KDave

I have taken some profit on oil shares as we are touching $70 now, next profit taking at $80. 

The sentiment alarm is going off to the upside, no where can I find the "oil is dead" articles I was reading last year. I keep hearing about the commodity super cycle, impending inflation, etc. Its way too bullish out there.  

34 minutes ago, Kman said:

This is TLT (30 year US bonds) and Gold

If bond yields continue to go up expect gold to come down

I wouldn't be shocked if it comes down another 5-10% in the next few months but who knows, will depend on the new normal - how well the vaccines seem to work and how optimistic people are on global economy recovery

I personally think at some point this year an event will happen or a signal will appear that things aren't going to get back on track and that's when gold will kick on but who knows

 

Yes when real return is shown to be negative due to inflation, then gold will be back on the menu. 

It's the yield curve. Not looking good for the fed. 

Buying opportunity coming. 

With energy (oil) think long term. Think 3 digit oil. Think 200+ a barrel in a few years. Today doesn't seem so bad then, insignificant. 

2 hours ago, Bars said:

😏. Yeah im sure all of the countries that have been bombed to c**p agree with your sentiments. Th vast majority were not pre-emptive/defensive wars 

It's an idea, it's not my idea or belief. Entertain the idea might help us work out why the democrats worry about Mexican kids in cages but want to bomb Syrian children without a second thought.

Real politick is Machiavellian theory that power is the end game, might is right, everything else being distant second to that. So the point is, who cares what the Syrians or any other country the US bombed think if it's us or them. 

Obviously I am against bombing kids in Syria but who cares what I think. The democrats apparently don't even care what they themselves think. Unless they are Machiavellian, and say anything to get power, and equally, believe in nothing but power. 

11 minutes ago, Paul said:

America Has Been At War over 90%+ of the Time

222 Out of 245Years – Since 1776“,  

The U.S.A has only been at peace for less than 20 odd years total since its birth. 

Very interesting point!

To be fair to them and applying some real politik, if they were not doing it to someone else, someone else might be doing it to them (or us). Better our side bombs someone else's kids rather than the other way around. 

6 hours ago, HelpingHands said:

Biden straight to business with an airstrike.   I was expecting gold to react but nothing yet.

https://www.forbes.com/sites/joewalsh/2021/02/25/biden-launches-airstrike-against-iran-backed-militia-in-syria/

  

Back to the forever wars we go! 

2 minutes ago, HerefordBullyun said:

Oil wont stop this year all part of the commodities super cycle

Everyone is saying this, everyone is on this side of the boat now. All I read about is inflation, commodities super cycle, no one is talking about deflation but for a few hold outs. Last year it felt like it was just me. 

Makes me worried. 

1 minute ago, Stacktastic said:

 

Are these the same experts that said Greatland gold and Sol was going to the moon by now?  

Yeah I was thinking that earlier looking at my BP profits. 
Im taking the profits out every 10% rise. I extracted £135 profit yesterday. 

I learnt that lesson from GGP.

We just need a USA lockdown, but I dont think thats gonna happen now. 

Taking some out each 10% rise is a good system, locks in the profit. 

Though I have also learned to let the winners run, in the past I have taken profit once something is up 100% but always regretted it. Now I only take profit if there is good reason, for example if something fundamental has changed with the company or the investment thesis. I was really hoping for slow and steady with oil, $70 max this year and then steady rises into 3 digits over the next few years but it looks like it will be more volatile than expected. 

Oil price rises like that always signal recession. If we are $80 in 6 weeks then recession by the summer, I will be taking some profit. 

Brent touching $67 a barrel, seems like you may be right.

It has moved too fast for my liking. 

I will now say we get to $80 a barrel before the mother of all crashes, not just in oil but in everything.

14 hours ago, HerefordBullyun said:

Yep you will see oil easily hitting 100$ a barrel this year. The commodities super cycle is here now. I own 6000 shares in BP

$100 a barrel this year would be nice short term.

Oil rocketing up like that though, historically precedes a huge market crash. In the 70's rapid price increases in oil also coincided with market crashes, massive unemployment and high inflation. The 70's is the likely blueprint for the next 10 years, but now people are seeing the commodity inflation scenario speculation will make it a bumpy ride. 

I was expecting $70 top this year, $200+ at some point this decade, but $100 this year sounds good, I will start top slicing above $70. David Hunter said last year he expects 80% down in S&P this year, sounds like oil could be the push it needs.  

1 hour ago, Stacktastic said:

After selling it by mistake in the autumn - I'm back in boys.
outside of a crash I Cant see it going much lower than this & the dividend is worth it for a longer time hold. 

Going back to where I started.
I have cashed out of a lot of stocks now (mostly at a profit)  and am looking at a longer term strategy. 

