What Are People Doing with their Oil and Natural Gas Stocks

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MrCheapo
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What Are People Doing with their Oil and Natural Gas Stocks

Post by MrCheapo »

So like a lot of people I picked up oil and natural gas stocks (for the purpose of this discussion lets treat them separately) at a great discount last year when oil was negatively priced and the HH pricing of NG was under $2.

Fastfoward a year and WTI is now approaching $70 and NG in the middle of summer is well above $3! Of course energy stocks have trading up immensely.

So what are people doing? What's your end game? Supercycle in energies or not?

My situation is that these are stocks "in addition" to my core investments for retirement so:

a) For MLP stocks I'm going to let them ride and collect the dividends.
b) For upstream oil producers I'm waiting until they get within 30% of 2015 peak pricing (top of the last super-cycle) and then selling. I see oil as playing an important but diminishing role in the US's future economy.
c) For pipeline and natural gas companies I'm holding for the long term as I see fewer pipelines been built and NG increasing in usage.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by LadyGeek »

This thread is now in the Investing - Theory, News & General forum (general discussion).
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by btenny »

I have owned Exxon Mobile stock since 1980. The dividends helped me put my kids through college. The stock now pays me more dividends per year than I paid for the stock. I have purchased more stock twice when the stock went on sale. The added stock I bought last year is up 50%. I am not sure I will ever sell any. But I am sure that climate change is affecting this business big time and may reduce company value in the future.

I used to own some MLP stock but the CEO converted the company from a REIT to a standard stock company without any stockholder vote or advance warning. This screwed me and all the stock holders and gave all of us big tax problems. The new company stock price crashed and we all suffered a significant capital loss from the REIT price. I will never own a MLP again.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by LadyGeek »

Acronym decoder:

MLP = Master limited partnership
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Random Poster »

I have a few shares of stock in my ex-employer’s company (an E&P company that used to be a lot larger).

It is my only individual stock holding, as everything else is in index funds, and amounts to less than 1/2 of a percent of my net worth.

I am keeping these shares for only three reasons:

1) To be able to keep voting against the Board and CEO;

2) To keep receiving a tiny dividend, as a continued severance payment of sorts; and

3) In hopes that the company gets bought out and I make a bit of money off of the shares.

That’s it. I would never own individual stocks otherwise, oil company or not.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by arcticpineapplecorp. »

btenny wrote: Tue Jun 01, 2021 11:15 am I have owned Exxon Mobile stock since 1980. The dividends helped me put my kids through college. The stock now pays me more dividends per year than I paid for the stock. I have purchased more stock twice when the stock went on sale. The added stock I bought last year is up 50%. I am not sure I will ever sell any. But I am sure that climate change is affecting this business big time and may reduce company value in the future.

I used to own some MLP stock but the CEO converted the company from a REIT to a standard stock company without any stockholder vote or advance warning. This screwed me and all the stock holders and gave all of us big tax problems. The new company stock price crashed and we all suffered a significant capital loss from the REIT price. I will never own a MLP again.
that's too bad.

since 1980 had you owned the S&P500 (vtsax didn't exist until 1992) you'd have done better, in fact you would have done about twice as well as Exxon with far less risk:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

portfolio visualizer only goes back to 1985 but shows exxon had lower return, lower risk adjusted return, higher standard deviation, worst max drawdown:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
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MrCheapo
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by MrCheapo »

Interesting. Does that include reinvesting dividends? Does it also include him/her buying at a premium discount. It seems they bought several times when the stock tanked.
arcticpineapplecorp. wrote: Tue Jun 01, 2021 2:06 pm
btenny wrote: Tue Jun 01, 2021 11:15 am I have owned Exxon Mobile stock since 1980. The dividends helped me put my kids through college. The stock now pays me more dividends per year than I paid for the stock. I have purchased more stock twice when the stock went on sale. The added stock I bought last year is up 50%. I am not sure I will ever sell any. But I am sure that climate change is affecting this business big time and may reduce company value in the future.

I used to own some MLP stock but the CEO converted the company from a REIT to a standard stock company without any stockholder vote or advance warning. This screwed me and all the stock holders and gave all of us big tax problems. The new company stock price crashed and we all suffered a significant capital loss from the REIT price. I will never own a MLP again.
that's too bad.

since 1980 had you owned the S&P500 (vtsax didn't exist until 1992) you'd have done better, in fact you would have done about twice as well as Exxon with far less risk:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

portfolio visualizer only goes back to 1985 but shows exxon had lower return, lower risk adjusted return, higher standard deviation, worst max drawdown:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
Cautionary Tale
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Cautionary Tale »

Couldn't resist selling a few shares of my xle today (bought January 2015). I have hated this fund since I was talked into purchasing it by my advisor.
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MrCheapo
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by MrCheapo »

btenny wrote: Tue Jun 01, 2021 11:15 am I have owned Exxon Mobile stock since 1980. The dividends helped me put my kids through college. The stock now pays me more dividends per year than I paid for the stock. I have purchased more stock twice when the stock went on sale. The added stock I bought last year is up 50%. I am not sure I will ever sell any. But I am sure that climate change is affecting this business big time and may reduce company value in the future.

I used to own some MLP stock but the CEO converted the company from a REIT to a standard stock company without any stockholder vote or advance warning. This screwed me and all the stock holders and gave all of us big tax problems. The new company stock price crashed and we all suffered a significant capital loss from the REIT price. I will never own a MLP again.
Thanks for sharing. I bought Exxon, Chevron, BP, Shell etc all at 50% discount to their current prices. If I was sure they'd be around 40 years like (mirroring your situation) I'd have no trouble holding them. But the huge push for EVs has me concerned that the days of oil producers are limited and I should take profits now.

