3 replies to this topic

[dasein]

some suitable washed out for a low risk long, although i expect oil stocks in general to come down after an exhaustive spike in the near future. any thoughts? thanks, Karen (recently in Riesling land)

[PorkLoin]

Hey Karen, I didn't see your post before I put up my chart. Friday was the main dividend day so now there's more money to add to positions or buy some of that Riesling. I agree that oil is vulnerable to price declines and that oil stocks are too. However, I also think that we have 4 or 5 months now that will feature relatively strong energy prices. There have indeed been some washouts, and for the medium term I think most lights are green in the sector. My strategy now is to go for the highest-quality, safest stuff, the ARCs, Peytos, NALs and so forth (even Enerplus if it would get back down to the bottom of its range). Peyto is a special case because of its focus on growth rather than paying high dividends, and because of its extreme low cost of production. It's still mainly NG though, and while over the coming years I love it, I may sell it should we rally into November. Overall, I'm not getting out of trusts, just looking to go heavier on oil and lighten up on natural gas. It's just a guess on my part that a few months from now will be a relatively good time to ease out of some NG stuff -- that "relatively strong" may just be going sideways, after all, or it might not even manage that. Last fall, after the Katrina rise and subsequent decline, was the last real "time to buy" that I saw or have seen. Still getting over 13% on my money and it's hard to give that up. Very long-term, I'm an energy bull. Not saying that oil won't be lower a year from now, though. Buying more right now would be with an eye to taking profits nearer the end of the year. More later -- I'm in a Hades-like period of intense travel and long hours for work, and much more travel for vacation starting Saturday. I'll put up the trusts traded on the NYSE, and some charts and comments as I have time. Best, Doug

[PorkLoin]

Karen, great call on the >>some suitable washed out for a low risk long<< -- in just over two weeks since you posted natural gas is up over 33%. SWEEET.

Don't know about a spike in oil prices. Certainly eminently possible, but there is also a serious uptrend in force and one thing I have learned is not to be over-eager in picking tops, if ever picking at all. This chart is logarithmic scaled. On a linear chart there is a similar nice upward bias and slightly increasing slope but nothing I'd call parabolic yet. If we go parabolic then I'm taking some money off the table but for now "all in." (I know this sounds simplistic.)

I'm watching for November -- thus far the anticipated move up in NG and strong energy prices overall deal is working better than expected. Hurricane season is here and the anniversary of last year's big NG price high comes in mid-December and let's just see what these bad boys (or girls) do. For the trusts, if they have a mind to, they've been able to fatten/upgrade their hedge books the past couple days. Well over $11 for Jan. 2007 and Jan. 2008 and well over $8 for July and August 2007, for example. Nice. There will be large profits and continuing or rising dividends from the well-managed trusts.

I was recently at the beach in southern Maine and southern Georgia and had Riesling (not to mention quite a slection of other things) at both places. If "slection" sounds like a guy slurring his words a bit, then that's probably the best way to leave it heh heh heh.

Best,


Doug

[dasein]

Doug, thanks for the update - I dont know how it will work with Lebanon, but the XLE/XOM look ready to head down from here. Those divs are nice... klh