Author Topic: What to do with Oil/Gas Stock?  (Read 28054 times)

therethere

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What to do with Oil/Gas Stock?
« on: December 09, 2015, 10:43:46 AM »
So, I have an old 401k account that is 100% (mega-corp oil and gas) stock. Yes, I know dumb. I bought everything in 2007-2009 when it was between $85-$100. Of course over the past two years this has tanked. Right now its only worth ~20k which is down from 30k about 18 months ago. It's gone down over 15% this year alone. I think its almost 25% if you count 2014. I really don't want to sell at this much of a loss. But it hurts to watch it continue to tank.

What should I be doing? Last year I was hoping it would rise again to a point I could rebalance.  But at this rate, that seems years away.

Should I hold on and just stop looking at it?
Should I rebalance even though its low?
Other options?

As an added note, I was never vested in the company match. However, the company match sits in my account until I roll it over I guess? I know that bulk is not mine. Bur, the gains on the bulk company match are vested to me. That part adds a little confusion. Which is why I never rolled it over into anything else. Right now this gains amount is only 2k due to the huge drop over the past 2 years.


WranglerBowman

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Re: What to do with Oil/Gas Stock?
« Reply #1 on: December 09, 2015, 01:37:21 PM »
I'm in a semi similar boat.  When oil hit $60 a barrel I started buying a fair amount of individual oil stocks, and bought all the way down to $43 a barrel as of recently (last month).  Now I've lost about 60% of my  total investment, in just a year!  I plan to just ride it out, but also sweating the fact that a lot of these smaller companies stocks I bought could very well go bankrupt.  I would imagine that many of the companies associated with your 401k are larger companies that have a better chance of recovering.  I would just ride it out at this point if I was you.

Keekster

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Re: What to do with Oil/Gas Stock?
« Reply #2 on: December 09, 2015, 01:37:39 PM »
My vote is to hold and stop looking at it.

Roboturner

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Re: What to do with Oil/Gas Stock?
« Reply #3 on: December 09, 2015, 01:41:00 PM »
My vote is to hold and stop looking at it.

+1 we will be back to $80-$100-$100+ oil eventually (within 10 years) oil market is cyclical, comes back eventually... as do all commodities

protostache

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Re: What to do with Oil/Gas Stock?
« Reply #4 on: December 09, 2015, 01:47:22 PM »
My vote is to hold and stop looking at it.

+1. You're looking at a very short window on the very long oil cycle.

One thing that might make you feel better is to look at how much those positions have pumped out in dividends, and how many more shares you have than you did before (assuming you've been automatically reinvesting).

use2betrix

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Re: What to do with Oil/Gas Stock?
« Reply #5 on: December 09, 2015, 04:22:06 PM »
Look at how low it is. It'd be the worse time to sell right. Hold onto it.

therethere

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Re: What to do with Oil/Gas Stock?
« Reply #6 on: December 09, 2015, 04:50:32 PM »
I know... I just need some encouragement. Due to the odd vesting, if the stock goes down 10% my balance actually goes down more than 10% so that isn't very fun to look at either. The worst to see gains in other accounts get wiped out by losses in this one.

Just sucks that I asked the same question about 18 months ago and I should have just rebalanced then. Of course I procrastinate and am lazy so nothing happened. Letting it continue to slide further.

adamwoods137

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Re: What to do with Oil/Gas Stock?
« Reply #7 on: December 09, 2015, 05:17:00 PM »
I know... I just need some encouragement. Due to the odd vesting, if the stock goes down 10% my balance actually goes down more than 10% so that isn't very fun to look at either. The worst to see gains in other accounts get wiped out by losses in this one.

Just sucks that I asked the same question about 18 months ago and I should have just rebalanced then. Of course I procrastinate and am lazy so nothing happened. Letting it continue to slide further.

Generally laziness is your best friend in the stock market. 