Just yesterday the administration floated resetting to zero, Tesla and Nissan's $7500 tax rebate allotment and increasing it to $12,500 if the car is made in a union US facility. If you make one type of car $12,500 cheaper than another then its hard to see the competitors being bought.

Thanks

P.S. I don't want this discussion to turn political, but clearly a major issue with owning oil producers (at least) is the current political push for EVs.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by alfaspider »

I own E&P stock through RSUs. Because of the huge volatility, I decided a few years ago to DCA out of vested stock rather than sell everything on vesting day. Of course, the unvested stock that I "own" I must hold. I'm sort of involuntarily overweight on oil.

The biggest gains likely are already in. Congrats to those who purchased back in April of last year. Some of them have tripled their money or more. But I think we could still see another double from large cap E&Ps over the next year. Many still haven't fully recovered to 2019 share prices, even though oil prices are above 2019 prices. The biggest difference between then is many investors are convinced that the end of oil is nigh and that the oil business is on borrowed time.

I agree that oil's importance will decline in the coming decades, but I also think that we have a fairly massive upside setup in the short to medium from the historically low investment in the space over the last 6 years (since the late 2014 oil price crash). It's an interesting question how quickly the EV tipping point comes relative to oil demand (i.e. when EV adoption is so widespread that gasoline demand starts to decline rapidly). I think the EV tipping point will happen fairly soon, but we are a decade out before it really starts to hit oil demand hard. Fleet turnover takes time, and we are 5-7 years out before EVs start to become the mainstays of manufacturer lineups. Because the oil business sees decreasing demand on the horizon in the long term, there's a lot of resistance towards beginning long-cycle projects that might take another 5 years to come to fruition. Therefore, we could see high prices until demand starts coming down. The other X-factor is developing world demand. The switch to electrification will be much tougher in places where the electric grids aren't reliable.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by arcticpineapplecorp. »

MrCheapo wrote: Tue Jun 01, 2021 3:14 pm Interesting. Does that include reinvesting dividends? Does it also include him/her buying at a premium discount. It seems they bought several times when the stock tanked.
arcticpineapplecorp. wrote: Tue Jun 01, 2021 2:06 pm
btenny wrote: Tue Jun 01, 2021 11:15 am I have owned Exxon Mobile stock since 1980. The dividends helped me put my kids through college. The stock now pays me more dividends per year than I paid for the stock. I have purchased more stock twice when the stock went on sale. The added stock I bought last year is up 50%. I am not sure I will ever sell any. But I am sure that climate change is affecting this business big time and may reduce company value in the future.

I used to own some MLP stock but the CEO converted the company from a REIT to a standard stock company without any stockholder vote or advance warning. This screwed me and all the stock holders and gave all of us big tax problems. The new company stock price crashed and we all suffered a significant capital loss from the REIT price. I will never own a MLP again.
that's too bad.

since 1980 had you owned the S&P500 (vtsax didn't exist until 1992) you'd have done better, in fact you would have done about twice as well as Exxon with far less risk:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

portfolio visualizer only goes back to 1985 but shows exxon had lower return, lower risk adjusted return, higher standard deviation, worst max drawdown:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
1. yes it includes reinvestment of dividends
2. no it doesn't include buying at a discount, but presumably you'd have had the alternate option of having bought the S&P500 at those times instead of exxon.

also, on the chart it doesn't appear there were many dips in exxon until 2007-2018 but even then it's not like you'd have bought on the dips and then exxon rose. It didn't. exxon was essentially flat over those 11 years and then went DOWN between 2019-2020 so you wouldn't have benefited from buying on the dips because exxon would have had to go up, not down.

S&P500 had a long and steady climb so you would have been getting appreciation of your purchases over time buying at lower prices that then went higher later on (2000-2002 and 2007-2009 being the exception, but those would have also presented opportunities).

Also whatever outperformance exxon had over S&P500 starting in 2002 gave it up entirely by 2018.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by jebmke »

I dumped Chevron (inherited) into our donor advised fund a few years ago at ~ 120. What is it now?
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by RickBoglehead »

I believe that many people see a difference between a stock that gives off a dividend and a mutual fund that doesn't, and don't realize that they can sell shares of the mutual fund and create a "dividend" if they need money.

I had a relative that hung on to way too much oil holdings for way too long, focusing on "I bought it for $5".
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by BanquetBeer »

MrCheapo wrote: Tue Jun 01, 2021 3:21 pm Just yesterday the administration floated resetting to zero, Tesla and Nissan's $7500 tax rebate allotment and increasing it to $12,500 if the car is made in a union US facility. If you make one type of car $12,500 cheaper than another then its hard to see the competitors being bought.

Thanks

P.S. I don't want this discussion to turn political, but clearly a major issue with owning oil producers (at least) is the current political push for EVs.
My understanding is the Tesla and GM currently are out of this program ($0) but this would reset it for everyone. Tesla would be eligible for $10k (because they are not made by union employees) but from my perspective, I can buy a Corolla for $20k Or a Tesla model 3 for $40k-10k (currently proposed credit) - so it won’t be cheaper to go EV vs gas, and I believe that is the basis for the subsidy.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Barsoom »

My oil holdings fell 50% during the pandemic, but they've regained all but 10% in value. However, the dividend never stopped, which pays for 50% of my expenses.

To answer your question, I plan to hold my oil stock until it regains its pre-pandemic value and wait a little more to see if it breaks out in a post-lockdown economic boom. At that point I plan to divest into my diversified portfolio and replace the lost dividend with capital gains.

