My first trade - Shell / BP

[Stacktastic]

17 hours ago, AndrewSL76 said:

Thanks for taking the time to share this. Much appreciated. I absolutely need to take this more seriously if I am going to be in for the long term. For the time being I will follow the advice above and see how things go. It does seem from my initial reading that RR is a good buy for the future. Linked to the new car, the new single seated airplane and the ongoing return of more and more flights meaning more income etc. means that they should get stronger etc. Thanks once again.

I assume we are on about Rolls Royce LOL. Yes its a solid brand and even if there is a depression people will still buy them, especially in the east/middle east where this 'pandemic' has conveniently not hit. Dont know anything about the aerospace industry, but I am guessing that less planes are being bought? Good price on it historically. I considered it but I think there might be another crash before too long & after my hasty purchase of BP & Shell, Im exiting all my mining stocks & holding cash. I would like some Bitcoin if that goes down substantially & decent mining stocks, maybe paper metals? I wont have a lot of time if or when that happens though. 

Edited October 8, 2020 by Stacktastic

[KDave]

Government plans to act as expected; billions about to be invested in infrastructure, industry, ship building. The push into wind power is not good news for us who will be paying for it from an EROI perspective, this will show up in higher costs for everything, but that is coming anyway in conventional energy prices. It doesn't make sense today but in a few years wind power will be one of the cheaper sources relatively speaking. Also government spending to invest today by borrowing low and fixing now is the only way out from the mess that has been created over the past decades with nothing to show for it (borrowing for welfare). The intention is to generate inflation.

Notice that no one is asking what will be used for power when wind isn't blowing. Who is asking at what price conventional energy will be for wind power to become attractive and make sense. The answer to those is natural gas/hydrogen and much higher . This is not good for the consumer (myself included), energy bills will be much higher, and everything from food to consumer goods will cost more because everything requires energy throughout the production chain. Should be good for the oil majors that are pivoting towards LNG/Hydrogen, mining companies that can pass on the cost of inflation, the first parts of the food supply chain (fertiliser), engineering/defence companies that will play their part in the upcoming infrastructure projects, and PM's that will do well, especially silver because of its industrial properties. All imo.

[Stacktastic]

6 hours ago, KDave said:

This is not good for the consumer (myself included), energy bills will be much higher. 

I think technology might increase things as i am sure they already have tech that can provide a house energy for £50 year. Musk has introduced much better solar panels for the same cost as the old ones, so this is always an option, but you are right, this tech is great when its sunny or windy, but as I say they might introduce a battery the size of a car battery that can hold power for a few days of energy etc?? Especially if they bring in 'battery tax' or something. In the medium term the nuclear sector should do well and in the immediate oil as already discussed. I missed out on a big dip on Yellow Cake on 212, but I really think that a crash is round the corner for everything? If not then fine I at least have money to feed my family.

[KDave]

16 hours ago, Stacktastic said:

I think technology might increase things as i am sure they already have tech that can provide a house energy for £50 year. Musk has introduced much better solar panels for the same cost as the old ones, so this is always an option, but you are right, this tech is great when its sunny or windy, but as I say they might introduce a battery the size of a car battery that can hold power for a few days of energy etc?? Especially if they bring in 'battery tax' or something. In the medium term the nuclear sector should do well and in the immediate oil as already discussed. I missed out on a big dip on Yellow Cake on 212, but I really think that a crash is round the corner for everything? If not then fine I at least have money to feed my family.

I have thought about this, preparing as much as I can for the cycle by investing now in the house to reduce costs. Solar panels would definitely be a good idea. I have a gravity fed heating system so was planning to hook up the panels to the hot water tank immersion heater, then any electricity I am not using would heat the water and save on gas bills. I could probably get away with not firing the boiler half of the year then, only need it in winter for heating, and electricity bills would be mostly covered (south facing roof). I could do with new UPVC windows as well, stuff like that will get more and more expensive as time goes on. Solar panels are the least efficient form of electricity generation in the UK though I would much prefer a small wind turbine but I don't think they are allowed.

I am not a believer that a technology will come along and make energy vastly cheaper to £50 a year, perhaps we can find something one day that saves a few quid a month off the bill but fusion is always a decade away and I can't think of anything else that has the same potential for generation. Potentially tidal energy? I believe it is the cheapest energy possible in terms of investment in vs energy out and we have a lot of coastline in the UK so perhaps the moon could provide all our power needs one day. Or perhaps as you say energy storage will be the thing that makes the difference as then existing power generation from the grid becomes much more efficient, less wasted power, less spikes in demand causing additional supply to come online (at additional cost), and then electricity will get cheaper through efficiency savings. 

