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Strategies & Market Trends : Value Investing
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To: Madharry who wrote (74833)1/9/2024 3:11:51 PM
From: Harshu Vyas  Read Replies (3) of 78471
 
I purchased some xom for the first time to get more energy in my portfolio.
Out of interest, why XOM as opposed to CVX or even some of the smaller oil companies?

I like XOM's assets but I can't get over their management and strategy. All they care about is drilling and producing oil. No conservatism or care for shareholders. It's like Darren Woods didn't learn the lessons from the 2010s. Even if you don't think oil prices go up considerably, you have to consider the downside that may come from a glut (unlikely, but still possible).

Imo, the best way to look at oil companies is to focus on their real returns to shareholders* and not their production levels etc. I think DVN and OXY have good management teams - there are a few others that I can't fully recall (will have to look at my notes). CRGY also was worth looking at. Shame they don't really fit in my portfolio currently. I do like oil and will continue to spectate.

OT - Here's an interesting article I thought about after reading your Stephanie Link comments. I will refrain from reaching a conclusion. ;-)

The alpha of ugliness (ft.com)

(FWIW, if you don't have the FT (I get it for free from uni), I do recommend it. Just as good as the WSJ, but I don't think you need both.)

Best,
Harsh Vyas

*Not usually a fan of TSR but it can be useful if applied correctly here (I think, anyway).

EDITED - will include the sources from the article if anyone's interested. SSRN-id4322134-301bec51-74ff-4c81-9f93-f04d750b901d.pdf (d1e00ek4ebabms.cloudfront.net)

Is beauty skin deep? - ScienceDirect

Trust and Investment Management: The Effects of Manager Trustworthiness on Hedge Fund Investments
by Ankur Pareek, Roy Zuckerman :: SSRN
SSRN-id4322134-301bec51-74ff-4c81-9f93-f04d750b901d.pdf (d1e00ek4ebabms.cloudfront.net)

Analysts’ Beauty and Performance by Ying Cao, Feng Guan, Zengquan Li, Yong George Yang :: SSRN

Face Value: Trait Impressions, Performance Characteristics, and Market Outcomes for Financial Analysts - PENG - 2022 - Journal of Accounting Research - Wiley Online Library

Conclusion - humans are shallow.
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