-B
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by galawdawg »

I have no idea what is going on with whatever interest I have in oil and natural gas stocks....they are included in my VTSAX holdings! :wink:
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by jebmke »

Barsoom wrote: Tue Jun 01, 2021 4:31 pm My oil holdings fell 50% during the pandemic, but they've regained all but 10% in value. However, the dividend never stopped, which pays for 50% of my expenses.

To answer your question, I plan to hold my oil stock until it regains its pre-pandemic value and wait a little more to see if it breaks out in a post-lockdown economic boom. At that point I plan to divest into my diversified portfolio and replace the lost dividend with capital gains.

-B
So you are expecting O & G to beat the portfolio for a while.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Barsoom »

arcticpineapplecorp. wrote: Tue Jun 01, 2021 4:01 pm 2. no it doesn't include buying at a discount, but presumably you'd have had the alternate option of having bought the S&P500 at those times instead of exxon.
In my case (not Exxon but similar), it includes generous company match, which was not transferrable to the general stock market at the time.

-B
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Barsoom »

jebmke wrote: Tue Jun 01, 2021 4:34 pm
Barsoom wrote: Tue Jun 01, 2021 4:31 pm My oil holdings fell 50% during the pandemic, but they've regained all but 10% in value. However, the dividend never stopped, which pays for 50% of my expenses.

To answer your question, I plan to hold my oil stock until it regains its pre-pandemic value and wait a little more to see if it breaks out in a post-lockdown economic boom. At that point I plan to divest into my diversified portfolio and replace the lost dividend with capital gains.

-B
So you are expecting O & G to beat the portfolio for a while.
Since I have a large stake, I'm waiting for it to recover to the point it was at when I retired in 2019. I'm hoping that the Energy sector sees a higher return in 2021-2022 than the broad market as the economy recovers (due to the energy involved in restarting), but I don't expect it to be a long-term trend. Maybe it's just a bounce.

I'm comparing it to the surge in lumber as housing got squeezed, and the surge in demand for microchips and its effects on the auto and tech sectors. These higher prices were a function of a one-off surge in demand as a result of stay-at-home and urban flight during the pandemic. These sectors are going to fall back in line as supply and demand fall back in line with each other, but as the economy reopens I believe that oil and gas will see its turn to see short-term imbalance followed by re-stabilization.

-B
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by MrCheapo »

Thank you for sharing your insider perspective.

Kudos for people for trying to fight climate change, but I can't help but thinking that grid charged EVs are not going to have such impact on oil and won't be more than 20% of total cars on the road unless things change a lot. There are just too many inconveniences and issues on the demand side (an at-home 240V charger means charging *only* takes 6 hours!) and supply side (as you say what happens on hot days when Googles servers, A/C are drawing on the grid)?

I just can't understand why alternatives like Toyota's hydrogen driven EV, the Mira, (the hydrogen fuels cell on board generates the charge) aren't embraced more.

But I could be wrong which is why I'm in two minds to take profits now or hold on.
alfaspider wrote: Tue Jun 01, 2021 3:30 pm I own E&P stock through RSUs. Because of the huge volatility, I decided a few years ago to DCA out of vested stock rather than sell everything on vesting day. Of course, the unvested stock that I "own" I must hold. I'm sort of involuntarily overweight on oil.

The biggest gains likely are already in. Congrats to those who purchased back in April of last year. Some of them have tripled their money or more. But I think we could still see another double from large cap E&Ps over the next year. Many still haven't fully recovered to 2019 share prices, even though oil prices are above 2019 prices. The biggest difference between then is many investors are convinced that the end of oil is nigh and that the oil business is on borrowed time.

I agree that oil's importance will decline in the coming decades, but I also think that we have a fairly massive upside setup in the short to medium from the historically low investment in the space over the last 6 years (since the late 2014 oil price crash). It's an interesting question how quickly the EV tipping point comes relative to oil demand (i.e. when EV adoption is so widespread that gasoline demand starts to decline rapidly). I think the EV tipping point will happen fairly soon, but we are a decade out before it really starts to hit oil demand hard. Fleet turnover takes time, and we are 5-7 years out before EVs start to become the mainstays of manufacturer lineups. Because the oil business sees decreasing demand on the horizon in the long term, there's a lot of resistance towards beginning long-cycle projects that might take another 5 years to come to fruition. Therefore, we could see high prices until demand starts coming down. The other X-factor is developing world demand. The switch to electrification will be much tougher in places where the electric grids aren't reliable.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by jdamo »

Where do people think all this energy will come from to replace oil and gas?
People seem to be caught up in a renewable "buzz" because they are told "we must do this"...

Oil and gas demand is projected to grow and not flatten (or still grow more slowly even)until 2040. Particularly in India and Far East.
Projections show the world will need a lot of energy in future years with ~2%/year growth predicted to 2040...it could be higher growth per year.
Where do people who are embracing EVs think all this electricity will come from? And will the grid work as mentioned?
From what I have seen and read, all the windmills and solar panels will only make about 20% of energy req'd by 2040.
Further, heavy metals req'd for batteries are in limited supply. Plus where /how to dispose of the batteries at end of life?
Therefore, I believe ExxonMobil has a key role to play in providing energy to the world for more than 20-30 years to come!
They will transition to whatever energy source is needed in future years based on real science.
(Full disclosure, I worked for ExxonMobil for 38 years as an engineer and own a lot of their stock. They plan and study problems very thoroughly with real science!)
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Re: What Are People Doing with their Oil and Natural Gas Stocks

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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by MarkBarb »

