Man -- This board has crumbled. We have Glen turing into a bear and others giving up on the sector. Can't say that I don't share and understand the frustration.
Here is what is interesting to me.
I have spent about 16 years involved in the offshore drilling business and therefore the oil business. I have been a writer, a reporter, an editor, a forecaster, a pundit, a broker and more. I have also known others that do all these things -- and get paid good money to do them.
And you know what? -- NONE OF THEM HAVE A CLUE WHAT THEY ARE TALKING ABOUT IF THEY ARE TALKING ABOUT THE FUTURE!
All of their musings about the future are guided by educated reasoning and logic -- interpolation and extrapolation. They try to say what the future will be based on the facts, as they see them, today. And in 50% of the cases, at best, it doesn't work.
The future simply can not be predicted. Look at the financial markets today. Many of the bellweather events that are supposed to trigger other events simply aren't working. Pundits say stock prices are too high...relative to WHAT? Maybe they are too high based on rules of measurement of 5-10-20 years ago...but every day there is a new ruler! The old rulers can't continue to be used forever.
Financial markets are dynamic. Capitalism is by nature a form of change and never is, never can be stationary. Yet the forecasts that these "smart" people make are based on stationary "rules".
There is an old trick in the stock brokerage business, now against the law, but I imagine it is still done.
You mail out 5000 letters to people making a strong prediction of a bull market in a stock or three -- or a particular market. You mail out another 5000 predicting just the opposite position. Out of the 10,000 letters you will be right on 5000 of them. Then you mail opposing market views to 2500 of the 5000 that you sent the "right" prediction to. Half of them will be right.
Do this a couple more times and you end up with a very hard core of people numbering about 625 that you have been right on target with your prediction four times in a row. These 625 people think you are a guru and do anything you say.
It has now come to pass that everyone and their pie maker think they are an oil analyst and can predict world events and world oil prices. Then they are even smart enough to know how the results of these predictions will affect certain stocks.
Anyone can get lucky. Even you, ordinary Joe, hold your position long enough you will eventually be vindicated correct and therefore you think you are a friggin guru yourself.
Folks there ain't nobody on God's green earth that can accurately and consistently predict the price of oil ONE DAY into the future. NOBODY, NOBODY, NOBODY.
Some days, some folks get lucky. Some days the other folks get lucky.
Personally, I don't pay a rat's ass bit of attention to ANYONE that predicts the future. What I do, is have a look at the situation as it is TODAY and take a risk on how it might be tommorrow (or whatever my time horizon is). Sometimes I am right and sometimes I am wrong -- just like the pundits. Hell, I once WAS a pundit. Sometimes I was right, and sometimes I was wrong.
My VERY SIMPLE basis for owning some of the offshore sector is that they are making a shit load of money RIGHT NOW AND WILL LIKELY CONTINUE TO DO SO FOR THE FORSEEABLE FUTURE.
How the market awards this success is way beyond me. Right now the companies are being bashed. But tommorrow and the next day and the next day are all brand new days and ANYTHING can happen.
There are lots of cute sayings for the performance of the market. Some of them apply now and then, but always in HINDSIGHT. Charting gives a road map of the past. But on EVERY chart there is that one certain point, that one day when things change and there is no one on earth that can tell you when that day will be until after it happens.
I have a calm. I am supremely confidant that it is a good move to own companies that make a lot of money.
So all of the nouveau oil forecasters can pundicate till the cows come home -- I will ignore them and own these companies.
Here is an analogy once told to me by Bob Palmer -- head of Rowan. I embellish, of course -- and it's not that great a story...but I'm bored.
Once there were two ants catching a ride on a floating log, travelling down a pleasant, peaceful river. The two ants were enjoying the ride, the view and life in general.
They were busy making plans for the evening and the next day and, of course, for the weekend. They had been riding this log for many months and were comfortable in knowing what sort of climatic conditions to expect that might affect their happy environment.
Then one day, as the ants were drifting merrily along, there came a sudden onslaught of rushing water from upstream that capsized their log, killed them and spoiled all of the plans they had for the future.
Little did the ants know they were on a river that was downstream from a big dam. And there was no way they could have anticipated that the man at the dam for some reason, also unknown to the ants, needed to release some water from the lake behind the dam. And of course since they didn't even know the dam and the lake existed or that the water would be released, they surely couldn't have known which day and at what time it would be released. And these were very smart ants who watched all the weather reports.
If they would have known they would have made different plans, I'm sure.
The ants were comfortable with their predictions of the future -- after all they had been successfully making their plans for many months. But there were factors upstream they knew nothing of. These unknown factors were actually in control of their entire environment, yet they had absolutely no knowledge of the mechanics of these factors.
So here we all sit...like two ants on a log. There are world events shaping every tick of the tape. There are influences on us that we can not control and actually know nothing of -- yet we are eager to listen to others that actually know nothing either, yet portend to be wise and predictive.
Will the river take us down? I don't think so, but you have to make up your own mind and act accordingly. Just be careful when giving credence to anyone that predicts the future.
Ok, I got my keyboarding practice in for this week. Sorry for the rambling on this one...but sometimes you just gotta EXPRESS! |
