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http://m.investing.com/news/economic-indicators/u.s.-api-weekly-crude-stock-11.400m-vs.-3.500m-forecast-381818

I just don't want to be long oil yet. I feel like builds will be a recurring theme for the near future

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Seeing these oil stocks being "on sale" practically everywhere I look scares me. I mean, it sort of seems obvious that there will be a rebound and possibly a large one. But if they are on sale why do they keep dropping? I'm pretty new to all of this stuff so maybe what I'm saying is stupid. Feel free to tell me so.

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$2.40 per share. So if you buy 100 shares of stock today at a price of $29.62 (last tick) you get $240 a year in dividends. Your investment is $2,962

It's a hefty dividend. Take a look at COP it is paying $2.96 now yielding 8.47%

Those are two of the 5 or 6 biggest integrated oil producers in the world. You think we are nearing a bottom yet? If so buy buy buy for the long term. Even if they cut the dividend 50% your still getting north of 4%

What are the banks paying you? And do you think oil will stay at these levels forever? A great once in a decade buying opportunity for big, well managed, cash rich companies in the oil industry.

CVX

XOM

COP

BP

SLB

TOT

RDS'A

All these companies are on serious sale now. Huge long term chance to get into the oil sector, or average down your existing holdings. If you don't need the money for at least 5 years.....buy.

Why do I feel like I've heard this before (at much higher prices).....
Certainly did. I did nibble when oil fell below 50. But again my overall weighting has never exceeded 15% for my most aggressive equity sleeve models.

The lousy thing about this oil downturn is it has hit many other oil "related" sectors. Industrials, materials, transports. It's a bad market right now and has been since May 2015.

Careful selection is key. Buying high quality, cash rich companies is the way to go. It is a value stock pickers market.

When oil went below 30 I nibbled some more. But I am nibbling on the big guys and only one MLP (BPL). Some other stocks for the long term investor that have been hammered in other sectors:

CAT

CMI

EMR

ETN

NSC

UNP

CSX

DOW

Pure destruction in most of those names. And then you have Walmart. A stalwart that lost 30 plus percent last year. If you believe they can perform a turnaround this is a great entry point into a powerhouse low income retailer. Thing is everyone I know goes there. Parking lot is always full. A good defensive position in ones portfolio.

BioPharma too. So many names got hammered last year. GILD just pops off my screen as a superb value at these levels. I am overweighting that name.

So there is value. But you need a strong stomach and patience. But the dividends are there and when the cycle turns you will be rewarded. Buy when no one wants them. That is value investing.

I don't mean to take a shot at you, just pointing out that many people have been saying "this is a once in a whatever opportunity" for a long time now and they've gotten crushed. I'm pretty sure you said you went in heavy over a year ago, and some of those stocks are now down over 50% (a couple over 80%).

I understand the long term value aspect, but there's a big difference between things "being on sale" and being a great buy. I agree there's upside, but there's still plenty of risk to go along with it IMO.

Heavy? No. But I did go in and do some buying.....some of those names I am down an avereage of 23%

Not concerned.

Well, you said you went in hard, and your next post quoted someone who said they might pour everything they have into oil long term by saying you did it today, but if you say you didn't, that's fine- I'm not looking to get into a whole thing. The point is, many people have been saying these stocks are a screaming buy for a long time now, and they're way in the hole.

I have never advocated dumping everything into oil or any one sector.

Ever

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Seeing these oil stocks being "on sale" practically everywhere I look scares me. I mean, it sort of seems obvious that there will be a rebound and possibly a large one. But if they are on sale why do they keep dropping? I'm pretty new to all of this stuff so maybe what I'm saying is stupid. Feel free to tell me so.

(blews out)

Because their current sale price is predicated on oil rebounding in timeframe X. What if oil takes longer to rebound? Mostly, you're gambling on that. But that lingering question creates lots of variability.

One of the reasons they're attractive at sale prices is because of the dividend %s you can potentially lock in buying them right now. The longer oil prices remain depressed, however, the bigger the cash flow concerns become for these companies. Companies that are not bringing in adequate amounts of cash while paying high dividends will likely, sooner or later, look to ease their cash flow issues by cutting their dividends. At the point that occurs, you're likely to see an almost immediate drop in the stock's price. Meaning you not only lost the return you thought you were getting when you bought in, but you also now own something worth less than when you purchased it. In some instances, it could actually trigger immediate institutional selling, which can make the stock's decline steep.

Add to that the fact that many of these companies are also carrying substantial debt, and you now have additional risks to price in. And again, the longer oil prices remain depressed, the greater the risk of default or cutting dividends further to pay obligations.

Further, you have some short-sighted behaviors already taking place within some of these companies, where assets that would have been productive/valuable long-term are being sold to offset short-term cash requirements. The longer oil remains depressed, the more of this you'll see. Are any of these actions impactful to the long-term value/viability of the company? :shrug:

I believe Todem is saying he's comfortable that the companies he has listed have minimal real risk of default with a rebound in oil prices in any reasonable timeframe, and that the possibility of long-term appreciation outweighs the short-term pain regardless of dividends. And if the dividends stay at current levels, then it's just going to add to the win. While people like siff would tell you it's OK to miss COP at an 8.5% dividend to wait for signs that a recovery has begun and maybe get them at 6% dividend, which is still really good AND gives you enough upside to be worthwhile.

What'd I miss?