Retire-Canada

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Re: What to do with Oil/Gas Stock?
« Reply #8 on: December 09, 2015, 06:39:34 PM »
When I came up with my AA and investment plan I was faced with some oil/gas and mining investments that were not part of my new plan. They were both down and there was the temptation to wait it out for some unknown time in the hopes of a recovery.

Eventually I gave up on that idea and sold them. Took the $$ and invested according to my AA.

Not fun, but not having to think about those investments and hope for some future recovery was worth the short-term pain.

maizefolk

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Re: What to do with Oil/Gas Stock?
« Reply #9 on: December 09, 2015, 07:10:41 PM »
I really don't want to sell at this much of a loss. But it hurts to watch it continue to tank.

Emphasis mine.

When I first started moving money into the stock marker a few years ago I also put a lot of it into major oil and gas companies.* My approach has been to just stop checking in on the value of the individual stock portfolio I accumulated during that time frame and be grateful the oil price collapse taught me I wasn't the exception to the rule when it came to picking stocks before I went any further down the road of trying to beat the market.

*Based on the same logic, I also bought a chunk of SeaDrill. :-/ Unlike the big ones, they which may very well go belly up but even there at this point I figure the risk is already priced in so I'm even still holding onto it. Actually now that I'm thinking of it, I should probably check and make sure they're not ALREADY out of business once I get back to a country where google isn't blocked.

ColaMan

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Re: What to do with Oil/Gas Stock?
« Reply #10 on: December 09, 2015, 08:57:28 PM »
Is your stock one of the major integrated oil companies (like Exxon or Chevron)?  If so, I would definitely hold, as risk of bankruptcy is negligible, and there is possible longer-run benefit of being able to buy up assets of weaker companies on the cheap as oil continues to bottom out.  It's a 401k, so no tax loss harvesting benefit, and you should have a long term investment horizon.  Just ignore the balance (easier said that done, I know).

mrpercentage

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Re: What to do with Oil/Gas Stock?
« Reply #11 on: December 09, 2015, 10:50:00 PM »
As long as it is not all in one company I say keep buying and don't look. I do. I might be a fool though. 3/4 of my money isnt indexed in Vanguards tax scheming market robbery.

P0IS0N

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Re: What to do with Oil/Gas Stock?
« Reply #12 on: December 10, 2015, 04:33:15 AM »
As long as it is not all in one company I say keep buying and don't look.
Totally agree. I think this is the best time to buy, if there ever was one.

Seppia

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Re: What to do with Oil/Gas Stock?
« Reply #13 on: December 10, 2015, 06:27:18 AM »
If it's big companies like Exxon, Royal Dutch, etc, keep it and stop looking.
Selling at the lowest in years is exactly the opposite of what one should do.
I have kept buying on the way down, I have now stopped because I don't want to be too much overweight on oil but damn is it tempting.

protostache

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Re: What to do with Oil/Gas Stock?
« Reply #14 on: December 10, 2015, 07:18:59 AM »
If it's big companies like Exxon, Royal Dutch, etc, keep it and stop looking.
Selling at the lowest in years is exactly the opposite of what one should do.
I have kept buying on the way down, I have now stopped because I don't want to be too much overweight on oil but damn is it tempting.

This is my problem right now. That, and I can't add any more cash into the tax advantaged accounts this year, and so far that's the only place I'm buying individual issues.

therethere

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Re: What to do with Oil/Gas Stock?
« Reply #15 on: December 10, 2015, 08:37:41 AM »
Of course its all in one company. I was fresh out of school and all I knew was I should contribute to a 401k. I  knew nothing about the options or what I should choose. In all honesty I still don't and I'm getting to the point where I should learn more and develop a real strategy. It was during the boom so at the time stocks were going up 15-20% a year. I just set it to 100% one day and never though about it again. Luckily it is 100% in one of the major companies so bankruptcy is not what I'm worried about. I'm at least thankful that I put any money at all in!