I own some of each of the significant oil and gas stocks. I own each in proportion to their market cap. To hedge my bets, I've taken the same strategy with major oil and gas consumers like airlines and chemical companies and with things like EV makers and renewable energy producers. I found a fund that does all this for me and is super cheap and easy. It gives me higher average returns than people get by picking specific stocks and sectors and doesn't require me to try to predict the future.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Blueskies123 »

Generation of electricity using natural gas with highly efficient $100 million turbines and delivering it through a smart gride to a house and then a new electric car is much more efficient than delivering gasoline to gas stations and then burning gasoline in internal combustion cars, many of them often very old, leaking and smoking cars and trucks.
Soon, in my opinion, you will see oil demand start to slump, (but not natural gas).
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by RyeBourbon »

I've owned CVX for 30 years. Sold it off in Q1 at $111.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by gch »

I think the best long term play (as you mentioned) is NG pipelines. As renewables start making up more of the electric supply, NG will become even more volatile. Companies with those NG assets will be able to capitalize on that volatility. Case in point go look at Kinder Morgan and Energy Transfers Q1 profits from Winter Storm Uri.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by HomerJ »

I did schedule K1 taxes once.

Once.

(with apologies to Joe Piscopo)
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Exchme »

jdamo wrote: Tue Jun 01, 2021 8:03 pm Therefore, I believe ExxonMobil has a key role to play in providing energy to the world for more than 20-30 years to come!
While I wouldn't invest in any individual stock, if I had to invest in the energy sector, it would be with ExxonMobil. The firm I worked for saw all the majors and ExxonMobil managed the tightest ship, demanding data, feedback and improvement from everyone. The rest of the industry didn't really compare.
MrCheapo wrote: Tue Jun 01, 2021 5:47 pm I just can't understand why alternatives like Toyota's hydrogen driven EV, the Mira, (the hydrogen fuels cell on board generates the charge) aren't embraced more.
Hydrogen at best plays the role of a battery, since hydrogen doesn't occur naturally on earth. If you have solar or wind doing electrolysis, the fuel is ruinously expensive before it ever gets to your car. Large quantities of hydrogen is made every day from natural gas, but that's obviously not a renewable. Hydrogen can't generally be put in current pipelines, you need different grades of steel, so transporting it around the country would be massively expensive. Hydrogen has low energy density and requires high pressure and therefore heavy containers to hold it or more moderate pressures and an expensive pack full of high tech stuff to adsorb and desorb it. After adding in the fuel cell, is there a space/weight/cost savings vs a battery?
In a wreck, leaked hydrogen will inevitably catch fire and hydrogen fires are nasty - essentially invisible.

There is big money to be made for someone that comes up with something practical, but naturally occurring hydrocarbons have really huge advantages -
high energy density, high fueling rates, manageable risks to consumers for storage and use, huge existing infrastructure, high reliability, plentiful supplies at reasonable prices. Before retirement I was in position to see a few renewable schemes promoters were bringing in and they varied between extraordinarily expensive and completely fanciful with multiple technical and commercial gaps. Mankind will figure something out eventually, but it will be via the usual method of a few percent progress each year for decades.

One thing I have not seen much discussion about in years is gasoline powered fuel cells. My recollection was that if gasoline was more completely desulfurized (easy enough to do), then fuel cells could use gasoline to make electricity and deliver a better overall efficiency than internal combustion engines, but I have not seen any big money pursuing that as a transition technology.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by jello_nailer »

So, mid 2020 DW suggested they might sell MRO and MPC, old long time holding in FIL portfolio. I suggested the best strategy is too buy low and sell high, not the other way around. MRO is up 300% since then, MPC is up 200%+

I need to take my small wins when I can get them.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by learntoinvest123 »

I had 7% of my portfolio in Oil and Gas mostly bought in 2019. I have slowly sold them down, and still hold 3%.

Real test of O&G sector will be in 3-4 years. If transition to EVs is real, then this sector will be in secular decline. Large part of crude demand is from gasoline and once that demand start to fall, oil prices should start to fall.

In the near term I expect a spike due to lower investment and high demand. I will sell down the rest slowly when there are big jumps. I am picking up some green energy and utility stocks on dips. In the next few decades, these could become the new "oil" stocks.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by valleyrock »

jdamo wrote: Tue Jun 01, 2021 8:03 pm Where do people think all this energy will come from to replace oil and gas?
People seem to be caught up in a renewable "buzz" because they are told "we must do this"...

Oil and gas demand is projected to grow and not flatten (or still grow more slowly even)until 2040. Particularly in India and Far East.
Projections show the world will need a lot of energy in future years with ~2%/year growth predicted to 2040...it could be higher growth per year.
Where do people who are embracing EVs think all this electricity will come from? And will the grid work as mentioned?
From what I have seen and read, all the windmills and solar panels will only make about 20% of energy req'd by 2040.
Further, heavy metals req'd for batteries are in limited supply. Plus where /how to dispose of the batteries at end of life?
Therefore, I believe ExxonMobil has a key role to play in providing energy to the world for more than 20-30 years to come!
They will transition to whatever energy source is needed in future years based on real science.
(Full disclosure, I worked for ExxonMobil for 38 years as an engineer and own a lot of their stock. They plan and study problems very thoroughly with real science!)
There's a lot of excess electrical energy available at night to charge electric vehicles. Electrical generating stations sometimes idle at night, but still they are on and giving off energy as waste heat. On the other hand, once those hyperloops get built, we won't need EVs. On the other hand, maybe we need to invest more in public transportation instead of more cars, EVs or not.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by alfaspider »

MrCheapo wrote: Tue Jun 01, 2021 5:47 pm Thank you for sharing your insider perspective.