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Seeing these oil stocks being "on sale" practically everywhere I look scares me. I mean, it sort of seems obvious that there will be a rebound and possibly a large one. But if they are on sale why do they keep dropping? I'm pretty new to all of this stuff so maybe what I'm saying is stupid. Feel free to tell me so.

(blews out)

Because their current sale price is predicated on oil rebounding in timeframe X. What if oil takes longer to rebound? Mostly, you're gambling on that. But that lingering question creates lots of variability.

One of the reasons they're attractive at sale prices is because of the dividend %s you can potentially lock in buying them right now. The longer oil prices remain depressed, however, the bigger the cash flow concerns become for these companies. Companies that are not bringing in adequate amounts of cash while paying high dividends will likely, sooner or later, look to ease their cash flow issues by cutting their dividends. At the point that occurs, you're likely to see an almost immediate drop in the stock's price. Meaning you not only lost the return you thought you were getting when you bought in, but you also now own something worth less than when you purchased it. In some instances, it could actually trigger immediate institutional selling, which can make the stock's decline steep.

Add to that the fact that many of these companies are also carrying substantial debt, and you now have additional risks to price in. And again, the longer oil prices remain depressed, the greater the risk of default or cutting dividends further to pay obligations.

Further, you have some short-sighted behaviors already taking place within some of these companies, where assets that would have been productive/valuable long-term are being sold to offset short-term cash requirements. The longer oil remains depressed, the more of this you'll see. Are any of these actions impactful to the long-term value/viability of the company? :shrug:

I believe Todem is saying he's comfortable that the companies he has listed have minimal real risk of default with a rebound in oil prices in any reasonable timeframe, and that the possibility of long-term appreciation outweighs the short-term pain regardless of dividends. And if the dividends stay at current levels, then it's just going to add to the win. While people like siff would tell you it's OK to miss COP at an 8.5% dividend to wait for signs that a recovery has begun and maybe get them at 6% dividend, which is still really good AND gives you enough upside to be worthwhile.

What'd I miss?

I am now 100% positive that I have no idea what I'm doing. Excellent post.

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$2.40 per share. So if you buy 100 shares of stock today at a price of $29.62 (last tick) you get $240 a year in dividends. Your investment is $2,962

It's a hefty dividend. Take a look at COP it is paying $2.96 now yielding 8.47%

Those are two of the 5 or 6 biggest integrated oil producers in the world. You think we are nearing a bottom yet? If so buy buy buy for the long term. Even if they cut the dividend 50% your still getting north of 4%

What are the banks paying you? And do you think oil will stay at these levels forever? A great once in a decade buying opportunity for big, well managed, cash rich companies in the oil industry.

CVX

XOM

COP

BP

SLB

TOT

RDS'A

All these companies are on serious sale now. Huge long term chance to get into the oil sector, or average down your existing holdings. If you don't need the money for at least 5 years.....buy.

Why do I feel like I've heard this before (at much higher prices).....
Certainly did. I did nibble when oil fell below 50. But again my overall weighting has never exceeded 15% for my most aggressive equity sleeve models.

The lousy thing about this oil downturn is it has hit many other oil "related" sectors. Industrials, materials, transports. It's a bad market right now and has been since May 2015.

Careful selection is key. Buying high quality, cash rich companies is the way to go. It is a value stock pickers market.

When oil went below 30 I nibbled some more. But I am nibbling on the big guys and only one MLP (BPL). Some other stocks for the long term investor that have been hammered in other sectors:

CAT

CMI

EMR

ETN

NSC

UNP

CSX

DOW

Pure destruction in most of those names. And then you have Walmart. A stalwart that lost 30 plus percent last year. If you believe they can perform a turnaround this is a great entry point into a powerhouse low income retailer. Thing is everyone I know goes there. Parking lot is always full. A good defensive position in ones portfolio.

BioPharma too. So many names got hammered last year. GILD just pops off my screen as a superb value at these levels. I am overweighting that name.

So there is value. But you need a strong stomach and patience. But the dividends are there and when the cycle turns you will be rewarded. Buy when no one wants them. That is value investing.

I don't mean to take a shot at you, just pointing out that many people have been saying "this is a once in a whatever opportunity" for a long time now and they've gotten crushed. I'm pretty sure you said you went in heavy over a year ago, and some of those stocks are now down over 50% (a couple over 80%).

I understand the long term value aspect, but there's a big difference between things "being on sale" and being a great buy. I agree there's upside, but there's still plenty of risk to go along with it IMO.

Heavy? No. But I did go in and do some buying.....some of those names I am down an avereage of 23%

Not concerned.

Well, you said you went in hard, and your next post quoted someone who said they might pour everything they have into oil long term by saying you did it today, but if you say you didn't, that's fine- I'm not looking to get into a whole thing. The point is, many people have been saying these stocks are a screaming buy for a long time now, and they're way in the hole.
I have never advocated dumping everything into oil or any one sector.

Ever

Just saying what you wrote. Again, it doesn't really matter because it's not the point- the point is that many people have been saying the same "this is a once in whatever buying opportunity" for a long time now, and clearly it wasn't. It doesn't mean it won't be this time, but I just feel like you're underestimating the chance that it isn't. No worries.

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I told my dad to buy 1000 shares of AAPL if it plunged under $90 tomorrow morn

*I'll #### a brick if he buys 1000 shares tomorrow morning.

Is this likely?
Did you see the part where he said he'd "#### a brick" if it did happen?

