story is commodity ETFs can be scary in extreme situations so know what you're holding and how they can react. 

I mean tankers is one of my more speculative plays. Fortunately, I have covered a bunch of sectors like midstream, media or casinos so at least know the high level stuff. Never really looked at tankers before so take your tail with a grain of salt. The numbers just looked stupid good and will be one sector that actually produces earnings. Now stocks are forward looking and as oil stays low, I imagine the value of tankers declines once they get through the storage phase. I don't have a great appreciation for that but that is why I'm hoping I don't have to wait for 2Q earnings because if oil stays below $30, I imagine people won't be paying tankers to move oil. 

ETA: I should thank everyone (well almost everyone here) because honestly it is a two way street. I can just give the insight of a bond guy here but we're all trying to figure it out. I love pinging ideas off everyone here as much as they do. Some people in here have kept me from doing stupid stuff and that is what I hope we can all avoid or at least if you're going to invest in AMC, know their bonds are trading at 30 cents on the dollar

 
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Slapdash said:
drunken slob said:
Not a virus impacted company, but Russia/Saudi Arabia impacted is, Halliburton (HAL). A very unpopular company, but, they're not going away. 

Going in on 4/20/20 for a number of shares solely to take future dividends from. Also hold a decent amount of Marathon Oil (MRO) below $4 per share.
Click to expand...
HAL getting crushed this AM so you are getting a good price.  That dividend is probably in danger though.
Click to expand...
Man, I almost followed this after the open.  Hope you got in this AM!

 
sporthenry said:
Thanks for the kind words. I'm not sure it's intelligence so much as having wisdom from making similar mistakes but also having been exposed to a range of things. Like I went long VIX once and watched it just slowly bleed down. Had a lot of coworkers go long USO back in 2015/2016 and they got burned by it. That is when I found out about USL because I was worried about that roll stuff. I've just been fascinated by a lot of these things like the blow up in the VIX ETN, an ETF possibly driving the price of oil down 40% in a day. So that is usually when I learned about this stuff and realized you need to understand what exactly you're investing in. Nothing worse than seeing oil go up and your ETF go down. I mean I'm in a gold ETF and I'm just reading stuff now about how it could blow up if people start demanding physical settlement. Guess the moral of this story is commodity ETFs can be scary in extreme situations so know what you're holding and how they can react. 

I mean tankers is one of my more speculative plays. Fortunately, I have covered a bunch of sectors like midstream, media or casinos so at least know the high level stuff. Never really looked at tankers before so take your tail with a grain of salt. The numbers just looked stupid good and will be one sector that actually produces earnings. Now stocks are forward looking and as oil stays low, I imagine the value of tankers declines once they get through the storage phase. I don't have a great appreciation for that but that is why I'm hoping I don't have to wait for 2Q earnings because if oil stays below $30, I imagine people won't be paying tankers to move oil. 
Click to expand...
Lot of companies shutting in wells meaning they will only produce a few days a month so as NOT to invalidate the lease.  Any over leveraged oil companies have a real chance of going bankrupt.   Whiting just filed a few weeks ago & they are one of the largest producers in the ND bakken play.

 
caustic said:
Was busy this morning and missed the $11.25 entry for IMAX.  :hot:  Already at $12.30 now. 

Going to make sure I don’t miss the $17 entry for EAT.
Click to expand...
Taking it on the chin a bit. Guess the CEO was on CNBC saying this "“The deeper you dig, the less confident you are,” says $IMAX CEO Richard Gelfond, who has 36 theaters currently open, all in the Asia-Pacific region. He predicts theaters in China will open in June, while in North America, things will come back to normal in mid-July/August."

So I'm digging in and fading that. 

Did hop on your WORK play though. Someone just bought 4000 $WORK 4/24 $30 calls for $1.10

 
Slapdash said:
Man, I almost followed this after the open.  Hope you got in this AM!
Click to expand...
Barely missed the bottom, got it at $7.65, watched it drop  :censored: , then watched it come up to the current price. I agree about the dividend. Hopefully when the world returns to a more normal state, the price climbs and I count on it for a solid long position. We'll see

 
ghostguy123 said:
At what point does oil shoot back up?  Someone mentioned "there will be indicators".

What might those be?
Click to expand...
I'm not smart enough on that to know.  I forget the exact number but I think LA's state budget assumes oil in like the $60s per barrel.  Of course all state budgets are trash right now so maybe it isn't that much worse.