Kudos for people for trying to fight climate change, but I can't help but thinking that grid charged EVs are not going to have such impact on oil and won't be more than 20% of total cars on the road unless things change a lot. There are just too many inconveniences and issues on the demand side (an at-home 240V charger means charging *only* takes 6 hours!) and supply side (as you say what happens on hot days when Googles servers, A/C are drawing on the grid)?

I just can't understand why alternatives like Toyota's hydrogen driven EV, the Mira, (the hydrogen fuels cell on board generates the charge) aren't embraced more.

But I could be wrong which is why I'm in two minds to take profits now or hold on.
alfaspider wrote: Tue Jun 01, 2021 3:30 pm I own E&P stock through RSUs. Because of the huge volatility, I decided a few years ago to DCA out of vested stock rather than sell everything on vesting day. Of course, the unvested stock that I "own" I must hold. I'm sort of involuntarily overweight on oil.

The biggest gains likely are already in. Congrats to those who purchased back in April of last year. Some of them have tripled their money or more. But I think we could still see another double from large cap E&Ps over the next year. Many still haven't fully recovered to 2019 share prices, even though oil prices are above 2019 prices. The biggest difference between then is many investors are convinced that the end of oil is nigh and that the oil business is on borrowed time.

I agree that oil's importance will decline in the coming decades, but I also think that we have a fairly massive upside setup in the short to medium from the historically low investment in the space over the last 6 years (since the late 2014 oil price crash). It's an interesting question how quickly the EV tipping point comes relative to oil demand (i.e. when EV adoption is so widespread that gasoline demand starts to decline rapidly). I think the EV tipping point will happen fairly soon, but we are a decade out before it really starts to hit oil demand hard. Fleet turnover takes time, and we are 5-7 years out before EVs start to become the mainstays of manufacturer lineups. Because the oil business sees decreasing demand on the horizon in the long term, there's a lot of resistance towards beginning long-cycle projects that might take another 5 years to come to fruition. Therefore, we could see high prices until demand starts coming down. The other X-factor is developing world demand. The switch to electrification will be much tougher in places where the electric grids aren't reliable.
I think we are going to get a lot more than 20%. The issue is that EVs are going to be far superior from a performance, comfort, and cost standpoint in pretty short order. Climate change will have little to do with it. The last holdouts are going to be those who live in apartments that don't provide charging, but those folks won't be the new car buying demographic anyways.

The 6 hour charge time at home is irrelevant. For non-road trip use, the current crop of EVs has plenty of range for any daily driving duties except for extreme edge cases. Home charging is just a matter of plugging the car in overnight. With current range, a lot of folks will be charging every week at most. For road trips, quick charging stations are increasingly proliferating. Grid strain won't be an issue because most charging happens overnight when grid load is lower anyways. Plus, the grid will have over a decade to upgrade to handle any additional loads. We've already gone through the process of having to make the grid more robust with the proliferation of air conditioning in the 1950s and 1960s.

Cars that get 200 miles of range off a 20 minute quick charge are just becoming available (along with chargers that can do that). Most folks are going to want to get a snack and a bathroom beak anyways after 200 miles of driving.

Hate to say it, but I agree with Musk that "hydrogen is dumb"- at least for personal use automobiles. The issue is that hydrogen can only efficiently be produced by processing natural gas. But you could just run the vehicle on natural gas directly, which is much easier to store and which already has an infrastructure. You can make hydrogen out of water with electricity, but that's a lot less efficient process than charging a battery. With quick EV charging, there's really no advantage to hydrogen. Where hydrogen has potential is eventually useful is for heavy machinery and air travel. You can't really run a jet engine on natural gas (as far as I understand), but hydrogen jet engine prototypes exist.

We need to keep in mind, however, that personal transport is not the majority of oil demand. Even we completely stopped using fossil fuels for transport and electricity generations, we'd still use quite a bit of fossil fuels. But the demand would stop its historic lockstep with economic growth.
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salisditz
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by salisditz »

MrCheapo wrote: Tue Jun 01, 2021 3:21 pm
btenny wrote: Tue Jun 01, 2021 11:15 am I have owned Exxon Mobile stock since 1980. The dividends helped me put my kids through college. The stock now pays me more dividends per year than I paid for the stock. I have purchased more stock twice when the stock went on sale. The added stock I bought last year is up 50%. I am not sure I will ever sell any. But I am sure that climate change is affecting this business big time and may reduce company value in the future.

I used to own some MLP stock but the CEO converted the company from a REIT to a standard stock company without any stockholder vote or advance warning. This screwed me and all the stock holders and gave all of us big tax problems. The new company stock price crashed and we all suffered a significant capital loss from the REIT price. I will never own a MLP again.
Thanks for sharing. I bought Exxon, Chevron, BP, Shell etc all at 50% discount to their current prices. If I was sure they'd be around 40 years like (mirroring your situation) I'd have no trouble holding them. But the huge push for EVs has me concerned that the days of oil producers are limited and I should take profits now.

Just yesterday the administration floated resetting to zero, Tesla and Nissan's $7500 tax rebate allotment and increasing it to $12,500 if the car is made in a union US facility. If you make one type of car $12,500 cheaper than another then its hard to see the competitors being bought.