I obviously missed that, carry on.

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I have a bad feeling Apple is what blackberry was when it was over $200 a share. Now it sits at $7. Apple is a hardware company. As soon as the iPhone gets old, this company will be in free fall unless they are able to supplement that income in another fashion. It's a big challenge for hardware companies in general. It has to put its cash to work.

Also, what happened to GPRO? Seems cheap at $10 a share with $1.5 B market cap

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Isn't gopro just a hardware company?

Haha, yes it is. And I have always hated this stock. But it's a house hold name worth 0.0027 of what Apple is. And it doesn't have much competition. Just a thought.

FWIW, I saw a Bloomberg TV report a week or so back where they said that knockoff competition was very strong. They gave an example of one retailer who said that GoPro was the biggest seller by far of any other brand...but that the aggregate of the other brands was greater than sales of GoPros by themselves.

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Isn't gopro just a hardware company?

Haha, yes it is. And I have always hated this stock. But it's a house hold name worth 0.0027 of what Apple is. And it doesn't have much competition. Just a thought.

FWIW, I saw a Bloomberg TV report a week or so back where they said that knockoff competition was very strong. They gave an example of one retailer who said that GoPro was the biggest seller by far of any other brand...but that the aggregate of the other brands was greater than sales of GoPros by themselves.

Thanks for the response. I know there is competition overseas, but GPRO seems like a name brand that people will pay more for. I'm not endorsing the company by any means, more so just wondering what the hell happened to it. A $1.5B valuation seems cheap like a FB/MSFT/AAPL could pay 2 or 3 times its market cap and not blink an eye. Not that I would buy a stock to get bought out but curious why a big company wouldn't just swoop in and pick them up.

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Isn't gopro just a hardware company?

Haha, yes it is. And I have always hated this stock. But it's a house hold name worth 0.0027 of what Apple is. And it doesn't have much competition. Just a thought.

FWIW, I saw a Bloomberg TV report a week or so back where they said that knockoff competition was very strong. They gave an example of one retailer who said that GoPro was the biggest seller by far of any other brand...but that the aggregate of the other brands was greater than sales of GoPros by themselves.

Thanks for the response. I know there is competition overseas, but GPRO seems like a name brand that people will pay more for. I'm not endorsing the company by any means, more so just wondering what the hell happened to it. A $1.5B valuation seems cheap like a FB/MSFT/AAPL could pay 2 or 3 times its market cap and not blink an eye. Not that I would buy a stock to get bought out but curious why a big company wouldn't just swoop in and pick them up.

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To be clear, the old man has plenty of dry powder. But 1000 shares would make AAPL his second-largest position, and I don't think he likes it that much. A hundred shares is more likely. He's also 79, and whatever cash position helps him to sleep at night is fine with me.

My retention bonus from last year is on its way to my brokerage account. I don't think the pain is over, but I think there might be some compelling values in the spring.

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I have a bad feeling Apple is what blackberry was when it was over $200 a share. Now it sits at $7. Apple is a hardware company. As soon as the iPhone gets old, this company will be in free fall unless they are able to supplement that income in another fashion. It's a big challenge for hardware companies in general. It has to put its cash to work.

Also, what happened to GPRO? Seems cheap at $10 a share with $1.5 B market cap

Apple going from a $200 to $7 type fall? Their P/E ratio is right around 10 isn't it? Doesn't seem too unreasonable.

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I have a bad feeling Apple is what blackberry was when it was over $200 a share. Now it sits at $7. Apple is a hardware company. As soon as the iPhone gets old, this company will be in free fall unless they are able to supplement that income in another fashion. It's a big challenge for hardware companies in general. It has to put its cash to work.

-

Also, what happened to GPRO? Seems cheap at $10 a share with $1.5 B market cap

Go Pro = Crocs. Bleh - the run is over. I expect cheap competition to chew GPRO up in the next couple years.

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I have a bad feeling Apple is what blackberry was when it was over $200 a share. Now it sits at $7. Apple is a hardware company. As soon as the iPhone gets old, this company will be in free fall unless they are able to supplement that income in another fashion. It's a big challenge for hardware companies in general. It has to put its cash to work.

Also, what happened to GPRO? Seems cheap at $10 a share with $1.5 B market cap

Apple going from a $200 to $7 type fall? Their P/E ratio is right around 10 isn't it? Doesn't seem too unreasonable.
I don't think it could fall like that but I definitely think its possible it could get to the $60s. That would give it a market cap of about $350 B and much lower than its high in the mid $130s. It has way too much cash to get much lower than that anytime soon. But if more of their cash gets taxed and two or three years down the road Google comes up with something revolutionary who know? Im expecting Apple to stay in the $90 short time FWIW. Also, I'm the opposite of an expert Edited by dschuler
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I actually looked up my avg cost on various oil, industrial and oil related positions I bought aggressively (defined no more than a 15% weighting in the sector in my overall portfolio) in August of 2015. This is my personal portfolio (not all of my positions are listed just the oil, chemical, industrial, transports etc) and these are the average cost basis. All bought equally weighted.