I was more thinking along the lines if its worth re balancing due to the lag of the stocks going up again. I would expect another year of losses and maybe 2-3 where it is stagnant before it starts to go up again. I wasn't sure if I would be better off rebalancing now with something that will steadily go up over 5 years would be better off in the long run. But it is all speculation.

I now understand why everyone panics and sells when stocks tank. Its so emotional! I am contemplating the same thing even though I know the near-bottom is the worst time to sell.

Mr. Green

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Re: What to do with Oil/Gas Stock?
« Reply #16 on: December 10, 2015, 08:51:09 AM »
Definitely hold it. If I had some play money, an oil focused fund or a couple of the big player stocks would be an excellent buy right now.

presentvalue

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Re: What to do with Oil/Gas Stock?
« Reply #17 on: December 10, 2015, 12:11:00 PM »
I agree on holding for the foreseeable future. As long as you can withstand the volatility and wait for oil to rise again you should be fine. As another poster said if its larger companies like XOM then you are also benefiting from dividends to help mitigate losses while you wait for the oil correction.

alsoknownasDean

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Re: What to do with Oil/Gas Stock?
« Reply #18 on: December 11, 2015, 04:21:03 AM »
I bought a bunch of oil ETFs in June at $28.35. They're now $15.82. I'm actually thinking about buying more. :)

Retire-Canada

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Re: What to do with Oil/Gas Stock?
« Reply #19 on: December 14, 2015, 11:11:11 AM »
$35 barrel oil with no end to the dropping price in sight yet...

and....with the aggressive Paris climate accord goals we'll have to stop emitting any carbon in the next few decades which means a ton of pressure on oil and gas as the focus will have to shift to green tech.

If the big oil and gas companies can rapidly shift into green non-carbon energy tech they'll do well. Hopefully they are already making that happen.




sheepstache

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Re: What to do with Oil/Gas Stock?
« Reply #20 on: December 14, 2015, 11:21:00 AM »
If the value of your oil/gas stocks has gone down, why would you sell as part of rebalancing? Rebalancing in most cases would mean buying more of the assets that have gone down in value, selling off the assets that have gone up in value to pay for it. If you mean that you want to change your asset allocation to not be so weighted in this sector long term, just say that.

GuitarStv

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Re: What to do with Oil/Gas Stock?
« Reply #21 on: December 14, 2015, 11:23:59 AM »
$35 barrel oil with no end to the dropping price in sight yet...

and....with the aggressive Paris climate accord goals we'll have to stop emitting any carbon in the next few decades which means a ton of pressure on oil and gas as the focus will have to shift to green tech.

If the big oil and gas companies can rapidly shift into green non-carbon energy tech they'll do well. Hopefully they are already making that happen.


Yeeeeaaaahhh . . . I might just be a cynical bastard, but I'll believe anything said at a climate summit only when it actually happens.  I seem to remember a lot of lofty promises coming out of Kyoto too . . .

RichMoose

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Re: What to do with Oil/Gas Stock?
« Reply #22 on: December 14, 2015, 11:38:16 AM »
$35 barrel oil with no end to the dropping price in sight yet...

and....with the aggressive Paris climate accord goals we'll have to stop emitting any carbon in the next few decades which means a ton of pressure on oil and gas as the focus will have to shift to green tech.

If the big oil and gas companies can rapidly shift into green non-carbon energy tech they'll do well. Hopefully they are already making that happen.

I wouldn't believe a sniff of what's said at these climate conferences. It makes great headlines and no doubt pleases the Greenpeace / Sierra Club types. Meanwhile in the real world things keep chugging along as usual. With energy in North America cheaper than its been in more than a decade, consumption will only increase. We see this over and over...

Retire-Canada

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Re: What to do with Oil/Gas Stock?
« Reply #23 on: December 14, 2015, 11:47:28 AM »
While I wouldn't get wrapped around the axle about a specific target to the 3rd decimal place most of the planet recognizes that we can't keep dumping carbon into the atmosphere without significant consequences to human life.

