This weekend Barron's recommending buying select energy names.

Discussion in 'Stocks' started by ktgtrader, Aug 11, 2008.

  1. Brandonf

    Brandonf ET Sponsor

    They would think that. Somehow I'm having a hard time seeing this as the best buying opportunity in years, I mean all we have done is fallen back to the price levels of several MONTHS ago.
  2. Although I'm new to trading I think barrons is wrong
    BP and all those companies made millions because oil was sky rocketing up. The moment it goes down, the value of the company that owns the oil will go down
    am I making sense?
  3. You know why commodities are going down? because were about to have a global recession. No economy is going to be immune . I gurantee unemployment is going to take off in a very big way soon. The porblems in housing and banking are going to take down everything.
  4. Is that the reason why oil is down today even after the Russians destroyed a pipeline in Georgia?
  5. Yeah, I'm not sure. i try not to read to much into the news. More just the way the market responds to it. There are so many variables in trading the news. My trading plan constitutes, trading what I see and not a scenario that I construct. However, I bought Oil and commodity stocks when Oil double bottomed today. Which may have been a little early according to my plan, but that is just luck...kinda. Caught a good bounce. Getting out if we get close to 114.00 again.
  6. I didn't see your post about disagreeing with Barron's I kinda agree with you but probably for different reasons. I think that those stocks that he mentioned are very undervalued. I think the market, has them priced down because of the very low profit margins that they have. They make a ton of money at the pumps but, the amount of money it takes for them to produce, find, and develop is high. I may be wrong but that's what I have been thinking.
  7. No, you aren't making sense for the simple reason that the names that were mentioned in the Barron's article have huge "downstream" operations that will benefit from a drop in crude oil.

    Feel free to check the last earnings statement from XOM and take a look at the dramatic decline in their refining operations ( -54% ).

    XOM, CVX, COP, MRO, BP, etc. will all benefit from lower crude oil prices via their "downstream" refining operations.

    Furthermore, the "upstream" operations in XOM and CVX were hurt by lower production volumes AND the fact that as crude oil headed higher, these company's revenue-sharing splits with the likes of Russia and Venezuela actually declined.
  8. The majors aren't making anything at the pump. XOM is selling all 3000+ of their company owned stores in the U.S. because they can't compete with the discounters like Wal-Mart. They will let independent dealers try their luck at the business.

    Refiners will be helped by reduced oil prices, however.
  9. piezoe


    I am reminded that this is the same Barron's that urged us on their front page to go whole hog into GM as it edged ever nearer to bankruptcy in the face of mountains of unsold monster trucks and SUV's, steeply rising gas prices, and a long and deep recession. I think i'll get my recommendations elsewhere, thank you. :D
    #10     Aug 11, 2008