ASH - 99.95 (-5%)

BA - 127 (-9%)

BPL - 62.23 (-13%)

BP - 31.10 (-2%)

CAT - 81.05 (-28%)

BHP - 40.21 (-47%)

CMI - 124 (-31%)

COP - 42.69 (-18%)

CSX - 25.61 (-12.5%)

CVX - 87.12 (-3.95%)

DOW - 39.68 (+6.3%)

EMR - 52.40 (-18%)

ETN - 49.75 (-2.15%)

GE - 25.12 (+12%)

HP - 50.91 (-9%)

HRS - 79.19 (+6.6%)

LMT - 187.80 (+12%)

NSC - 81.05 (-13.5%)

TOT - 49.04 (-11.6%)

XOM - 69.65 (+9%)

Current yield = 4.50%

This batch of stocks down since August 2015 (8.89%)

Edited by Todem
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Is TWTR ever going to get off the ground? I've been looking at making an entry, hoping it's just a broken IPO but I haven't talked myself into it. Recent exec changes noted and all that.

It's a niche market but I like the long term potential. At these levels if you believe in the platform then you go long. But all the management in's and out's are concerning. I think Twitter just needs to figure out how to monetize the user base much like Facebook did. Facebook is a giant though. So I would not expect Facebook growth. But there is revenue growth potential on Twitter. The stock has taken quite the beating.

Edited by Todem
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I actually looked up my avg cost on various oil, industrial and oil related positions I bought aggressively (defined no more than a 15% weighting in the sector in my overall portfolio) in August of 2015. This is my personal portfolio (not all of my positions are listed just the oil, chemical, industrial, transports etc) and these are the average cost basis. All bought equally weighted.

ASH - 99.95 (-5%)

BA - 127 (-9%)

BPL - 62.23 (-13%)

BP - 31.10 (-2%)

CAT - 81.05 (-28%)

BHP - 40.21 (-47%)

CMI - 124 (-31%)

COP - 42.69 (-18%)

CSX - 25.61 (-12.5%)

CVX - 87.12 (-3.95%)

DOW - 39.68 (+6.3%)

EMR - 52.40 (-18%)

ETN - 49.75 (-2.15%)

GE - 25.12 (+12%)

HP - 50.91 (-9%)

HRS - 79.19 (+6.6%)

LMT - 187.80 (+12%)

NSC - 81.05 (-13.5%)

TOT - 49.04 (-11.6%)

XOM - 69.65 (+9%)

Current yield = 4.50%

This batch of stocks down since August 2015 (8.89%)

Ugh. Here are the posts I'm talking about:

Went in hard this morning on:

COP

BP

CVX

HP

TOT

RDS'A

BHP

CAT

GE

FCX

OXY

SU

DVN

WPZ

HAL

LINE

ACMP

PBT

This is a once in 5 year buying opportunity for oil and oil related stocks/miners/industrial's

15 year low on price to book on COP/CVX/BP....it's insane.

2 years from now 30 plus percent gains plus your dividend yield of close to 5-6% while you wait.

Been watching UCO this month, right now it looks like it is retesting it's bottom from earlier this month, if it does bounce here, I feel like there is strong upside here.

I think under $50 and I'm just pouring everything I have into oil for long term. Even if it keeps going down, eventually it has to rebound, no? I mean we need oil, this isn't like saying XYZ companies stock has fallen, it will rise, this is ####### oil, we need this stuff.

Did it today. I don't care if it goes down another 10% from here....I never time bottoms. But this feels like a bottom to me in all the years I have been doing this. This is a sector that is on a fire sale.

Get in and hold for the long haul. Lot's of money to be made.

A few of the names that were on that list but not on this one include LINE, which is down ~90%, FCX, which is down ~80%, PBT, which is down ~50%, and several others that are way down since then. Maybe you didn't actually buy them, maybe you sold them- whatever, it doesn't matter.

AGAIN, the point is that many people have been saying that these things are a great buy for a long time, but instead they continued to get destroyed. That doesn't mean this isn't the bottom or close to it, but I think it's important to keep things in perspective- things can always get cheaper, sometimes significantly so.

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I actually looked up my avg cost on various oil, industrial and oil related positions I bought aggressively (defined no more than a 15% weighting in the sector in my overall portfolio) in August of 2015. This is my personal portfolio (not all of my positions are listed just the oil, chemical, industrial, transports etc) and these are the average cost basis. All bought equally weighted.

ASH - 99.95 (-5%)

BA - 127 (-9%)

BPL - 62.23 (-13%)

BP - 31.10 (-2%)

CAT - 81.05 (-28%)

BHP - 40.21 (-47%)

CMI - 124 (-31%)

COP - 42.69 (-18%)

CSX - 25.61 (-12.5%)

CVX - 87.12 (-3.95%)

DOW - 39.68 (+6.3%)

EMR - 52.40 (-18%)

ETN - 49.75 (-2.15%)

GE - 25.12 (+12%)

HP - 50.91 (-9%)

HRS - 79.19 (+6.6%)

LMT - 187.80 (+12%)

NSC - 81.05 (-13.5%)

TOT - 49.04 (-11.6%)

XOM - 69.65 (+9%)

Current yield = 4.50%

This batch of stocks down since August 2015 (8.89%)

Ugh. Here are the posts I'm talking about:

Went in hard this morning on:

COP

BP

CVX

HP

TOT

RDS'A

BHP

CAT

GE

FCX

OXY

SU

DVN

WPZ

HAL

LINE

ACMP

PBT

This is a once in 5 year buying opportunity for oil and oil related stocks/miners/industrial's

15 year low on price to book on COP/CVX/BP....it's insane.

2 years from now 30 plus percent gains plus your dividend yield of close to 5-6% while you wait.