[Stacktastic]

1 hour ago, KDave said:

I have thought about this, preparing as much as I can for the cycle by investing now in the house to reduce costs. Solar panels would definitely be a good idea. I have a gravity fed heating system so was planning to hook up the panels to the hot water tank immersion heater, then any electricity I am not using would heat the water and save on gas bills. I could probably get away with not firing the boiler half of the year then, only need it in winter for heating, and electricity bills would be mostly covered (south facing roof). I could do with new UPVC windows as well, stuff like that will get more and more expensive as time goes on. Solar panels are the least efficient form of electricity generation in the UK though I would much prefer a small wind turbine but I don't think they are allowed.

I am not a believer that a technology will come along and make energy vastly cheaper to £50 a year, perhaps we can find something one day that saves a few quid a month off the bill but fusion is always a decade away and I can't think of anything else that has the same potential for generation. Potentially tidal energy? I believe it is the cheapest energy possible in terms of investment in vs energy out and we have a lot of coastline in the UK so perhaps the moon could provide all our power needs one day. Or perhaps as you say energy storage will be the thing that makes the difference as then existing power generation from the grid becomes much more efficient, less wasted power, less spikes in demand causing additional supply to come online (at additional cost), and then electricity will get cheaper through efficiency savings. 

Yeah like timing markets & believing the youtube 'silver will hit £1,000000 an ounce'. 

Making changes like your windows is good. We have tons of wood for free in our drive, that makes an impressive difference, to the house temp on our small fire. I want to get solar panels, but its so much money to invest, I would really want decent storage. I am hoping that a decent government backed system comes back. 

[Kman]

https://www.standard.co.uk/business/investors-go-on-a-bargain-hunt-snapping-up-bp-shell-and-rolls-royce-shares-a4566656.html

"Investors go on a "bargain hunt" snapping up BP, Shell and Rolls Royce shares

RETAIL punters are betting heavily on oil and travel related shares making a bounce back, the latest figures from Hargreaves Lansdown show."

If retail investors think they have bottomed out It makes me think they haven't yet, but then retail investors seem to like anything that's fallen a lot -they can't be wrong all the time

Q3 results should be interesting 

I've been watching solar/green stocks and they have been shooting up since the 25th September, not sure if that's a bet on Biden winning. When I say shooting up it's 40-60% 

 

Edited October 9, 2020 by Kman

[KDave]

Maybe they have not bottomed, maybe they have, who knows mate. The idea was not to try catch the bottom it was to build exposure to sectors that will do well in the industrial cycle. All year I have been saying it, telecoms, energy, mining, while the market hated on them and bought tech, Tesla, Apple, etc. Now the sectors get some action, is it the market wising up or is it as the article says, new entrants seeing value in 25 year lows and taking a punt on a bounce back, I would expect the latter. Which means as you say there could be more downside in the short term, I was hoping for a few more months of buying in oil I really like Total and had missed it until recently. We will see. 

I am hearing calls for oil to be $50+ by year end, that would not be the best case in my view as the best returns will come from a true shake out in the oil industry, killing off shale with sub $40 oil for a period of months. BP can break even on $35 a barrel, shell is aiming for $30. Imagine break even at $30 a barrel when oil is at $80-$100 end of 2021, no new entrants coming into the market (because oil is dead right) CAPEX massively reduced, where are all those profits going? Hopefully not all into windmills  most of it will go to share holders via buy backs and dividends but we will see. 

I don't think the market is buying oil for the reasons we have been exploring here, it is bargain hunting and gambling on a bounce back but who knows, once the stock is bought for a punt it can easily turn into an investment if circumstances turn positive, lets hope not for my desired position in Total's sake.

May I ask what are the green stocks you are looking at please anything UK based?  

[Bumble]

On London, I own The Renewable Infrastructure Group (TRIG.L), which hasn't performed particularly well, but it pays a nice dividend. On Nasdaq you might care to check out Clearway Energy (CWEN) and Brookfield Renewable Partners (BEP). If you like royalty companies, check out RE Royalties (RE.V).

[Kman]

6 hours ago, KDave said:

May I ask what are the green stocks you are looking at please anything UK based?  

