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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: DinoNavarre who wrote (200004)	11/17/2019 10:23:44 AM
From: Elroy Jetson	1 Recommendation Recommended By DinoNavarre Respond to of 206085

If Apple competed with thousands of other Apple companies around the world, their stock price would be much,much smaller as their profits would suffer from periodic 'apple electronic gluts' like the oil industry does. Instead Apple earns a 50% profit margin on their products - and that creates a lot of value in the market. Low profits mean low stock valuations, even if your revenues are larger than enormous. A refinery might have cost $15 billion to build, but it's valued at a small fraction of that when refineries are quickly losing money - and it should be obvious why that is. Chevron is more valued by the market than most oil companies because in a lot of different ways Chevron tries to avoid being in the 'commodity market'. Instead of selling generic wholesale gasoline, they mostly sell California specialty gasoline, and there's no crude oil or finished products pipeline between low-profit margin Texas and higher margin California. Chevron also pre-sells the output of major investments like LNG plants so the profit level they want is locked-in. Chevron management sees no advantage to being merely a big volume 'price taker' experiencing ruinous ups and downs.