Been watching UCO this month, right now it looks like it is retesting it's bottom from earlier this month, if it does bounce here, I feel like there is strong upside here.

I think under $50 and I'm just pouring everything I have into oil for long term. Even if it keeps going down, eventually it has to rebound, no? I mean we need oil, this isn't like saying XYZ companies stock has fallen, it will rise, this is ####### oil, we need this stuff.

Did it today. I don't care if it goes down another 10% from here....I never time bottoms. But this feels like a bottom to me in all the years I have been doing this. This is a sector that is on a fire sale.

Get in and hold for the long haul. Lot's of money to be made.

A few of the names that were on that list but not on this one include LINE, which is down ~90%, FCX, which is down ~80%, PBT, which is down ~50%, and several others that are way down since then. Maybe you didn't actually buy them, maybe you sold them- whatever, it doesn't matter.

AGAIN, the point is that many people have been saying that these things are a great buy for a long time, but instead they continued to get destroyed. That doesn't mean this isn't the bottom or close to it, but I think it's important to keep things in perspective- things can always get cheaper, sometimes significantly so.

Oh yeah.....LINE, FCX, HAL, RDS'A a bunch were stopped out once they hit 20% down. I remember that. I took a decent hit. Then went in again in August of 2015 on the names I mentioned. I still have OXY, just never averaged down on it. The rest were stopped out. We had a nice rebound to $60 oil after that...then the summer it tanked hard and this year so far...brutal.

Anyway I agree with you.....we can always be way too early. And I never thought Oil was heading sub 30 a barrel. Big miss on that.

However I still maintain it will pay off long term. Just a lot of pain and suffering getting there.

Edited by Todem
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So...what are the downside risks of oil right now?

Let's look at two different scenarios.

1. Assume oil prices stay in a 25-35 dollar range for the next 10 years.

2. Oil plummets to $10 a barrel?

What do you guys see as being the drawbacks of going all in on oil with a buy and hold mentality? Do some of you guys think oil is going to go away and be replaced by other forms of energy? I get the supply overhang fears...but aren't they being overblown at this point?

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So...what are the downside risks of oil right now?

Let's look at two different scenarios.

1. Assume oil prices stay in a 25-35 dollar range for the next 10 years.

2. Oil plummets to $10 a barrel?

What do you guys see as being the drawbacks of going all in on oil with a buy and hold mentality? Do some of you guys think oil is going to go away and be replaced by other forms of energy? I get the supply overhang fears...but aren't they being overblown at this point?

I would be utterly in shock if oil stayed in the 25-35 dollar range for a decade. Inflation and demand will continue to rise. If not we are going to have a major economic collapse.

I just don't see it that way. I am bullish....a bear will tell you yeah this is what is coming down the pike and sell everything and go into gold and treasuries.

If you believe that things work in cycles (which has been pretty much backed up over the last 100 years with factual data) then we are in a severe bear market cycle for oil, industrial and commodity stocks. A bottom is being formed right here IMO. I thought Oil was near it in the high 40's. I and almost everyone were wrong.

The downside is $20 oil in the short term. And like you said an extended period of cheap oil. Hence why I would not put all my eggs into one sector. I think the big names present a very attractive long term value.

If (and that is anyone's guess of when this will happen) OPEC at the end of this year announces a production cut you will see a massive short cover and oil can leap into the mid 40's quickly. This is a giant game of chicken between us and the OPEC nations. They are holding strong and creating immense pressure by not cutting production. It is driving a lot of small players in North America into bankruptcy. There is a ton of debt pressure and consolidation will be taking place this year. It's all by design. They also want to hurt Russia, Iran, South America etc. It's working.

Global demand will still grow 2.2-2.5% a year for oil. If you believe in the global village expansion (emerging markets, 3 new US type economies being created every 10 years in emerging markets) then oil, industrial and materials and transports will recover and rise again. I am a buyer into the global village....if you don't believe in it?

Put your money under your mattress and stay out of stocks.

I don't suggest you put all you money in the names I mentioned and am in personally. That is merely 15% of my entire portfolio. You can get rich being concentrated but you won't stay rich being concentrated.

It is a big gamble.

Be smart and balanced and have a good stable portfolio yield.

My overall portfolio (70/30 stocks to bonds) is down just shy of 6% and oil, industrial and transports is what is dragging me down....since May of 2015.

Edited by Todem
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Oh yeah.....LINE, FCX, HAL, RDS'A a bunch were stopped out once they hit 20% down. I remember that. I took a decent hit. Then went in again in August of 2015 on the names I mentioned. I still have OXY, just never averaged down on it. The rest were stopped out. We had a nice rebound to $60 oil after that...then the summer it tanked hard and this year so far...brutal.

Anyway I agree with you.....we can always be way too early. And I never thought Oil was heading sub 30 a barrel. Big miss on that.

However I still maintain it will pay off long term. Just a lot of pain and suffering getting there.

Yeah, that's all I'm saying. I don't think anyone was predicting sub $30 oil back then, it seemed crazy at the time. That's kind of the point though- I agree that the r/r is attractive here, but I'm always wary of the "great buying opportunity" type calls. There is still plenty of risk if oil doesn't rebound fairly soon.

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So...what are the downside risks of oil right now?

Let's look at two different scenarios.

