Author Topic: Transocean (RIG) cut my losses or hold?  (Read 1890 times)

panda

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Transocean (RIG) cut my losses or hold?
« on: June 14, 2017, 09:13:36 AM »
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« Last Edit: December 15, 2017, 10:15:09 AM by panda »

dandarc

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Re: Transocean (RIG) cut my losses or hold?
« Reply #1 on: June 14, 2017, 09:28:09 AM »
Basic advice is sell and put it into the index fund.  If you wouldn't sell VTI today to buy RIG, why would you continue to hold RIG?

Suppose there may be some value to taking the loss once your income is up, but $1,000 of losses isn't going to swing the needle much regardless.

How much is the RIG position worth?

dandarc

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Re: Transocean (RIG) cut my losses or hold?
« Reply #2 on: June 14, 2017, 09:57:20 AM »
Only $200 - options:

1.  Not worth worrying about -sell and buy your index fund.  Simplify life.

2.  Not worth worrying about - low cost gamble.  If it comes back, you'll make a ton relative to your risk.  Even if it goes to zero, its only $200.

So basically no bad choices.

jjcamembert

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Re: Transocean (RIG) cut my losses or hold?
« Reply #3 on: June 14, 2017, 03:25:22 PM »
I'd wait until it goes up or you want to offset some capital gains in other investments. You're only risking $200 at this point, but it's worth $1000 for capital gains purposes. Versus putting another $200 into VTI, let's say you make 8%, woo you made $16. Not a very significant opportunity cost.

Looks like RIG is basically a long oil position, and oil is getting near lows for the year. I'd hold until oil prices go up.

Car Jack

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Re: Transocean (RIG) cut my losses or hold?
« Reply #4 on: June 14, 2017, 05:44:59 PM »
I'd sell for VTI.  As I was reading the OP, I was saying to myself "VTI" before getting to the end.  You know it's the thing to do, right?

Ben Hogan

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Re: Transocean (RIG) cut my losses or hold?
« Reply #5 on: June 15, 2017, 06:58:52 AM »
Most analysts thinks there is a rebound for oil coming, and alot of sentiment is to buy now, but it's a matter of how much time do you have to wait. I'm in for the long haul on oil, so I'm ok with more bleeding for the next year or two.

acanthurus

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Re: Transocean (RIG) cut my losses or hold?
« Reply #6 on: June 15, 2017, 03:52:30 PM »
I worked for a very large oil services company. I wouldn't touch Transocean with a barge pole. Nobody has any idea what commodity prices will be, a "rebound" is not garaunteed to ever happen, nobody knows nuttin. Deepwater/GOM is dead as it can be. Look how fucked SDRL is, not even the bond holders are guaranteed to make it out. RIG is in better shape but even if prices rebound, it ain't gonna be the good old days again.

If you really, truly believe that oil prices will recover somewhat and that offshore will come along with it, I'd play something like Carbo Ceramics (CRR). It's a frac sand company that makes ultra-high-pressure ceramic proppants used in offshore. Stock has tanked from something like $150 down to $5, but they have a smaller traditional frac sand side that might pick up business with the NA land market as all the DUC wells that were done over the last two years start to get fracked. I'll straight up admit the 10Qs look terrible, but that's what you'd expect when people drill wells but don't frac them for a few years. So they have that traditional frac sand side of the business that might bouy them a little with the NA land market, and if the offshore market's needs for proppants go up they could rocket with their significantly better product vs competitors for high pressure wells. Much more speculative but honestly I would rather take the loss on Transocean, write it off on my taxes, and throw the remaining $200 at something with much much more upside if the offshore market comes back.

Also I think some nat gas companies are fucked. Some ITM puts on SWN would be a reasonably fun way to play it. The assets they bought off CHK up in the Marcellus are total crap they way overpaid for and their balance sheet is trash. Really bad miscalculation to make with prices so low and unless nat gas comes back strong not sure they'll do well at all.
« Last Edit: June 15, 2017, 04:07:44 PM by acanthurus »