We've ignored this issue in the past because it was easier to ignore.

mizzourah2006

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Re: What to do with Oil/Gas Stock?
« Reply #24 on: December 14, 2015, 03:32:50 PM »
My vote is to hold and stop looking at it.

agree, as long as you don't need it for a while. Oil, like all commodities is cyclical, with that comes volatility.

My Own Advisor

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Re: What to do with Oil/Gas Stock?
« Reply #25 on: December 14, 2015, 07:27:31 PM »
Hold.  It will come back.

Lesson learned, diversify more over time, across countries and sectors.  We've all been there.

Drifterrider

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Re: What to do with Oil/Gas Stock?
« Reply #26 on: December 15, 2015, 04:56:16 AM »
So, I have an old 401k account that is 100% (mega-corp oil and gas) stock. Yes, I know dumb. I bought everything in 2007-2009 when it was between $85-$100. Of course over the past two years this has tanked. Right now its only worth ~20k which is down from 30k about 18 months ago. It's gone down over 15% this year alone. I think its almost 25% if you count 2014. I really don't want to sell at this much of a loss. But it hurts to watch it continue to tank.

What should I be doing? Last year I was hoping it would rise again to a point I could rebalance.  But at this rate, that seems years away.

Should I hold on and just stop looking at it?
Should I rebalance even though its low?
Other options?

As an added note, I was never vested in the company match. However, the company match sits in my account until I roll it over I guess? I know that bulk is not mine. Bur, the gains on the bulk company match are vested to me. That part adds a little confusion. Which is why I never rolled it over into anything else. Right now this gains amount is only 2k due to the huge drop over the past 2 years.


That depends on how many years until you plan to draw against your 401K.

If you are already there you might consider cutting your losses but I don't think you are there; or even close.

All things are cyclical.  I hold shares of BP (outside a 401K).  I didn't buy any until after they sprang a leak.  I recently bought more when the price dropped below $30.  I'm poised to buy more as soon as I think it has hit bottom (and I don't think we are there yet).  I'm looking at the dividend rate instead of the price per share.  I'm not that far away from retirement and I'm still playing the long game. 

If the Saudis are trying to force some oil companies to go broke (and several news articles indicate this is so) it is only a matter of time before they have to stop (because they lose money as well).  They will then reverse the trend and the supply of oil will contract, forcing up prices. 

I'm playing the long game.  Stop lifting the Band-Aid and looking at the sore.  It will heal in time.

Proud Foot

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Re: What to do with Oil/Gas Stock?
« Reply #27 on: December 15, 2015, 09:55:23 AM »
I would stop looking at it.  If you are wanting to re-balance, just change your dividend preference so the dividends are no longer being reinvested in the stock and use them to start purchasing whatever you are wanting to re-balance to.

Retire-Canada

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Re: What to do with Oil/Gas Stock?
« Reply #28 on: December 15, 2015, 12:39:36 PM »

If the Saudis are trying to force some oil companies to go broke (and several news articles indicate this is so) it is only a matter of time before they have to stop (because they lose money as well).  They will then reverse the trend and the supply of oil will contract, forcing up prices. 

Except Iran is coming on line and it has said it will not hold back dumping oil into the already over supplied market and it's inevitable that green tech will eat into some of the energy demand that is currently being supplied by fossil fuels. Assuming oil will go back up in value to significantly higher rates because it has done that in the past is flawed logic given a number of novel factors that were not present in the past.

Jon_Snow

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Re: What to do with Oil/Gas Stock?
« Reply #29 on: December 15, 2015, 03:20:20 PM »
I've been picking away at a few HIGH QUALITY names in the past few months. I know it goes against our natural instincts...but smart purchases right now could really pay off in 3 or 4 years. Again, just make sure you do not buy companies that may in danger of going out of business if oil stays at $40 for the entirety of 2016. I personally think this is unlikely...but...if you have the "brass ones" to buy a bit right now...quality, quality, QUALITY. And no, I'm not personally recommending ANYTHING in this thread. ;)

Fireball

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Re: What to do with Oil/Gas Stock?
« Reply #30 on: December 15, 2015, 06:08:59 PM »
I've been picking away at a few HIGH QUALITY names in the past few months.