1. Assume oil prices stay in a 25-35 dollar range for the next 10 years.

2. Oil plummets to $10 a barrel?

What do you guys see as being the drawbacks of going all in on oil with a buy and hold mentality? Do some of you guys think oil is going to go away and be replaced by other forms of energy? I get the supply overhang fears...but aren't they being overblown at this point?

Are you talking about oil the commodity or stocks of oil companies? Assuming it's stocks, Bob Sacamano covered a lot of the concerns a few posts back.

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I'm no expert, but my understanding is that oil(commodity) can't go below teens, barring a catastrophic unforeseen global event.

Factors include inflation(when compared to the 2 dollar bottom several decades ago) and the intrinsic value of a barrel of oil that will eventually be consumed.

Edited by TripItUp
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There are tons of reasons oil can stay low for longer and break Todem.

Fracking can stop and start production on a dime. There doesn't seem to be any worry of supply not meeting demand.

Fusion and alternative technology is advancing. Hydrogen, fuel cell, nuclear, solar, wind etc.

Global environment concerns. Look at some coal charts, coal divesting, etc. The oil industry might be the next target of big government.

Oil reliant countries are generally unstable and don't work well together. What country cuts first?

Self driving cars, different modes of transportation, etc will use less non-renewables

China is slowing, Europe in recession. US projects slow growth into 2035.

I'm not predicting the end of oil, but:

Energy demand is growing slowly and looks to continue slowing.

Energy supply is growing due to: 1. inability of companies/countries to curb production as they hope to service their debts. 2. efficiency of use and alternatives

Edited by heropretend
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So...what are the downside risks of oil right now?

Let's look at two different scenarios.

1. Assume oil prices stay in a 25-35 dollar range for the next 10 years.

2. Oil plummets to $10 a barrel?

What do you guys see as being the drawbacks of going all in on oil with a buy and hold mentality? Do some of you guys think oil is going to go away and be replaced by other forms of energy? I get the supply overhang fears...but aren't they being overblown at this point?

Are you talking about oil the commodity or stocks of oil companies? Assuming it's stocks, Bob Sacamano covered a lot of the concerns a few posts back.

Buy and hold on the stocks.

Oil on the commodity market is what...$10 a tick and $1,000 per contract profit or loss whenever it move a buck? Insane amounts of leverage but I do like the pure play of it.

I read Bob's post...but in general I am thinking that much of the risk probability of dividend cuts are being priced in. BP may cut a dividend...but I don't think the stock gets hammered over it. Do we really think big oil stocks are going to collapse and go to zero?

I guess theoretically anything is possible...but I don't think that is likely at all.

We all agree that oil is going through a massive bear market. So my crux of my pondering remains...if you can buy and hold the market as a whole but it hasn't gone through a bear market and is thus at risk for one...why not transfer your holdings into oil and make that a pure buy and hold play?

You can diversify your holdings within oil to alleviate some risk of say an Enron type deal if that is what you are concerned about.

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There are tons of reasons oil can stay low for longer and break Todem.

Fracking can stop and start production on a dime. There doesn't seem to be any worry of supply not meeting demand.

Fusion and alternative technology is advancing. Hydrogen, fuel cell, nuclear, solar, wind etc.

Global environment concerns. Look at some coal charts, coal divesting, etc. The oil industry might be the next target of big government.

Oil reliant countries are generally unstable and don't work well together. What country cuts first?

Self driving cars, different modes of transportation, etc will use less non-renewables

China is slowing, Europe in recession. US projects slow growth into 2035.

I'm not predicting the end of oil, but:

Energy demand is growing slowly and looks to continue slowing.

Energy supply is growing due to: 1. inability of companies/countries to curb production as they hope to service their debts. 2. efficiency of use and alternatives

I don't disagree oil can't stay lower for longer....I just don't think it stays at it's current level for an extended period of time. I am thinking within the next 18-24 months we will see oil again in the mid to high 60's.

Not the low 30's.

I am also not saying 80-100 oil anytime in the near future and maybe not for a long time.

I attended the Exxon Energy Outlook to 2035 conference last year at FIU (I attend it every year). Demand will continue to grow year over year over year. We have enough oil to last (with all the latest fracking, deep sea drilling etc) through our's and probably our kids lifetime.

It's not going away. And I can't sit here and predict government witch hunts and environmentalists winning over the house and senate and defeating big oil.

But oil IMO will go higher again and it is not going to happen overnight. It will be a 4-6 quarter event. But I feel strongly it will go back up.

Edited by Todem
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Anyone follow citron research? Left has been on fire for as long as I've been paying attention. One call that hasn't panned out (yet) is Wayfair. They wrote an exhaustive article about it here:

http://www.citronresearch.com/wp-content/uploads/2015/08/wayfair-pre-final-d.pdf

It is extremely volatile (and puts are pricey) making it pretty tough to make an entry. Can anyone offer any advice on from a technical standpoint?

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There are tons of reasons oil can stay low for longer and break Todem.

Fracking can stop and start production on a dime. There doesn't seem to be any worry of supply not meeting demand.

Fusion and alternative technology is advancing. Hydrogen, fuel cell, nuclear, solar, wind etc.

Global environment concerns. Look at some coal charts, coal divesting, etc. The oil industry might be the next target of big government.

Oil reliant countries are generally unstable and don't work well together. What country cuts first?

Self driving cars, different modes of transportation, etc will use less non-renewables

China is slowing, Europe in recession. US projects slow growth into 2035.

I'm not predicting the end of oil, but:

Energy demand is growing slowly and looks to continue slowing.