Thanks

P.S. I don't want this discussion to turn political, but clearly a major issue with owning oil producers (at least) is the current political push for EVs.
Something to add on (though also don't want to go ultra-political). My overall impression is that there will definitely be a decrease in oil consumption maybe within a decade. And we are still behind in terms of renewable energy. The "New Energy" buzzword gives me the same impression as "Biotechnology", as they are both extremely promising and beneficial, but the timespan for return could be longer than most people willing to wait. And the push for new energy also is related to the administration/political spectrum change. It's a little bit risky for me to invest in energy and biotech
sectors for now.

The current push for EVs reminds me of a lot of what China's been doing. They also push heavily in terms of subsidy and other governmental incentives, while mass building charging stations since 2013. Also buses are very oil-inefficient and contributes greatly to the climate change. So the government enacts a quick change, with now over 90% of the EV buses are used in China. The transition from traditional fuel to Electric takes time and needs consistent government support. I am not confident enough to say if that will be our case in 10 years.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Slacker »

Personally, I'm all in on index funds only.

I wouldn't be enthusiastic about buying oil stocks. Once you experience never having to go to a gas station ever again or go get an oil change you won't want to go back to that. I really like waking up every morning with a "full tank" if I so desire. There will still be a need for oil products, but EVs will put a dent in the total market for oil that a lot of producers won't be able to make a profit if the adoption of EVs happens rapidly. Pretty sure I've read that quite a few fracking outfits are still being sustained on cheap debt with the hopes of eventual high enough oil prices.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by NoRegret »

arcticpineapplecorp. wrote: Tue Jun 01, 2021 2:06 pm
btenny wrote: Tue Jun 01, 2021 11:15 am I have owned Exxon Mobile stock since 1980. The dividends helped me put my kids through college. The stock now pays me more dividends per year than I paid for the stock. I have purchased more stock twice when the stock went on sale. The added stock I bought last year is up 50%. I am not sure I will ever sell any. But I am sure that climate change is affecting this business big time and may reduce company value in the future.

I used to own some MLP stock but the CEO converted the company from a REIT to a standard stock company without any stockholder vote or advance warning. This screwed me and all the stock holders and gave all of us big tax problems. The new company stock price crashed and we all suffered a significant capital loss from the REIT price. I will never own a MLP again.
that's too bad.

since 1980 had you owned the S&P500 (vtsax didn't exist until 1992) you'd have done better, in fact you would have done about twice as well as Exxon with far less risk:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

portfolio visualizer only goes back to 1985 but shows exxon had lower return, lower risk adjusted return, higher standard deviation, worst max drawdown:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
XOM equity line was above that of SPX for a significant amount of time. Depending on when and how much user btenny paid for his kids’ college he may have come out ahead.

XOM dipped below SPX in recent years but who’s to say it won’t come back?

Life is not just a couple of lines on a chart. You have conviction in your investing strategy— that’s great. But it doesn’t mean others who made different choices are necessarily wrong, especially if your definition of right and wrong is starting/ending date dependent.
Market timer targeting long term cycles -- aiming for several key decisions per asset class per decade
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Arpanet »

Exchme wrote: Tue Jun 01, 2021 9:33 pm While I wouldn't invest in any individual stock, if I had to invest in the energy sector, it would be with ExxonMobil. The firm I worked for saw all the majors and ExxonMobil managed the tightest ship, demanding data, feedback and improvement from everyone. The rest of the industry didn't really compare.
Curious if you've seen Engine No. 1's presentation to investors about Exxon: https://reenergizexom.com/wp-content/up ... 021-v2.pdf

Makes a pretty compelling case that Exxon is in fact the worst-run major (but obviously they have an agenda). What aspects of it, if any, do you disagree with?
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arcticpineapplecorp.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by arcticpineapplecorp. »

NoRegret wrote: Wed Jun 02, 2021 10:29 am
arcticpineapplecorp. wrote: Tue Jun 01, 2021 2:06 pm
btenny wrote: Tue Jun 01, 2021 11:15 am I have owned Exxon Mobile stock since 1980. The dividends helped me put my kids through college. The stock now pays me more dividends per year than I paid for the stock. I have purchased more stock twice when the stock went on sale. The added stock I bought last year is up 50%. I am not sure I will ever sell any. But I am sure that climate change is affecting this business big time and may reduce company value in the future.

I used to own some MLP stock but the CEO converted the company from a REIT to a standard stock company without any stockholder vote or advance warning. This screwed me and all the stock holders and gave all of us big tax problems. The new company stock price crashed and we all suffered a significant capital loss from the REIT price. I will never own a MLP again.
that's too bad.

since 1980 had you owned the S&P500 (vtsax didn't exist until 1992) you'd have done better, in fact you would have done about twice as well as Exxon with far less risk:

Image

source:
http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

portfolio visualizer only goes back to 1985 but shows exxon had lower return, lower risk adjusted return, higher standard deviation, worst max drawdown:

https://www.portfoliovisualizer.com/bac ... ion2_2=100
XOM equity line was above that of SPX for a significant amount of time. Depending on when and how much user btenny paid for his kids’ college he may have come out ahead.

XOM dipped below SPX in recent years but who’s to say it won’t come back?

Life is not just a couple of lines on a chart. You have conviction in your investing strategy— that’s great. But it doesn’t mean others who made different choices are necessarily wrong, especially if your definition of right and wrong is starting/ending date dependent.

sure i get that but I'm not using an arbitrary timeline. I'm using the dates btenny gave (1980 to present). So I'm not cherry picking anything here.

