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Oil outlook changing any time soon?

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dozulu
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Oil outlook changing any time soon?  Reply with quote  

I bought into some Bakken energy, pipeline, and natural gas funds in January of this year. I had about total 60k that was burning a hole in my pocket at the time. My wealth advisor has told me to wait, wait, wait, this is bound to turn around. So I keep waiting for the Saudi pressure and oil glut to end.

Since we have not seen oil this low in decades, I felt safe buying into it at bargain prices. Now I am asking myself if it is ever going to rebound.

My Professional High Poohbah of Money tells me that I should hold.

Why does everything I pick, go down?

Am I the only one in this pickle?
Post Fri Nov 27, 2015 6:37 pm
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oldguy
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quote:
My Professional High Poohbah of Money tells me that I should hold.
Why does everything I pick, go down?


I'll give you my thinking on "that pickle" (been there often). When I started investing, I tried to pick individual companies hoping to hit a home run. After dozens of "lessons", I realized a couple things. One - you can only 'bet' a small part of your money, say 5%? So if you DID hit a home run and that stock doubled, it would only add 5% to your portfolio. And Two, you will spend all kinds of time waiting for a stock to pay off. That time is 'down time', your money is tied up and not growing. Later, in my 30's I decided to buy several stocks, all blue chip - but I still had 'down time' while one of the losers flat-lined, and then I had the cost of selling, replacing it. So then I realized that's really what mutual funds do. So I bought a mutual fund (index Funds & ETFs had not been invented yet. And even later, beginning n the 1980's or 90s, I switched to Index Funds. No trading, you just keep all 500 major corporations, good or bad. But a bad one is of small consequence, the other 499 carry it. And the index funds are unmanaged so the fees are tiny. In general, the longterm average is 11%/yr, has been for a century or more. That 11%/yr means that your account doubles about every 7 years, that is a better return that most stock pickers and most fund managers can do - due to no 'down time' and low fees.

As for whether BKEN will come back and fix that 40% loss - I don't know any more than your High Poohbah. Which is why I haven't owned an individual stock in about 25 years. (And earned >10%/yr).
Post Fri Nov 27, 2015 8:49 pm
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dozulu
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So you dont keep any cash on hand to take advantage of market dips?

I had gotten this unexpected money and since oil had been so expensive so long, it looked like a no brainer for me. So I walked into the office and told him what I wanted the money to buy. He spread it across some energy funds but also bought the thing I wanted. Now, I am here wondering why I needed to think that I knew enough to decided what to buy. That humbling experience has taught me that I dont know as much as I thought I did.

Thankfully that is not a significant part of the portfolio but it pinches that I was the idiot that picked it. I am sure that eventually the energy holdings will come back up. But while I wait, that money is not generating that much in dividends.

Do your index funds pay any dividends?
Post Fri Nov 27, 2015 9:33 pm
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oldguy
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quote:
So you dont keep any cash on hand to take advantage of market dips?

Do your index funds pay any dividends?


No, I don't keep any trading cash, I just buy incrementally and accumulate, no sales.
The div is about 2.5%.

Here's a good website for checking, pick out some 30-yr-blocks and see if they average 11%/yr (total return counting divs)
http://politicalcalculations.blogspot.com/2006/12/sp-500-at-your-fingertips.html#.VljAyr-8k3h
Post Fri Nov 27, 2015 9:48 pm
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Wino
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I work in the oil patch. According to a site I visit frequently, the insiders are suggesting oil will rebound no earlier than the end of the second quarter next year, but probably no later than the end of 2018. This is pure speculation.

I think that we're looking more toward the latter (late 2018) than the former for the rebound.
Post Mon Nov 30, 2015 11:14 am
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dozulu
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Thank you!

At some point the saudis will blink, or Putin will diisrupt supply in Turkey, or some other change will occur.

I think you are right. It will eventually come up because it is cheaper now than it has been in decades.