Yep, me too. Oil will stop falling due to natural market forces eventually, and then reality will set in that the world still uses oil with reckless abandon.  Once that happens - big upswing. These are commodities after all.

Ryan

Drifterrider

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Re: What to do with Oil/Gas Stock?
« Reply #31 on: December 16, 2015, 06:21:17 AM »

If the Saudis are trying to force some oil companies to go broke (and several news articles indicate this is so) it is only a matter of time before they have to stop (because they lose money as well).  They will then reverse the trend and the supply of oil will contract, forcing up prices. 

Except Iran is coming on line and it has said it will not hold back dumping oil into the already over supplied market and it's inevitable that green tech will eat into some of the energy demand that is currently being supplied by fossil fuels. Assuming oil will go back up in value to significantly higher rates because it has done that in the past is flawed logic given a number of novel factors that were not present in the past.

Oil will go up.  We will continue to use and pay for it until there is no more OR other technology is more efficient.  "Green" tech has a long way to go to catch up with oil.  Check back with me in ten years and you will see right I was.

Retire-Canada

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Re: What to do with Oil/Gas Stock?
« Reply #32 on: December 16, 2015, 06:56:28 AM »
Oil will go up.  We will continue to use and pay for it until there is no more OR other technology is more efficient.  "Green" tech has a long way to go to catch up with oil.  Check back with me in ten years and you will see right I was.

No argument we will keep using oil for decades. But, if the latest glut of oil has shown us one thing it's that over-supply or under demand is key to it's pricing.

Green tech doesn't have to replace oil anytime soon to keep prices down. All it has to do is erode demand enough to keep us in an oversupply situation.

Also keep in mind that the Paris accord means all the western countries will be taxing or capping carbon one way or another which will drive up the cost and keep a lid on demand.

The Saudis hoped to crush the marginal oil producers by lowering the price, but just like use of antibiotics or pesticides the result has been to teach the marginal producers who survived how to keep pumping at very low $$/barrel.

As long as we are in an over-supply situation anyone who wants to make a decent amount of money needs to produce and sell a high volume of oil which exacerbates the problem.

There are a few of the main oil producers with enough cash reserves to lower production for a significant amount of time to reign in the supply problem, but there are also many who are cash strapped and will have to keep pumping no matter what.

Living in Canada life would be better with $90/barrel oil, but I suspect the over-supply issue is not going away anytime soon if ever.
« Last Edit: December 16, 2015, 07:00:17 AM by Retire-Canada »

weather55

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Re: What to do with Oil/Gas Stock?
« Reply #33 on: December 17, 2015, 08:15:32 PM »
For someone wanting to gain exposure to energy at this point in time without picking one or two specific stocks, would you recommend an etf of oil companies or an oil etf tracking the commodity itself such as uso or oil?

Proud Foot

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Re: What to do with Oil/Gas Stock?
« Reply #34 on: December 18, 2015, 07:40:02 AM »
I would go into an energy/oil ETF before getting into an oil commodity ETF.  With an energy ETF you are getting all aspects of the oil production.  You're getting the drillers, the pipelines, and refineries.  With these you are also getting indirect exposure to the commodity pricing. Check out the holdings and composition of VDE. 

dungoofed

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Re: What to do with Oil/Gas Stock?
« Reply #35 on: December 18, 2015, 03:07:40 PM »
I agree with the "don't sell" crowd.

What I will add is that you should set a target price to get out of this stock, seeing as it's causing you so much distress this time around. Write it down as a part of your IPS, then when the stock reaches that price MAKE SURE YOU SELL IT. Easier said than done because it'll no doubt be on a tear and people around you will be like "wtf why would you be selling the best company in the SP500?!" Include a link to this thread in your IPS.