Also btenny didn't say s/he sold some stock as s/he went along (i.e., sold high). btenny took dividends. that actually could have been done with S&P500 too. If overall return for S&P500 from 1980 to present was higher than exxon over the same time period, then s/he would/could have had more of that college money with S&P500 than with exxon. i'm not telling a story. I'm showing the chart comparing a stock (that someone thought did great) and then compared that to something more market like (S&P500) to see that diversification was the more superior risk adjusted strategy. numbers don't lie.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by btenny »

Artic. I am pretty sure you are right. But XOM did great from 1980 to 2008ish and then has been flat to bad since. The company made a big push into natural gas and LNG in the early 2000s. Then NG prices crashed and have stayed down due to fracking finding all kinds of NG. This NG move caused me to think long and hard in 2008ish about selling and paying capital gains taxes and switching to total stock index stuff.

This NG move also changed the XOM balance sheet and business plan a lot. They used to have almost zero debt and used profit to fund new oil fields. Now they have huge debt that is increasing every year as NG and fracking are not very profitable. So they have to borrow $$ for all the new wells. And it is getting worse. This is partly why they lost governing board seats at the annual meeting last month.

Back when I bought XOM I did not know anything about mutual funds or index funds or low cost investing. I knew about oil rationing and OPEC stuff and real estate inflation stuff from the 1970s. I had done well with real estate but sold some to have less work. Mutual funds in those days felt bad to small west coast investors like me. You mailed in some $$ to a company way back east that you never heard of. Then you hoped this company would earn $$ and distribute it and give your $$ back if you asked. The only people who sold mutual funds out here were small "investment managers" who were mostly slick sales people who charged you 3-5% fees plus transaction costs. It looked and seemed like a racket. So if you wanted to invest in companies you bought single stocks in companies you understood. I understood XOM a little because my uncle worked for them in Houston and Galveston.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by arcticpineapplecorp. »

btenny wrote: Wed Jun 02, 2021 11:55 am Artic. I am pretty sure you are right. But XOM did great from 1980 to 2008ish and then has been flat to bad since. The company made a big push into natural gas and LNG in the early 2000s. Then NG prices crashed and have stayed down due to fracking finding all kinds of NG. This NG move caused me to think long and hard in 2008ish about selling and paying capital gains taxes and switching to total stock index stuff.

This NG move also changed the XOM balance sheet and business plan a lot. They used to have almost zero debt and used profit to fund new oil fields. Now they have huge debt that is increasing every year as NG and fracking are not very profitable. So they have to borrow $$ for all the new wells. And it is getting worse. This is partly why they lost governing board seats at the annual meeting last month.

Back when I bought XOM I did not know anything about mutual funds or index funds or low cost investing. I knew about oil rationing and OPEC stuff and real estate inflation stuff from the 1970s. I had done well with real estate but sold some to have less work. Mutual funds in those days felt bad to small west coast investors like me. You mailed in some $$ to a company way back east that you never heard of. Then you hoped this company would earn $$ and distribute it and give your $$ back if you asked. The only people who sold mutual funds out here were small "investment managers" who were mostly slick sales people who charged you 3-5% fees plus transaction costs. It looked and seemed like a racket. So if you wanted to invest in companies you bought single stocks in companies you understood. I understood XOM a little because my uncle worked for them in Houston and Galveston.
i get it.

but i think we have to be careful not to conclude that owning individual stocks (besides real estate) was the only way to invest just because that's what lots of people did back then. There were mutual funds back to 1924. Here's 9 of them:

https://www.investopedia.com/ask/answer ... lfunds.asp

5 of them outperformed exxon mobil since exxon mobil 6/1/1972:

http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

when i was in my 20s i once talked to my dad about investing. he hated mutual funds because they weren't tax efficient and he didn't like paying annual costs and he didn't like loads. Of course I tried to explain to him how no load index funds were different but he had already made his mind up long before that. so his IRA instead languished being "invested" in a CD.

besides, the kinds of explanations you're giving about exxon getting into nat gas before gas prices collapsed due to fracking (glut of gas) further demonstrate (for others to understand) the risk of owning single stock. Sector risk is a real thing. Owning a diversified mutual fund eliminates the kind of stock and sector risk we see with exxon.
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by gougou »

Holding EPD which I bought between $16 to $18 from last year. Adding ET which has 20%+ distributable cashflow return per year and a promising deleverage story.

I also like HK.883 (CNOOC Ltd which used to trade on NYSE under the ticker CEO, but was delisted early this year). Oil price went up but HK.883 is still on the floor for a variety of reasons. It'll pay a 10%+ dividend with current oil price.

I think the market is too pessimistic about oil & gas and that creates a lot of opportunities. You probably can't find any bluechip stocks yielding 7.5% with strong coverage in any other industries. But EPD is such an MLP that pays 7.5%, has extremely stable EPS and cashflow over many years. EPD is also able to borrow 40 year senior debt at 3.xx% interest rate, but if oil & gas is all bust in 40 years how does such debt get repaid?
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MrCheapo
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by MrCheapo »

alfaspider wrote: Wed Jun 02, 2021 8:34 am
I think we are going to get a lot more than 20%. The issue is that EVs are going to be far superior from a performance, comfort, and cost standpoint in pretty short order. Climate change will have little to do with it. The last holdouts are going to be those who live in apartments that don't provide charging, but those folks won't be the new car buying demographic anyways.

The 6 hour charge time at home is irrelevant. For non-road trip use, the current crop of EVs has plenty of range for any daily driving duties except for extreme edge cases. Home charging is just a matter of plugging the car in overnight. With current range, a lot of folks will be charging every week at most. For road trips, quick charging stations are increasingly proliferating. Grid strain won't be an issue because most charging happens overnight when grid load is lower anyways. Plus, the grid will have over a decade to upgrade to handle any additional loads. We've already gone through the process of having to make the grid more robust with the proliferation of air conditioning in the 1950s and 1960s.

