<Is it totally insane to be thinking about buying back a company that is forecast to have a 60% decline in profits this year and just a mediocre outlook over the short- to medium-term? At the same time, the sources I use for my outside opinions (Value Line, M*, and Fidelity) are all at least slightly to moderately bullish on CVX.>
Not insane, but you might not want to jump in all at once. I'm talking my book here as I posted this week I'd added to my CVX and OXY, but only 10% increases. I can't predict the future, but this does not feel like a short term deep oil bust to me. It feels like 1986 -- as an oilpatch worker, I'll never forget that year and how long before the company I worked for returned to having thousands of employees after cutting back to just 200-300 due to the '86 bust -- I'm still not sure why I was kept on despite being one of the last people hired before the bust.
My point is that I think patience is the most valuable commodity to have while evaluating potential oil-related investments right now. You don't have to hit absolute tops or bottoms to pocket a lot of money... I'm quite happy to miss the first 10% move up in a new (real) oil bull because it's much easier to see bottom from there and busts this severe are going to have volatile and protracted recoveries, IMO -- again, no guarantees... just what my gut and brain tell me after 29 years working in the OSX sector of energy.
Oil and many stocks in the sector are up significantly since the lowest point (so far)... maybe that was the bottom? Maybe... but maybe not... there will be opportunities to realize some great cap gains in the oil sector before this is all over... I started nibbling a little bit, but my experience told me that the more patient I am, the more likely I'll realize those cap gains in the end... I say this despite being a firm believer in DGI and/or IG... so I'm nibbling on divvy payers in the sector in an attempt to capture total returns and trying to resist the impatient urge to boost investing/reinvesting in the sector above and beyond the divvy reinvestments I'll get anyway by already having owned these stocks for some years... so I compromised and just bought a little bit now... if I'm right about the patience paying off, I'm sure I'll be able to add much more along the way -- if not? At least I got something extra.
As with any of my opinions on the oil sector, use or flush the above as appropriate to one's own style, plans, etc... I'm just putting out there what I'm doing and thinking and would never suggest I have the best ideas or answers... by putting it out there on this board, I've learned that it often generates feedback that can be quite instructional to me as well. |
