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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (21244)	12/1/2014 6:53:49 PM
From: JimisJim	1 Recommendation Recommended By Mannie Read Replies (4) \| Respond to of 34328

chowder, yes I remember reading that you'd sold your SDRL... I also sold all of my "trading" shares I'd picked up and retain a 1/2-size position that is pure speculation and not part of my DGI PFs -- in fact, it is my only non-DGI holding for now. The reason I keep that spec position (and will likely add sometime after Feb., when all of the oil hedged by many companies at $90 or more expire and likely will make oil company shares even more of a bargain. For perspective, even DGI stalwarts like CVX and XOM have been hit quite hard lately, but I don't care... in fact I love it... the divvies are quite safe (I own CVX and several mid-stream companies as well as some MHR-D preferred shares -- which have also been hammered of late)... companies like CVX are not going out of business any time soon, but their shares are being hammered as if people actually think they will go under... I'm sure you are well aware that in oilpatch, these sorts of things happen regularly -- granted the depth of this bust ranks in the top 3 in my personal experience working in offshore oil for the past 30 years, but these stocks will recover and thrive again until the next time -- boom/bust is normal in oilpatch companies, even major ones. And that's why I have my spec play in SDRL, and will likely add to it in March or so, depending on the usual factors : it is the largest and highest spec offshore rig provider in the world; suspending the divvy knocks it out of DGI consideration, but ironically is what solidifies my conviction that it will survive this bust. The $2 billion not paid in divvies significantly improves their "leverage" situation and their backlog is still quite healthy, as are their existing contracts, most of which run through 2017 when things should look very much improved for all OSX companies. The nature of their fleet positions them better than any other offshore rig company to thrive when things turn around. I am quite confident that the demand for deepwater offshore will strengthen. In fact, in Q1 or Q2, I will likely also add a position to my DGI PF -- ESV, a more conservative play than SDRL and more appropriate to DGI investing. Looking at all E&P and OSX stocks today, they all look like people think they are going to go out of business... XOM, CVX, COP, RDS, OXY, HAL, SLB, etc.... you don't seriously think they are going to $0... One needs to have a plan and check the details, but in general this ranks as one of the best opportunities for cap gains/total return in major oil E&P and OSX companies in my adult life. I fully expect further downside (tax selling this month, hedged oil contracts expiring -- even global economic downturns), so I'm not in a rush, but anyone looking for cap gains/appreciation in the oil sector or to just establish some longer term DGI positions would be crazy not to at least explore deploying some cash into the sector in the next several months or so -- these are opportunities that don't present themselves very often in a sector that won't die in our lifetimes -- it's like 2008-2009's housing bubble popping along with the stock markets in general... but unlike those events, we know that oil will recover because modern civilization requires it -- if oil doesn't recover this time (which would be a first in the history of the world to this point), then the world will be in such bad shape that we probably won't be thinking much about stocks and dividends, but more about daily survival. So, yes, my speculation in SDRL is all about cap appreciation and has nothing to do with the divvy at this point -- it was nice while it lasted, but it was simply icing on the cake for a stock in a company I wanted to own (and can buy quite cheaply). I like your spec plays (CTSH and GILD), but will concentrate mine in SDRL because I know (and understand) the company, the sector and the business so much better and am confident SDRL will not only survive, but conservatively speaking pay me back with a threefold cap appreciation, maybe a lot more, in 2-4 years. Appreciate your comment wrt LINE/LNCO -- those were two that I determined a few years ago that I was not interested in and have never owned or wanted to own any shares in either.