 
Will just say the front month oil contract is being depressed because nobody wants to take settlement. The June contract is at $22 and August at $30. So still low but not the equivalent of buying lunch at McDonald's low. The reason for the $7 is because you'd need to take the oil from Cushing OK, transport it somewhere and store it for month(s). 

XOP is actually up 3% today. I have no idea where oil is going and most people don't. This is just a technical thing happening which is why I wanted to short USO. When you can get on the right side of these technical trades, you usually win. 

 
Slapdash said:
Anyone dip into REITs lately or do we think there is more pain coming there?

Oil is just crashing.
Click to expand...
I own properties and I want nothing to do with REITs right now.  I think there is much more pain coming in the rental markets.  I hope I'm wrong there and if I am I'll collect my rents. 

This is totally anecdotal but I know one REIT built some new condos in a college town that I invest in.  These aren't run of the mill condos, they bought property downtown to tear down structures, build high rise, high end condos.  My question is now that campuses are empty, where are they going to get tenants?  Even when school comes back, how many students have parents who lost jobs or lost their savings to survive and are just starting back to work?  My thought process is even when students come back, many won't be looking at the newest ones and paying for the granite finishes, tiled out showers, etc.  Everyone focuses on restaurants not paying rents, and rightly so.  But there are going to be residential rental issues as well as commercial coming down the pike.  This stuff is going to take awhile to work out IMO.

 
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Shula-holic said:
I own properties and I want nothing to do with REITs right now.  I think there is much more pain coming in the rental markets.  I hope I'm wrong there and if I am I'll collect my rents. 

This is totally anecdotal but I know one REIT built some new condos in a college town that I invest in.  These aren't run of the mill condos, they bought property downtown to tear down structures, build high rise, high end condos.  My question is now that campuses are empty, where are they going to get tenants?  Even when school comes back, how many students have parents who lost jobs or lost their savings to survive and are just starting back to work?  My thought process is even when students come back, many won't be looking at the newest ones and paying for the granite finishes, tiled out showers, etc.  Everyone focuses on restaurants not paying rents, and rightly so.  But there is going to be residential rental issues as well as commercial coming down the pike.  This stuff is going to take awhile to work out IMO.
Click to expand...
Getting financing for condos was already not great in a lot of markets,  they're probably going to get crushed on that investment.  Good point.

 
Shula-holic said:
I own properties and I want nothing to do with REITs right now.  I think there is much more pain coming in the rental markets.  I hope I'm wrong there and if I am I'll collect my rents. 

This is totally anecdotal but I know one REIT built some new condos in a college town that I invest in.  This isn't run of the mill condos, they bought property downtown to tear down structures, build high rise, high end condos.  My question is now that campuses are empty, where are they going to get tenants?  Even when school comes back, how many students have parents who lost jobs or lost their savings to survive and are just starting back to work?  My thought process is even when students come back, many won't be looking at the newest ones and paying for the granite finishes, tiled out showers, etc.  Everyone focuses on restaurants not paying rents, and rightly so.  But there is going to be residential rental issues as well as commercial coming down the pike.  This stuff is going to take awhile to work out IMO.
Click to expand...
I completely agree with you.  I don't want to agree with you because it means real pain is still to come, but I don't see any other conclusions to draw from this.  

 
Shula-holic said:
I own properties and I want nothing to do with REITs right now.  I think there is much more pain coming in the rental markets.  I hope I'm wrong there and if I am I'll collect my rents. 

This is totally anecdotal but I know one REIT built some new condos in a college town that I invest in.  These aren't run of the mill condos, they bought property downtown to tear down structures, build high rise, high end condos.  My question is now that campuses are empty, where are they going to get tenants?  Even when school comes back, how many students have parents who lost jobs or lost their savings to survive and are just starting back to work?  My thought process is even when students come back, many won't be looking at the newest ones and paying for the granite finishes, tiled out showers, etc.  Everyone focuses on restaurants not paying rents, and rightly so.  But there are going to be residential rental issues as well as commercial coming down the pike.  This stuff is going to take awhile to work out IMO.
Click to expand...
So true, I need to figure out my sons situation in Santa Barbara this summer, specifically his roommates and if they are still planning to move back.

 
stbugs said:
Almost funny how AMZN appears to have fallen in the contrarian bucket now. They are like ZM and TDOC. When the market goes up like Friday, it goes down. When futures are down, it’s up. Really odd if it stays like that now that it had that run up.
Click to expand...
its in the safe haven group, with Netflix, Roku, WMT, Costco and several others that marches to their own beat.

 
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