Drifterrider

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Re: What to do with Oil/Gas Stock?
« Reply #36 on: December 21, 2015, 06:39:24 AM »
Oil will go up.  We will continue to use and pay for it until there is no more OR other technology is more efficient.  "Green" tech has a long way to go to catch up with oil.  Check back with me in ten years and you will see right I was.

Living in Canada life would be better with $90/barrel oil, but I suspect the over-supply issue is not going away anytime soon if ever.

Has the cost gone down in Canada?  I know the gas was roughly double the US average in 2010 and yes, I know there is a lot of tax built into that.  Wouldn't Canadians (still in Canada not Florida) be better off with lower crude cost as we are in Winter and it gets K O L D up there?

GuitarStv

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Re: What to do with Oil/Gas Stock?
« Reply #37 on: December 21, 2015, 07:05:09 AM »
The previous Canadian government worked very hard to tie our economy to oil when it was booming.  Now that it's not paying out any more we're suffering from an awful lot of devaluation of the dollar.  It's worse out west in Alberta of course, but the damage is felt across the country.

Drifterrider

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Re: What to do with Oil/Gas Stock?
« Reply #38 on: December 21, 2015, 11:36:13 AM »
Is your oil "owned" by the government or is it private enterprise?

GuitarStv

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Re: What to do with Oil/Gas Stock?
« Reply #39 on: December 21, 2015, 11:54:46 AM »
Private.

Leftside

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Re: What to do with Oil/Gas Stock?
« Reply #40 on: December 21, 2015, 02:00:15 PM »
Most of you guys are talking about buying oil company stock like Exxon (XOM) & Shell (RDSA) correct?  I was thinking of picking some of these companies up as a fun test.

Has anyone here actually purchased crude or futures on crude oil?  I am a rookie in this sense, and I have no idea what I am doing when looking to purchase.  What symbols do I look up?

protostache

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Re: What to do with Oil/Gas Stock?
« Reply #41 on: December 21, 2015, 02:20:22 PM »
Most of you guys are talking about buying oil company stock like Exxon (XOM) & Shell (RDSA) correct?  I was thinking of picking some of these companies up as a fun test.

Has anyone here actually purchased crude or futures on crude oil?  I am a rookie in this sense, and I have no idea what I am doing when looking to purchase.  What symbols do I look up?

That's what I'm talking about, yes (although you probably want RDS.B instead of RDS.A).

If you want to look it up, the most popular oil ETF is USO. I wouldn't recommend actually buying into oil ETFs or futures contracts because of the horrible contango that's happening right now. Wikipedia has a neat chart on how contango works.

use2betrix

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Re: What to do with Oil/Gas Stock?
« Reply #42 on: December 21, 2015, 05:00:53 PM »
Most of you guys are talking about buying oil company stock like Exxon (XOM) & Shell (RDSA) correct?  I was thinking of picking some of these companies up as a fun test.

Has anyone here actually purchased crude or futures on crude oil?  I am a rookie in this sense, and I have no idea what I am doing when looking to purchase.  What symbols do I look up?

I put a small chunk into Shell, BP, and Conoco, like you mentioned. Just kind of as a fun test. Hindsight I would have picked Exxon instead of Conoco.

Drifterrider

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Re: What to do with Oil/Gas Stock?
« Reply #43 on: December 22, 2015, 06:39:40 AM »
What are the dividend rates of the two?  BP is showing a dividend rate of nearly 8%. 

Are you buying as a dividend stock (I am) or for the capital gains?

protostache

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Re: What to do with Oil/Gas Stock?
« Reply #44 on: December 22, 2015, 07:07:56 AM »
What are the dividend rates of the two?  BP is showing a dividend rate of nearly 8%. 

Are you buying as a dividend stock (I am) or for the capital gains?