I shall share my plan with your guys and see what you think??

Not a bad price at all if holding for a few years, reinvest the dividends and compound, sell at £8 a share in a few years time. 

Just keep a good eye on the woke CEO and let me know if he starts selling any of the company silver, the highest risk with BP at the moment is not the oil price its the management. 

6 minutes ago, Stacktastic said:

Good to hear I love oil, great asset. For now anyway. 

I would love it to be -$35 a barrel again, but that wont happen. Happy with $10. 
If the SM tanks later this year I will take a decent position in WTI assuming that goes with it. 
I would say 20%. Really annoyed I did not get in on the game stop stuff now, but Im learning day trading now. 
I have made a few nice wins and some colossal losses, this is hard work, especially today -£100.
I have learnt to wait and see what the market & stock trends are doing first, all looked fine and dandy and then ......

Just waiting for Cameco to be on sale now, but I want to make some cash first. 
I would happily drop 30% into that for the medium to long term. 

 

$10 a barrel? Don't think we will see that again for a long time. We are on the road to $70 this year in my view, with all the ups and downs along the way. 

I admire your energy, good luck with the trading. I missed out on Cameco, its still on the list, as are a couple of other companies in coal, steel, copper, etc. I am hoping for the big crash for another opportunity at commodities, but from what starting point? It might be that the lows are long gone and not coming back, especially if inflation hits first before any correction. I hope David Hunter is right on his macro and we see 80% off the market this year 

4 hours ago, Bumble said:

I think the environmentalists will go after big oil the same way that everyone went after big tobacco in the 90s. They were cash rich and an easy target, and there were 'smoking gun' internal reports indicating that the companies knew that smoking caused cancer and they suppressed the evidence and continued advertising. There are some similar features with oil. An internal report from within Exxon shows that they started building offshore rigs to a greater height because they predicted a rise in sea level caused by CO2 emissions. Every state and city that is on the coast might try to claim that oil companies should be liable for the cost of their sea defences. Obviously it would be hard to prove how much is down to oil and how much is coal or deforestation, and how much is caused by China/Russia/India or whatever, but the general mood of the public is that big oil has made a lot of money from selling oil, while climate change has resulted in an externality that has forced the public to pick up the cost. I think we can expect more carbon taxes as well, but I predict lawsuits will be a feature of the landscape.

Yes I expect the exact same thing with the oil majors as with tobacco in the 90's. Some people did extremely well out of tobacco because free cashflow meant investor returns sky rocketed via buy backs and dividends. No need for capital expenditure you see, because no new competition were coming into the sector, so it all went to investors. This will repeat in oil over this decade, oil is just as addictive as tobacco to the economy, combine that with decreasing supply, plus inflation, should be a good few years.   

Tobacco was just as hated then as oil is now in my view. Contrarian investing at its finest. 

Interesting perspective, it is true that big oil is an easy target given the environment (politically I mean). But in our legal system, if its not a specific event I don't see how 'damage to the environment' can be laid on the producers, who's fault is the damage to the environment, the guy producing it or the guy burning it in his car. Deep water horizon has cost BP tens of billions already, but it was specific to them. Shell's problems in Nigeria are specific to spills. If the green lobby are serious though the way they would do it is political lobbying for charges or taxes of some kind, Biden has already done some damage to the market with his no fracking, but this is ironically good for oil producers who now have reduced capital expenditure, and bad for everyone else who will be paying the resulting high prices in a few years. 

On juniors I have no recommendations, I am going to look at what the funds are doing and research from their picks first.

They have also recently cut their exploration team from 700 to 100 people. That is interesting, either they expect to be able to buy up assets on the cheap (no need to develop their own), or another sign they are going woke. Either way for now, it signals less capex and thus more investor returns in the near future. Longer term, uncertain. 

I really hope they are not going woke. Another article I read called "Why I sold BP" cited the reasons for doing so as a UK white paper to eliminate natural gas from the power and domestic grid by 2025....  Some people live in a different reality to the rest of us I guess, namely those in government. No hot showers for anyone, no central heating by 2025. No diesel/petrol cars by 2030 was the other reason for selling BP, again I laughed. It ain't happening, but as long as people THINK it is, then no one will notice the bargains in oil for as long as possible. 

3 hours ago, Kman said:

Surprised no talk of BP Q4, I must admit they totally skipped my mind to check

BP eked out a modest profit, but it was just a fraction of typical pre-pandemic levels. Cash flow, which failed to cover dividends and capital expenditure despite deep cuts to both, raised more fundamental questions about the company’s ability to sustain investor returns. Shares fell as much as 4.5%.

https://www.bloomberg.com/news/articles/2021-02-02/bp-earnings-fall-short-with-pandemic-hurting-fuel-sales-margins

Anyone else looked into it more deeply?

