(11-10-2020, 10:11 AM)EricL Wrote: Here's a new oil market analysis from one of the research firms I follow:Long article but I read a lot of it. It reminds me of a lot of S.A. articles. IMO only the foolish consider it a worthless commodity going forward. I've lost a lot of money over the past three decades believing that is all I needed to know. Just keep the faith and my day would come. Where I screwed up was thinking it was a long-term buy and hold investment like a blue chip DGI stock. It simply wasn't during most of my investment lifetime.
Well worth a read for those considering energy.
VBIN is fairly deep in XOM at $60. It looked like a good deal to me as well but I bailed and placed my capital elsewhere when it didn't appear to be so. I do believe XOM might return to $60 in 3 or 5 years. If the dividend holds it would be a decent enough return IMO. He needs it to go to $100 in five years for it to be a truly good investment. Opportunity cost matters in an epic bull market. You have to make money when we aren't in a five year sideways market.
It's not a small problem that "ethical" investors have shunned oil for years. What would change that? I definitely don't invest like that, but if the millennials adhere to the narrative it becomes a self fulfilling prophecy. It doesn't matter if oil goes to $100 BBL if fund managers won't buy the stock. It really is about market sentiment and that's not a original thought for sure. 60yr+ old plus investors will keep the faith alive for now, and write lots of compelling articles. Convincing young investors is the task at hand and they just voted in an anti-oil president. He was quite clear he believes oil will become a smaller part of the energy future and he has some influence on that outcome. He is wrong in the near-term but we'll see how much that matters.