Both. I care about maximizing long term diversified total return. The positions in oil majors that I've picked up are going to stay in our family at least until I pass away and very probably longer. Along the way they'll generate lots of cash dividends. For now, those cash dividends are being automatically reinvested, but once they throw off enough to make brokerage fees less than 20 basis points I'll probably turn that off and re-allocate by hand.

Jack

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Re: What to do with Oil/Gas Stock?
« Reply #45 on: December 22, 2015, 10:40:56 AM »
If you believe the sector is fundamentally a good investment (because "oil is cyclical"), hold or buy more. If you believe the sector is no longer a good investment (because the Paris accord / green tech will keep eroding demand), sell.

Of course its all in one company.

Assuming you picked the first option above, diversifying within the sector (i.e., to other companies with equally-depressed valuation, or to a sector ETF) should allow you to reduce risk without locking in any significant losses. (Right?)

use2betrix

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Re: What to do with Oil/Gas Stock?
« Reply #46 on: December 22, 2015, 04:28:21 PM »
If you believe the sector is fundamentally a good investment (because "oil is cyclical"), hold or buy more. If you believe the sector is no longer a good investment (because the Paris accord / green tech will keep eroding demand), sell.

Of course its all in one company.

Assuming you picked the first option above, diversifying within the sector (i.e., to other companies with equally-depressed valuation, or to a sector ETF) should allow you to reduce risk without locking in any significant losses. (Right?)

While I believe the Paris accord, I am very positive that everything in Paris isn't going to create some new technology right this minute or year or decade to replace oil. For a 50 year timeline? Maybe.. But I feel oil will have a few more up and down cycles before it really starts getting replaced.

bdbrooks

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Re: What to do with Oil/Gas Stock?
« Reply #47 on: December 24, 2015, 10:40:50 AM »
You can do what you want, but I would buy. I don't think current prices are sustainable. Even Saudi is feeling the hurt of low oil prices, even though they have enough reserves to survive for about 4 more years. I know it is an old 401(k), and you can't contribute any more. However, you could direct current contributions into oil investments.

There is a significant only buy and hold group here (specifically most of them believe you should only buy the cheapest and broadest market cap weighted index funds). If you are one of those types then it would probably be more logical to sell and diversify. If you are ok with taking with investing in something that you think has good growth potential or that is undervalued, then I would actually be buying more (although proabably a diversified oil company etf fund).

I'm looking at the dividend rate instead of the price per share.

This is a somewhat dangerous strategy since most oil companies are suspending dividends. Even the bigger players could be subject to at least decreasing the dividend. I think there are better ways to evaluate oil and gas companies.

Drifterrider

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Re: What to do with Oil/Gas Stock?
« Reply #48 on: January 06, 2016, 06:55:09 AM »
"Even the bigger players could be subject to at least decreasing the dividend"

Yep, they could be but haven't yet.  BP is currently paying at just under 8%.  My bank is paying less than 0.5%. 

I'm buying more BP stock.  We are not going to stop using oil until we exhaust it.  If the scenario changes, I'll change my strategy.

Retire-Canada

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Re: What to do with Oil/Gas Stock?
« Reply #49 on: January 06, 2016, 07:07:25 AM »

I'm buying more BP stock.  We are not going to stop using oil until we exhaust it.  If the scenario changes, I'll change my strategy.

Sorry, but this shows a poor grasp of supply and demand on oil/gas price. We can pump just as much oil out of the ground for the next 50 yrs and if the supply side stays high vs. demand it will mean continued low prices. No company or oil producing country can keep pumping cheap oil for 10-20yrs without a change to the way they do business.

http://www.cbc.ca/news/business/goldman-sachs-oil-1.3223993

Given all the downward pressure on the demand side of the equation and all the reasons why suppliers can't or won't reduce production I have not heard a cogent argument for how we are going to go back towards a situation where prices can rise appreciably.

If you or anyone has got an explanation I'd love to hear it, but it better be something other than we are gonna keep using oil.