I had a look, they lost money achieving roughly same average price per barrel as previous quarter. That means at current oil price they are now making money (this quarter). The most important thing for me is that the have reduced debt - this is a good sign. Second to that is talk of starting share buy backs within the year, this is also good news but I would like to top up this year before the price moves up ideally. 

My only concern with BP is the management, they are going big on the green, which is where the losses are. I did read the other day though that they had defended their Russian projects, those are where the money is. If they sell their stake in Russia I will dump BP and move into another company that isn't going to destroy itself. So far so good though. 

Dividend maintained, can't ask for more given the yield. Happy to hold and see what management decides to do this year. 

Is it time to short GME yet? Must be due a move back to $20 soon. 

1 hour ago, Stacktastic said:

I seriously think we can be on to a winning super explosive new tech sector in the next few years. 
Im talking bought investing in a mines/producers or tech business that produces 50 fold returns. 
Its just a matter of getting in early and making the right moves. It could make bitcoin look like a game??

The robots, satellite systems, ai, 5G, genome, VR, information tracking and whatever else like that??
Asteroid mining projects maybe? Things are changing fast! Theories of putting your consciousness in digital are in discussion. 
Why mess about with the nuts and bolts when you can invest in pre or post IPO companies that can be the next Google?

This sounds like it could have been said in 1999, but you are right. If you can pick the next google then you are on to a winner but only if you hold. None of this "I will take profits in a year" stuff.

How many people bought Amazon back in the day and held until today, very few I reckon. Virtually no one. 

Have you heard of coffee can investing? I do not advise this, in my view its a misnomer because to me this is gambling not investing, but its interesting as an idea. Set up a 'coffee can', a new trading account with a broker that has minimal holding fees (iweb would be a good one for this), buy 10 or 20 growth/AIM/startup companies you like the look of, more is better, and then completely forget about them. Come back in 20 years, open the coffee can and see how they have done; most likely the majority would have failed and disappeared, maybe a couple keep up with inflation or outperform. What you are hoping for is that maybe one does an Amazon. Amazon must have 1000 bagged at least over 20 years, more? Its a pure gamble. 

That is what you are talking about here though right? Picking new companies that hold promises and not much else, to me that is a gamble. The narrative laid out about the times changing fast is not an investment case. 

2 hours ago, Stacktastic said:

You mean buy the dips I guess? Im treating the mining stocks like physical. Buy into it when they are on sale and add to the positions. 
Im selling them off though if they meet a reasonable high, probbaly start taking profits if they get to last summers level. 
Im happy shorting if it meets a set level (not worked that out yet - £2,500 gold £50 silver is a good target). 
I will then transition the profits to another sector, or back into mining if it show signs of going again.
Thats the plan anyway. Keep it simple and stick to rules. 

Yes basically buy the dips, take a partial position and then set targets to the downside to buy more, buy all the way averaging down until allocated. If the dips don't come then its cost average in over time until allocated. See what the market provides, requires no energy and acknowledges that price movements are unpredictable and out of ones hands, but attempts to take best advantage of the unpredictability. Who knows if its right or wrong. There is a danger that you could get the initial entry so wrong that you buy a falling knife and it never comes back, but if you have chosen a company that kind of thing would have to be down to bad luck or poor research. There is risk in every company though, for example BP might be a major company but what is to stop another deep water horizon, could happen at any time. 

China/Emerging markets I have no opinion because its mixed on China, Biden is CCP friendly but the dollar may have bottomed and could act as a headwind for emerging markets until the next downleg in a couple of years, but who knows. 

No doubt some of those tech companies will do very well over the coming years. In fact after the pandemic most of the big online companies like Amazon will be last man standing type thing, medium and small businesses killed off with a retail monopoly situation for Amazon. Netflix, Alphabet (Youtube/Google), Microsoft they are going no where because of who owns them. There are increasingly more companies doing the youtube facebook and twitter thing though, I am on some of the alternative sites and they are growing rapidly. The problem I have with tech now is I have so many other places to put money I don't even want to start looking into which tech companies are worth buying or not. If the balance sheets look anything like Tesla then I would not be interested even at 50% off, given the expected monetary conditions of the next few years.  

Those 3 stocks you mention are not my first picks but given how large and diversified they are they will likely do well. Amazon would be my bottom pick of the 3 specifically because of the retailer side of it. Profit margins will be squeezed for them when inflation takes hold, prices will go up for consumers and volume will drop on top. Not to mention 'tech bubble'. 

J&J and coke are the same story, consumer stocks, though I remember from the last recession that when people are hard up they stop spending on non essential items and start spending more on food and drink, the quick and easy wins for morale. People still buy the essentials so perhaps all 3 will be OK over the decade. 