Wind

• Vestas Wind Systems - VWS
• Siemens Gamesa Renewable Energy - SGRE

Solar

• Canadian Solar - CSIQ
• Enphase energy - ENPH
• First Solar - FSLR
• Vivint Solar - VSLR
• Solaredge technologies- SEDG
• Ormat technologies  - ORA
• Sunrun inc - RUN
• Xinyi Solar - 0968.HK (manufactures solar glass)

Utility

• Nextera - NEE (does solar and windfarms I think but supplies the energy as a utility company)

None UK, I think the windfarms are EU, Xinyi is Hong Kong and rest North American

[Bumble]

Does anyone know why Anglo Pacific Group (APF.L) is so cheap? I bought them two years ago at about 140, and then sold at about 190. They are now back down to 105. This is a stable, reliable company on a P/E of 7, paying a dividend of over 6%. It is a royalty company with assets in base metals and potash. I understand that it owns thermal coal royalties and these are of diminishing value, but even so, this seems ridiculously cheap for a royalty company. I'm looking to buy back in.

[KDave]

2 hours ago, Bumble said:

Does anyone know why Anglo Pacific Group (APF.L) is so cheap? I bought them two years ago at about 140, and then sold at about 190. They are now back down to 105. This is a stable, reliable company on a P/E of 7, paying a dividend of over 6%. It is a royalty company with assets in base metals and potash. I understand that it owns thermal coal royalties and these are of diminishing value, but even so, this seems ridiculously cheap for a royalty company. I'm looking to buy back in.

Thanks for highlighting this, I like the look of APF from the 2020 AGM slides and looking through the royalties page on the website. I will do a bit more digging. My first thought for its performance is sentiment, caught up in the same wave of irrationality as the rest of the energy stocks but it appears well diversified. They say in the slides they are not making any more investments into coal, which perhaps like BP saying it will move away from oil has had the same effect on investors who have sold to look elsewhere for someone who will invest in coal. Coking coal is used exclusively for steel production? If so I don't understand the move away from it, we are going to need more not less over the next decade. 

[Stu]

8 hours ago, Bumble said:

Does anyone know why Anglo Pacific Group (APF.L) is so cheap? I bought them two years ago at about 140, and then sold at about 190. They are now back down to 105. This is a stable, reliable company on a P/E of 7, paying a dividend of over 6%. It is a royalty company with assets in base metals and potash. I understand that it owns thermal coal royalties and these are of diminishing value, but even so, this seems ridiculously cheap for a royalty company. I'm looking to buy back in.

Would the 5million share buy back have any bearing? (Albeit , announces 25 Sept, genuine question)

[KDave]

On 10/10/2020 at 14:35, Stu said:

Would the 5million share buy back have any bearing? (Albeit , announces 25 Sept, genuine question)

This should be positive for the share price naturally, and there is never a more sensible time for buy backs than at the lows. This is the kind of action you would expect from good management.

[Stacktastic]

Who thinks that if there is another market collapse and world lockdown (lets face it the flu season is here) and what do you think will happen to BP? Im half considering adding more funds where i think its the bottom, but I know it could be quite dangerous, if the market collapses again? Im £250 or so down on BP, so Im tempted to just leave it as it is and just appreciate the long term dividends. 

Or would it be worth being the idiot this man is talking about?  as I dont think BP are going bust any time soon, plus I cant see it going any lower than 200? I said it would not go lower than March lows, so i am not too confident. My gut says cut my losses and forget it! 
 

 

[Bumble]

BP and Shell are all about the price of oil. It has been stuck around $40 for a while now. For as long as it stays there, oil companies' woes will continue. You should not expect a recovery in the share prices unless you believe that oil will ruturn to at least $60 or so. At present, there is still a glut in production, and stocks of oil reserves are growing. The Saudis and the Russians have been cutting back a little, but both are under enormous fiscal pressure and will increase production on any sign of increased demand. Meanwhile the plague has depressed economic activity and reduced demand. A game changer would be the USA deciding to ban fracking, but Biden has said he will not do that. It is not really a happy time to own oil stocks, though like others here I will keep a close eye on them with a view to buying back in.

[Stu]

Bought BP today at203. It’s a long term hold and the first single company I have bought. 

Thinking on selling half when price doubles and reinvest the original stake elsewhere. 

[Kman]

I just saw this on reddit, I presume it's right 

I don't know what other countries are doing but it seems likely lockdowns by one name or another are going to enforced progressively stricter again 

Further going to damage oil demand

Q3 end of the month for most oil, see what the damage is there too 

[Stu]

34 minutes ago, Kman said:

I just saw this on reddit, I presume it's right 

I don't know what other countries are doing but it seems likely lockdowns by one name or another are going to enforced progressively stricter again 

Further going to damage oil demand

Q3 end of the month for most oil, see what the damage is there too 

Much like my precious metals, any stocks are a medium to long term play, I.e. 5 to 10 years so hopefully will do fine.