Energy supply is growing due to: 1. inability of companies/countries to curb production as they hope to service their debts. 2. efficiency of use and alternatives

The government has had a target on Cigarette companies for decades. It's hard to find a better stock over the last 40 years than Phillip Morris. They will just pass the buck on to the consumer.

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Anyone follow citron research? Left has been on fire for as long as I've been paying attention. One call that hasn't panned out (yet) is Wayfair. They wrote an exhaustive article about it here:

http://www.citronresearch.com/wp-content/uploads/2015/08/wayfair-pre-final-d.pdf

It is extremely volatile (and puts are pricey) making it pretty tough to make an entry. Can anyone offer any advice on from a technical standpoint?

"buy": http://www.barchart.com/opinions/stocks/W

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I still have over 500 shares of FCX I got at $10.08

I'm fine with holding it for a while, but should I shave some off with this week's pop? todem?

I did a lot of shopping this week:

50 Shares of AAPL (I'm happy with the number I got most of these at.) <$96 - we can speculate all day about their future issues with technology development, but it's as safe a bet as it comes these days to have a stake in IMO.

200 of Citigroup © @ 40.97 - this was just to get some diversification of my long term stuff, as I had no banking stocks. I liked C the best after the research I did over the past month or so

140 CAT @ 58.14 - again just to spread some of the portfolio because I knew I'd be buying a lot of oil this week (I'm with todem on his thoughts there)

The rest is FCX...

and...

SLB (110), XOM (220), UCO (350), KMI (600)

So, yeah....

Go oil.

Can anyone reach out to me with the layman explanation on a margin account and more specifically, the drawbacks of operating one for yourself (besides the obvious of losing your shirt). Specifically, tax implications or credit implications?

Edited by John Bender
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I still have over 500 shares of FCX I got at $10.08

I'm fine with holding it for a while, but should I shave some off with this week's pop? todem?

I did a lot of shopping this week:

50 Shares of AAPL (I'm happy with the number I got most of these at.) <$96 - we can speculate all day about their future issues with technology development, but it's as safe a bet as it comes these days to have a stake in IMO.

200 of Citigroup © @ 40.97 - this was just to get some diversification of my long term stuff, as I had no banking stocks. I liked C the best after the research I did over the past month or so

140 CAT @ 58.14 - again just to spread some of the portfolio because I knew I'd be buying a lot of oil this week (I'm with todem on his thoughts there)

The rest is FCX...

and...

SLB (110), XOM (220), UCO (350), KMI (600)

So, yeah....

Go oil.

Can anyone reach out to me with the layman explanation on a margin account and more specifically, the drawbacks of operating one for yourself (besides the obvious of losing your shirt). Specifically, tax implications or credit implications?

A margin account is essentially a line of credit that you can use to buy more stock positions than you have cash bankroll (not recommended) or have in place to cover purchases while waiting on previous purchases to clear.

In the latter you should not accrue any interest debt, but in the former you are gambling your investments returns will be higher than the interest you accrue in interest on the borrowed money.

It's kind of bs because everything today is instantaneous, buy fed rules say you cannot spend money received from a transaction within 3 days, or you're getting some kind of free ride. It's archaic bulldog, but it's the law. A margin account can be a workaround

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I still have over 500 shares of FCX I got at $10.08

I'm fine with holding it for a while, but should I shave some off with this week's pop? todem?

I did a lot of shopping this week:

50 Shares of AAPL (I'm happy with the number I got most of these at.) <$96 - we can speculate all day about their future issues with technology development, but it's as safe a bet as it comes these days to have a stake in IMO.

200 of Citigroup © @ 40.97 - this was just to get some diversification of my long term stuff, as I had no banking stocks. I liked C the best after the research I did over the past month or so

140 CAT @ 58.14 - again just to spread some of the portfolio because I knew I'd be buying a lot of oil this week (I'm with todem on his thoughts there)

The rest is FCX...

and...

SLB (110), XOM (220), UCO (350), KMI (600)

So, yeah....

Go oil.

Can anyone reach out to me with the layman explanation on a margin account and more specifically, the drawbacks of operating one for yourself (besides the obvious of losing your shirt). Specifically, tax implications or credit implications?

A margin account is essentially a line of credit that you can use to buy more stock positions than you have cash bankroll (not recommended) or have in place to cover purchases while waiting on previous purchases to clear.

In the latter you should not accrue any interest debt, but in the former you are gambling your investments returns will be higher than the interest you accrue in interest on the borrowed money.

It's kind of bs because everything today is instantaneous, buy fed rules say you cannot spend money received from a transaction within 3 days, or you're getting some kind of free ride. It's archaic bulldog, but it's the law. A margin account can be a workaround

This was the big hangup for me when I looked into one. So it's essentially affecting my credit like a 25k line of credit through Amex would? That really pisses me off.

As we've discussed privately a few times, I enjoy the minute to minute stuff and the locking of funds for a few days can be very frustrating when you miss an opportunity. I checked my tax documents for 2015 and made almost all of my profit on daily inverse buying and selling (for what it's worth)

Edited by John Bender
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I still have over 500 shares of FCX I got at $10.08

I'm fine with holding it for a while, but should I shave some off with this week's pop? todem?

I did a lot of shopping this week:

50 Shares of AAPL (I'm happy with the number I got most of these at.) <$96 - we can speculate all day about their future issues with technology development, but it's as safe a bet as it comes these days to have a stake in IMO.