If you got in at the exact bottom was it luck or judgement? Hard to prove either way, but I know which one is safer to believe from the viewpoint of investing psychology/human factor.

A good point regarding the amount of energy it takes to attempt that process, this I think is the more important point. Trying to time a entry like that costs time and energy, compared say to averaging in over time, or using ladders and treating each one as a gift from the market. Psychology; if you think you have timed the bottom and it keeps falling that is damaging to resolve hold, and erodes trust in ones judgement, when all that should have been sorted out before going to buy said stock. You make the judgement call when you say "I want to own that compay for xyz reasons", its done, trying then to time an entry is adding uncertainty to the process that can easily override the reason for investing in the first place. Compare timing the bottom on a psychology perspective to setting ladders, each one is a gift from the market rather than a correct or incorrect judgement call. Perhaps that only works for me because I am investing for the long term, which is much easier than trading for the mind as well, if you are holding for the long run you can ladder in and forget about it, less energy required. 

18 minutes ago, Kman said:

100% spot on

Speculation and then momentum can carry things a long way before any fundamentals enter the picture

I drew in a bottoming pattern for Shell with a top at 10, I wanted fundamentals to bring it above that an as entry, vaccine news sparked it to life and I wasn't interested because it was rising from speculation, but speculation was always likely to front run real recovery in demand

In certain situations it's better just to go with the tide whether you think the move is sound, too soon or anything else

The only fundamental for me was always that oil is energy and the global companies that produce it were at 30 year lows. Everything else, the inflation scenario and macro work was a bonus reason to buy. 

I learned a while back that every short term move in a share price is speculation, its noise and trying to time a bottom is impossible. I have not learned the lessons for jumping in on the way up.

Oil is a good example of the other side of that irrational market psychology, people were running away from the majors irrationally because the price was falling that was all. People were selling shares at 30 year lows thinking oil was finished. The herd psychology that creates bubbles works both ways I guess, though I am more comfortable taking a position on the way down. I wish I could bin off that mindset from time to time so I can get on the fundamental-less band wagon scenario and risk becoming a bag holder for some gains. So many gains lost over my investing experience because of that.

I would say the tide has certainly not moved on oil yet, sentiment is not anywhere near. I read the other day that oil is "sunsetting" can you believe that? Its finished. Its dead. Get out while you can 

Prices are still at decade lows in some cases though if we get this expected stock market crash there will perhaps be a better opportunity. 

I get it, its totally worth owning Total just for that kind of thing in my view the balance sheet is just a bonus 

I also own Exxon, Chevron and Repsol all integrated oil and gas, I think the US companies are in the top 10 for gas producers as well. As a UK investor I decided my biggest exposure should be BP then Shell, a decision made due to the dividend withholding tax situation of the others (15% US, 19% Spain, 28% French), but I wish I had bought more of the others, even after withholding tax the foreign oil companies are higher yield than Shell. I think in the future I will buy the foreign companies in my SIPP as I believe the shares are then exempt withholding tax, I could be wrong. That would leave BP, Shell and Gazprom for the ISA plus any mid/small caps I like the look of this year.

Going green is window dressing. It will not make them any money compared to conventional energy production but will assist them in other ways. BP will be producing hydrogen to mix with gas, using the electricity it generates from offshore for example. Shell will no doubt do the same with its investments. There just isn't any money in renewable electricity, the costs in vs what you get out don't add up, certainly no where near conventional energy. 

Tesla are part of the bubble but you are right, money was there to be made. Easy to see in hindsight, but I always seem to call bubble too early every time. The trouble of being over analytical and looking for a reason for it to go up - you would think by now I would have learned that reason is only a small part of the market. Most of it is emotion. Tesla doesn't make any money, relys on carbon credits to account for a profit but its meant to be a car manufacturer. Its reliant on borrowing and equity placing to raise funds, can't pay for anything from cashflow because there isn't any. The first situation is untenable with what's coming regarding inflation and interest rates, the later is what they will do when they can no longer borrow = not good for an investor. Its a 'next hot thing' or 'piece of the action' stock, people are not looking at it rationally. I wish I had realised that earlier, same goes for bitcoin, its worth no more than any other crypto but it doesn't matter.

BP, Shell and Total are in the top 10 for gas producers, I don't have any yet but would like some Gazprom (Russia) this year and Enbridge (Canada), then that's pretty much all geography covered. 

Mid-small cap producers I need to research this year. I think another crash is still possible, but given the state of the oil market in regards to supply I think the danger for oil companies has passed. Those with weak books will be visible by now with a few quarters behind us, should make picking the ones that will survive such a crash and later prosper easier.

The narrative will remain against oil and gas for years by the way, this will be a true contrarian position that will be reflected in the long term return for those who can hold on and avoid being shaken out. All imo obvs.