Are you day trading @Kman? 

[Stacktastic]

On 16/10/2020 at 21:38, Stu said:

Much like my precious metals, any stocks are a medium to long term play, I.e. 5 to 10 years so hopefully will do fine.

Are you day trading @Kman? 

Yeah Im not over bothered with Shell & BP going down further. I have left them now as they will come back again at some point. 
I will double down on WTI when I think thats hit the bottom though as Im £30-50 up most days as it is with £800 down, so its not too bad. 

[Bumble]

The price of oil may rise on a Biden victory. Biden has said he will not ban fracking, but he probably will make it more difficult for new drilling to take place. This could cause supply to decline a little and push the price up. It would be bad for oil companies exposed to fracking, but good for others, especially ones with relatively low exposure to the USA.

Bear in mind also that the green lobby is preparing to sue oil companies for the damage caused by rising sea levels. They want to extract cash from oil companies in the same way that tobacco companies were made to pay for the health problems caused by cigarettes. At present we have no idea whether such suits will be successful, but it will be enough to make many institutional investors nervous.

[Stacktastic]

48 minutes ago, Bumble said:

The price of oil may rise on a Biden victory. 

green lobby is preparing to sue oil companies for the damage caused by rising sea levels.

I heard that about Biden. If fracking was banned, then that would be fab for Shell & BP would it not?
I literally have no idea who he is or what he looks like & I don't particularly care, but as it affects the markets I am paying a bit of attention to key dates. 

What do the oil companies have to do with it it cant all be blamed one them can it?
Its like blaming obesity on Supermarkets. People have the choice to drive or not dont they?
What about volcanoes, cows & coal burning from the 1760 to 1940 etc. etc. 

Anyhow, I thought the melting of the ice caps was as normal cycle & global warming was largely made up by Mr Rothchild et al.
Its a perfect story as it combines fear of the unknown with personal guilt & public blame.
Remember that 'scientific' model that showed the UK in an ice age by now some time ago! Same people that mapped out CV infections & deaths in Feb. 
Its 10,000 after the last ice age, in another 10,000 years it will freeze up again. Somehting like that anyway, surely there must be evidence for this? 

I wonder if Noah or the inhabitants of Atlantis sued Adad (Ramman) for the sea level rises back in the day? 😛
But yes it is a threat, but one of the reasons the stock price has remained such a bargain.
They have deep pockets and will transition out. 

Edited October 21, 2020 by Stacktastic

[Kman]

3 hours ago, Bumble said:

The price of oil may rise on a Biden victory

Bets have already been placed on presidential victories, green stocks (Biden) for example

Oil stocks have seen no love so I don't think anyone is expecting a recovery for oil prices either way 

Safest bet is more lockdowns and travel restrictions over winter, bad for oil

Q3 results for oil are in the next 10 days, if companies further cut dividends or things have been worse than expected.. will be interesting

[Stacktastic]

1 hour ago, Kman said:

Bets have already been placed on presidential victories, green stocks (Biden) for example

Oil stocks have seen no love so I don't think anyone is expecting a recovery for oil prices either way 

Safest bet is more lockdowns and travel restrictions over winter, bad for oil

Q3 results for oil are in the next 10 days, if companies further cut dividends or things have been worse than expected.. will be interesting

Do you have the dates for this Kman

Edited October 21, 2020 by Stacktastic

[KDave]

1 hour ago, Kman said:

Bets have already been placed on presidential victories, green stocks (Biden) for example

Oil stocks have seen no love so I don't think anyone is expecting a recovery for oil prices either way 

Safest bet is more lockdowns and travel restrictions over winter, bad for oil

Q3 results for oil are in the next 10 days, if companies further cut dividends or things have been worse than expected.. will be interesting

Then people are betting the wrong way, as Biden is not going to win the election 

Oil stocks will continue to be hated, it is political, fashionable, moral even. Once cashflow is rolling in people will want to buy oil stocks regardless. I read that NEST the UK biggest pension fund is no longer investing in oil and gas, another massive contrarian indicator.

Demand growth in energy is the easiest thing to see, as is the lack of supply. If we want to go full windmill in the UK, it is going to take a lot of energy to get there. 

[Kman]

 

51 minutes ago, Stacktastic said:

Do you have the dates for this Kman

https://markets.businessinsider.com/earnings-calendar

• 27th - BP
• 29th - Shell
• 30th - Exxon
• 30th  - Chevron

@KDave I'm only negative on oil for the near future (unless something fundamentally changes), I just don't think we've found the bottom yet but time will tell