I was told by someone with 6 oil wells in Texas,p that people are coming in and buying up oil leases while they are cheap. He is not in the Eagle Ford, but close to it.
Post Mon Nov 30, 2015 4:39 pm
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dozulu
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Yesterday, I saw that Warren Buffet had doubled down and purchashed an additional 10.2 million shares of oil stock. This, following a similar size purchase last month. This is a positive sign for the coming end of the down cycle for oil.

Last week, my wealth advisor pointed out during the meeting that historically, although we ave election year volitility, low oil prices always equate to healthy economic growth. Conversely, when we have events like 2008, oil will be at record high levels. At least that is what historical trends indicate.

I bought more oil, so I was glad to see Buffet was doing the same. If we are not at the bottom of the long curve, we are very very close.
Post Tue Feb 02, 2016 4:12 pm
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global
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I wonder if well known people affect stock prices. If Warren Buffet decides to buy or sell a stock then money will follow him, because of his reputation. So say Buffet buys a bunch of stock from such-and-such thing. Other people who follow him will soon buy the same stock. It becomes a pattern that the market-people-that-control-the-stock-prices notice and decide to increase the price of the shares ahead of time. So if you have that kind of reputation you can make money picking stocks at random?

Also, if there is a stock that consistently goes up then this is psychologically safer for people so you can expect that stock to keep on going up since everyone else thinks it will and will continually buy it.

Basically what I've read online about the stock market is that supply and demand mixed with secretive people that magically make decisions make it go up and down.

So you can buy a stock and convince as many people as you can to buy that stock you will make money. So spread the word about the oil thing and maybe you'll get rich. I'm a newb though so I might not know what I"m talking about lol.
Post Wed Feb 10, 2016 12:56 am
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dozulu
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I bought oil a year ago, well, my money guy bought on my instruction. Just recently, at te January meeting, we revisited the bottom of the oil curve. Last year I had money burning a hole in my pocket so I jumped the gun by a year. I saw that Warren Buffet had bought oil stock in early January, then doubled down with another 10.2 million shares a couple of weeks later. I think it is a good sign! So I bought more oil. The way I see it, we are not going to see prices this low for a long long time. We are one middle eastern snit away from higher oil!
Post Wed Feb 10, 2016 2:47 am
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oldguy
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""supply and demand mixed with secretive people that magically make decisions make it go up and down. ""

For the most part - no, that doesn't happen. Any one of the SP500 stocks trades millions of shares up/down daily. The millions of buyer/sellers mathematically overwhelm any person or consortium so that they are truly a drop in the ocean.
But theoretically, the daily trade on some of the tiny penny stocks is very thin - a billionaire might be able to buy enough to jiggle the price. But that is mostly urban legend - people like to blame someone.

But back in the 1970s, the Hunt Brothers famously cornered the Silver market - and then went broke.
quote:
Beginning in the early 1970s, Hunt and his brother William Herbert Hunt began accumulating large amounts of silver. By 1979, they had nearly cornered the global market.[8] In the last nine months of 1979, the brothers profited by an estimated $2 billion to $4 billion in silver speculation, with estimated silver holdings of 100 million troy ounces (3,100,000 kg).[9]

Primarily because of the Hunt brothers' accumulation of the precious metal, prices of silver futures contracts and silver bullion rose from $11 an ounce in September 1979 to $50 an ounce in January 1980. Silver prices ultimately collapsed to below $11 an ounce two months later. The largest single day drop in the price of silver occurred on "Silver Thursday."

[/quote]
Post Wed Feb 10, 2016 3:22 am
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liloupieto
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The Oil futures are bearish and is striding calm waters  Reply with quote  

The crude oil price futures are slightly bearish early in the first day of this week’s trading session, after a three-day Easter break, as investors witnessed a three consecutive weekly gain in oil prices that was brought out by North Korea’s missile launch on Sunday.
Post Fri Apr 21, 2017 6:28 am
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