What Did You Buy Today?

[fenders53]

(02-07-2020, 08:51 AM)Ron Ricco Wrote:

(02-05-2020, 01:33 PM)EricL Wrote:

(02-05-2020, 12:45 PM)fenders53 Wrote:

(02-05-2020, 11:36 AM)DividendGarden Wrote:

(02-05-2020, 10:51 AM)fenders53 Wrote: XOM and CVX are making cool powerpoint slides pretending they are into renewables going forward.

Haha!

I'm no doubt ticking members off that are crossing their fingers and riding these stocks down.  I would truly love to hear a forward looking bull thesis because all I read (elsewhere) sounds like 20 years ago.  I'm very open to other views.  IMO they are just very short trades until they get a meaningful plan.

The world uses 100 million barrels crude oil EVERY SINGLE DAY. There is surplus production, primarily thanks to US production growth from shale plays, that has resulted in depressed prices. I have doubts that this growth will continue into the future.

All the hysteria about electric cars and renewable energy doesn't change the fact that worldwide demand for fossil fuels continues to grow every year, and likely will for the foreseeable future.

Market sentiment is as bad as it's ever been on the industry, but the fact remains that unless there are huge technological advances in battery/electric power storage, EV's and renewable energy aren't going to take over the world. They are too inefficient, intermittent, and expensive with current technologies to fully replace fossil fuels.

That is why I continue to own CVX, XOM, and other energy companies.

https://media4.manhattan-institute.org/s...319-MM.pdf

https://economics21.org/inconvenient-rea...gy-economy

https://oilprice.com/Energy/Energy-Gener...tated.html

I own XOM and I agree there are that there are areas where there will be a need for oil etc.

I will say, I think some are underestimating EV’s and where the technology is. We aren’t dealing with the Leaf of 6 or 7 years ago. You can now buy a car with 300 mile range that has the ability to have an initial recharge rate of 1000MPH. With that sort of charge rate, worrying about taking a road trip is out the window.

Every morning I leave the house with a full “tank of gas” for a nominal price since it is charged at off peak times. With 300 mile range, there isn’t even a thought about having to plug in for in city driving etc although in most medium to large cities, there are plenty of options.

I will say that manufactures are playing catch up with Tesla when it comes to fast recharging etc so I think that will limit the demand for say an Etron until they can make a road trip more viable, but for in city driving there is no downside that I can think of. 

I have had 5 friends get the Model 3 over the last 15 months or so and not one of them has a desire to go back.

This would be a great idea for a separate thread.  Damn near all of us are invested in oil including me though I backed it off lately.  I know I talk out both sides of my mouth on the subject but I am a realist.  I own quite lot of BP and an ETF.  But sticking my head in the sand isn't sound investing.  I have no plan to buy and hold this into the dirt.  There is a LOT of biased reading on the internet.  Oil demand will grow, and it seems supply will easily outpace it.  My opinions are not anecdotal, they are a result of keeping my eyes wide open.  I haven't seen a Tesla on an Iowa road in six months.  I personally know zero people even considering a purchase.  If you can't charge at home it would be a bad idea to own one.  I know that could change fast.  That means very little as they clearly sell very well in more "socialist" states and countries.  Europe is threatening to ban ICE vehicles.  The risk is very real.  No oil major is going bankrupt, but look at their 2019 earnings.  Do you really think you have no risk these stocks drop another 10%+ while we wait for the next black swan event that will likely be temporary?  I don't want to see BP drop to 30 or XOM drop to 50 and stay there.  

Look no further than the Utes.  XEL was about zero renewables a few years ago.  Now they are at 20% already.  All the good Utes are headed in the same direction, almost without exception.  They get it.  Coal is dead and now the fossil fuel is Natty Gas which is just about free and providing no real help to the oil majors operating profit.  They flare it off where it;s legal bacuase it makes little sense to transport it.  That's not very green and that matters. There are countless oil bulls on S.A. and I suspect most of you read their writings.  Ten year price charts lead me to believe they are delusional due to their over exposure to oil.  Gasoline is $2.10 in Iowa today and the economy is doing quite OK IMO.  Haven't seen that for more than a week for about 15 years.  Oversupply seems very real.  That's the real issue IMO.  Feel free to disagree, but most of what I hear was true 10 years ago, and oil majors are not benefiting as far as I can see.  The EV story is equally over optimist IMO, at least in the short term, but the market looks forward.