The Long Game


LAW DAWG

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I hate to sound like a vulture capitalist, but for those of you that play the long game with stocks, like yours truly, this pandemic situation presents an opportunity.

Assuming you're able to, there are number of blue chip stocks down as far as 40%. If you look at oil and gas companies you'll see devaluations of their stock much lower than that.

Remember, I'm talking about the long game. The key is to identify companies strong enough to survive the current collapse of the economy over a long period of time.

Those type of companies will rebound handsomely when the economy recovers, the value of their stocks will rise as a result and you will either benefit from the quarterly dividens paid out or from the sale of your stock because of doing the smart thing of buying low and selling high.
 
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Long game? In oil and gas stocks? Do you really believe there is room for them to appreciate long-term?

Sorry for taking so long to respond, but I just saw this.

Long game as opposed to short game/short-term gain like day trading. Based on some things you've said in the past, I'm certain you already know what a time horizon is so I won't bore you with an explanation.

Oil and gas stocks are way down because of disruption to the global supply chain due to the corona virus and because talks on production levels for oil broke down between Saudi Arabia and Russia. Saudi Arabia, for now, won't play ball to help control the global price for a barrel of oil. They have flooded the market with a supply of oil the market has no demand for at the moment, emphasis on at the moment.

I strongly believe oil and gas will recover long-term, because the world and especially America is still heavily dependent on it. I also believe Saudi Arabia and Russia will eventually reach an agreement on production levels, the corona virus pandemic will eventually subside and demand will go back to prior levels over time.

Every company will not make it through, but all the well established ones such as Exxon (XOM), Royal Dutch Shell (RDS) and Chevron (CVX) will. Companies like Chesapeake (CHK), Apache (APA) and Occidental (OXY) will have trouble surviving and might get swallowed up in mergers by well established ones like the ones I mentioned earlier.

Take a look at the 52 week ranges of the following to get a clearer picturer:

Exxon: https://finance.yahoo.com/quote/XOM?p=XOM&.tsrc=fin-srch

Royal Dutch Shell: https://finance.yahoo.com/quote/RDS-A?p=RDS-A&.tsrc=fin-srch

Chevron: https://finance.yahoo.com/quote/CVX?p=CVX

In addition to those companies there are other oil and gas sector related companies that are worth taking a look at in my opinion. Plains All American Pipeline (PAA) is one of them because they are into transportation, facilities, supply and logistics.

To no one's surprise there stock is real cheap right now, but once recovery happens they will eventually rebound. Their one year and five year numbers are what caught my attention in comparison to their current stock price which allows for one time purchases of multiple stock.

I already have purchased multiple shares of their stock. I might wait to sell high, but there is a good chance I might hold them for quarterly dividends if I can purchase enough before things recover.
 
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I started last week making buys. I plan to but some more in over next few month. Definitely looking at who will survive this collapse.
 
I guess what I'm asking is what impact do you see electric cars having on oil and gas prices? Over the next ... five to ten years. What about trucking? If Tesla gets the semi off the ground and companies like Amazon start to use electric vehicles for delivery, what impact would that have? (Amazon invested $700 million in Rivian and ordered 100,000 delivery vehicles).

Oil and gas companies are also heavily subsidized. If electric vehicles take a significant share of the market, do you think governments could rethink their subsidies? And what effect would that have on stock prices?

Lastly, oil and gas are used for heating in our northern climates. Do you see solar energy and possibly tighter building requirements significantly affecting oil and gas prices?

I'm sure there will be ways to make money short term, Even over the next one to five years.

I'm just wondering what do you see for a buy and hold investor who may hang onto a stock for five to ten years or more.

Hmmm.....good questions.

If it was all a matter of the free market and common sense I would share some of the skepticism you have, but the reality is it isn't.

Domestically, I think electric cars will have some effect on oil and gas prices but I don't think by much at all. By and large Americans at the retail level are still buying gas powered vehicles despite all the talk about carbon emissions and the touting of benefits associated with driving electric.

Globally, I don't see electric powered vehicles making that much of a dent in oil and gas prices either.

Politically, both domestic and abroad the oil and gas sector will maintain its dominant influence with governments. In America those oil and gas subsidies have been bought and paid for many times over by lining the pockets of politicians via lobbyist and recurring payments to re-election campaigns every election cycle. The lobbyist aren't going anywhere and the welcome mat for them isn't either. Globally, oligarchs in Russia, Saudi Arabia, China and India will make sure oil and gas maintains its hegemony over other energy sources within their sphere of influence.

Solar energy will take its far backseat to oil and gas just like electricity. In fact, all sources of renewable energy already are taking the backseat be it solar, electricity, wind, hydro..etc...etc.

With all that said, in my opinion, the purchase of oil and gas stocks are still a viable choice for the foreseeable future.

FYI, Royal Dutch Shell began putting some emphasis on renewables years ago. I expect others such as Exxon will to do the same down the line.
 
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I guess what I'm asking is what impact do you see electric cars having on oil and gas prices? Over the next ... five to ten years. What about trucking? If Tesla gets the semi off the ground and companies like Amazon start to use electric vehicles for delivery, what impact would that have? (Amazon invested $700 million in Rivian and ordered 100,000 delivery vehicles).

Oil and gas companies are also heavily subsidized. If electric vehicles take a significant share of the market, do you think governments could rethink their subsidies? And what effect would that have on stock prices?

Lastly, oil and gas are used for heating in our northern climates. Do you see solar energy and possibly tighter building requirements significantly affecting oil and gas prices?

I'm sure there will be ways to make money short term, Even over the next one to five years.

I'm just wondering what do you see for a buy and hold investor who may hang onto a stock for five to ten years or more.
Amazon to suspend delivery service competing with UPS, FedEx
 
It will be interesting to see if the agent orange states will shutdown again if their hospitals become overwhelmed with coronavirus cases or will they just let people die in poor conditions as long as they go shopping, dining and getting their grooming on.

The stock market seems over inflated right now, the FEDS are doing everything they can to keep the market up. Hopefully a miracle will occur this spring or early summer. I hope I am wrong about how bad this will get.
 
I sure hope you all took advantage of tesla when the prices dropped to 330 per share now it up to 800. Also there is another stock that we should take notice as we are beginning to hit meat shortages is call Beyond Meat it is doing well. Look in to GM stock as well during the pandemic they have reported record truck sales due to the incentives they have offers on their trucks during this pandemic.
 
It will be interesting to see if the agent orange states will shutdown again if their hospitals become overwhelmed with coronavirus cases or will they just let people die in poor conditions as long as they go shopping, dining and getting their grooming on.

The stock market seems over inflated right now, the FEDS are doing everything they can to keep the market up. Hopefully a miracle will occur this spring or early summer. I hope I am wrong about how bad this will get.
You are not wrong
 
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