200 of Citigroup © @ 40.97 - this was just to get some diversification of my long term stuff, as I had no banking stocks. I liked C the best after the research I did over the past month or so

140 CAT @ 58.14 - again just to spread some of the portfolio because I knew I'd be buying a lot of oil this week (I'm with todem on his thoughts there)

The rest is FCX...

and...

SLB (110), XOM (220), UCO (350), KMI (600)

So, yeah....

Go oil.

Can anyone reach out to me with the layman explanation on a margin account and more specifically, the drawbacks of operating one for yourself (besides the obvious of losing your shirt). Specifically, tax implications or credit implications?

A margin account is essentially a line of credit that you can use to buy more stock positions than you have cash bankroll (not recommended) or have in place to cover purchases while waiting on previous purchases to clear.

In the latter you should not accrue any interest debt, but in the former you are gambling your investments returns will be higher than the interest you accrue in interest on the borrowed money.

It's kind of bs because everything today is instantaneous, buy fed rules say you cannot spend money received from a transaction within 3 days, or you're getting some kind of free ride. It's archaic bulldog, but it's the law. A margin account can be a workaround

This was the big hangup for me when I looked into one. So it's essentially affecting my credit like a 25k line of credit through Amex would? That really pisses me off.

As we've discussed privately a few times, I enjoy the minute to minute stuff and the locking of funds for a few days can be very frustrating when you miss an opportunity. I checked my tax documents for 2015 and made almost all of my profit on daily inverse buying and selling (for what it's worth)

Not that bad. I'll explain more after I get done terrorizing the all you can eat shrimp special in port aransas

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I still have over 500 shares of FCX I got at $10.08

I'm fine with holding it for a while, but should I shave some off with this week's pop? todem?

I did a lot of shopping this week:

50 Shares of AAPL (I'm happy with the number I got most of these at.) <$96 - we can speculate all day about their future issues with technology development, but it's as safe a bet as it comes these days to have a stake in IMO.

200 of Citigroup © @ 40.97 - this was just to get some diversification of my long term stuff, as I had no banking stocks. I liked C the best after the research I did over the past month or so

140 CAT @ 58.14 - again just to spread some of the portfolio because I knew I'd be buying a lot of oil this week (I'm with todem on his thoughts there)

The rest is FCX...

and...

SLB (110), XOM (220), UCO (350), KMI (600)

So, yeah....

Go oil.

Can anyone reach out to me with the layman explanation on a margin account and more specifically, the drawbacks of operating one for yourself (besides the obvious of losing your shirt). Specifically, tax implications or credit implications?

A margin account is essentially a line of credit that you can use to buy more stock positions than you have cash bankroll (not recommended) or have in place to cover purchases while waiting on previous purchases to clear.

In the latter you should not accrue any interest debt, but in the former you are gambling your investments returns will be higher than the interest you accrue in interest on the borrowed money.

It's kind of bs because everything today is instantaneous, buy fed rules say you cannot spend money received from a transaction within 3 days, or you're getting some kind of free ride. It's archaic bulldog, but it's the law. A margin account can be a workaround

This was the big hangup for me when I looked into one. So it's essentially affecting my credit like a 25k line of credit through Amex would? That really pisses me off.

As we've discussed privately a few times, I enjoy the minute to minute stuff and the locking of funds for a few days can be very frustrating when you miss an opportunity. I checked my tax documents for 2015 and made almost all of my profit on daily inverse buying and selling (for what it's worth)

Not that bad. I'll explain more after I get done terrorizing the all you can eat shrimp special in port aransas

:lmao:

I'll give ya a call tomorrow if you're around?

Edited by John Bender
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I still have over 500 shares of FCX I got at $10.08

I'm fine with holding it for a while, but should I shave some off with this week's pop? todem?

I did a lot of shopping this week:

50 Shares of AAPL (I'm happy with the number I got most of these at.) <$96 - we can speculate all day about their future issues with technology development, but it's as safe a bet as it comes these days to have a stake in IMO.

200 of Citigroup © @ 40.97 - this was just to get some diversification of my long term stuff, as I had no banking stocks. I liked C the best after the research I did over the past month or so

140 CAT @ 58.14 - again just to spread some of the portfolio because I knew I'd be buying a lot of oil this week (I'm with todem on his thoughts there)

The rest is FCX...

and...

SLB (110), XOM (220), UCO (350), KMI (600)

So, yeah....

Go oil.

Can anyone reach out to me with the layman explanation on a margin account and more specifically, the drawbacks of operating one for yourself (besides the obvious of losing your shirt). Specifically, tax implications or credit implications?

I would look to get out on any real rally to the upside. The stock is under immense debt pressure. It's a pretty incredible story considering the amount of assets they do have. But the oil acquisitions have bit them really hard.

It is 50/50 if they survive as FCX at this point.

It's a tough call though to eat a huge loss. I can see a 30% and be happy I am out. but once you get to the 50% plus it is very hard to ever recover that.

Monitor the company closely, read all news related to it. It's a very tough call. I will do some more research as well because it looks like a nice stock to day trade right now (something I rarely do). I have traded the stock the last 3 years and have had an overall loss ....I gave up on it on the last time I was stopped out. I had gains as high as 35% sold it....bought it back...stopped out after going down 20%, bought it back 20% more down...sold 15% up etc etc....it's been a roller coaster. But I got murdered on it this past year.

Edited by Todem
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