Cars that get 200 miles of range off a 20 minute quick charge are just becoming available (along with chargers that can do that). Most folks are going to want to get a snack and a bathroom beak anyways after 200 miles of driving.

Hate to say it, but I agree with Musk that "hydrogen is dumb"- at least for personal use automobiles. The issue is that hydrogen can only efficiently be produced by processing natural gas. But you could just run the vehicle on natural gas directly, which is much easier to store and which already has an infrastructure. You can make hydrogen out of water with electricity, but that's a lot less efficient process than charging a battery. With quick EV charging, there's really no advantage to hydrogen. Where hydrogen has potential is eventually useful is for heavy machinery and air travel. You can't really run a jet engine on natural gas (as far as I understand), but hydrogen jet engine prototypes exist.

We need to keep in mind, however, that personal transport is not the majority of oil demand. Even we completely stopped using fossil fuels for transport and electricity generations, we'd still use quite a bit of fossil fuels. But the demand would stop its historic lockstep with economic growth.
That's a fair point about the cost and convenience. Filling up for free is nice. But if even 10% of the population of EVs do you really think all those charging stations will be free to everyone? Also, the nice benefits of HOV lane access, preferred parking all go away if you have a lot of EVs.

I didn't know about the 20 minute quick charge for 200 miles. That would be a game changer. What company does them?
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by alfaspider »

MrCheapo wrote: Wed Jun 02, 2021 2:51 pm
alfaspider wrote: Wed Jun 02, 2021 8:34 am
I think we are going to get a lot more than 20%. The issue is that EVs are going to be far superior from a performance, comfort, and cost standpoint in pretty short order. Climate change will have little to do with it. The last holdouts are going to be those who live in apartments that don't provide charging, but those folks won't be the new car buying demographic anyways.

The 6 hour charge time at home is irrelevant. For non-road trip use, the current crop of EVs has plenty of range for any daily driving duties except for extreme edge cases. Home charging is just a matter of plugging the car in overnight. With current range, a lot of folks will be charging every week at most. For road trips, quick charging stations are increasingly proliferating. Grid strain won't be an issue because most charging happens overnight when grid load is lower anyways. Plus, the grid will have over a decade to upgrade to handle any additional loads. We've already gone through the process of having to make the grid more robust with the proliferation of air conditioning in the 1950s and 1960s.

Cars that get 200 miles of range off a 20 minute quick charge are just becoming available (along with chargers that can do that). Most folks are going to want to get a snack and a bathroom beak anyways after 200 miles of driving.

Hate to say it, but I agree with Musk that "hydrogen is dumb"- at least for personal use automobiles. The issue is that hydrogen can only efficiently be produced by processing natural gas. But you could just run the vehicle on natural gas directly, which is much easier to store and which already has an infrastructure. You can make hydrogen out of water with electricity, but that's a lot less efficient process than charging a battery. With quick EV charging, there's really no advantage to hydrogen. Where hydrogen has potential is eventually useful is for heavy machinery and air travel. You can't really run a jet engine on natural gas (as far as I understand), but hydrogen jet engine prototypes exist.

We need to keep in mind, however, that personal transport is not the majority of oil demand. Even we completely stopped using fossil fuels for transport and electricity generations, we'd still use quite a bit of fossil fuels. But the demand would stop its historic lockstep with economic growth.
That's a fair point about the cost and convenience. Filling up for free is nice. But if even 10% of the population of EVs do you really think all those charging stations will be free to everyone? Also, the nice benefits of HOV lane access, preferred parking all go away if you have a lot of EVs.

I didn't know about the 20 minute quick charge for 200 miles. That would be a game changer. What company does them?
Public charging stations will be like gas stations (they already are).

As far as quick charges, the precise rate of charge depends on the specific model, but the Tesla v3 Superchargers and the Electrify America 350kw DC quick chargers approach these rates. Typically, you want an EV with 300 miles of range for quickest charge, because the quickest charging can happen between 20% and 80%.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by helloeveryone »

Random Poster wrote: Tue Jun 01, 2021 1:25 pm I have a few shares of stock in my ex-employer’s company (an E&P company that used to be a lot larger).

It is my only individual stock holding, as everything else is in index funds, and amounts to less than 1/2 of a percent of my net worth.

I am keeping these shares for only three reasons:

1) To be able to keep voting against the Board and CEO;

2) To keep receiving a tiny dividend, as a continued severance payment of sorts; and

3) In hopes that the company gets bought out and I make a bit of money off of the shares.

That’s it. I would never own individual stocks otherwise, oil company or not.
"In hopes that the company gets bought out and I make a bit of money off of the shares. "
Curious as to how this works...

So if company X buys your former company - do the shares of stocks you owned in your stock account disappear and you get the price per stock that the buyout company paid? (ie - it's an automated process?)
Exchme
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Exchme »

Arpanet wrote: Wed Jun 02, 2021 10:36 am
Exchme wrote: Tue Jun 01, 2021 9:33 pm While I wouldn't invest in any individual stock, if I had to invest in the energy sector, it would be with ExxonMobil. The firm I worked for saw all the majors and ExxonMobil managed the tightest ship, demanding data, feedback and improvement from everyone. The rest of the industry didn't really compare.
Curious if you've seen Engine No. 1's presentation to investors about Exxon: https://reenergizexom.com/wp-content/up ... 021-v2.pdf

Makes a pretty compelling case that Exxon is in fact the worst-run major (but obviously they have an agenda). What aspects of it, if any, do you disagree with?
I was commenting on my interactions with XOM folks, which were at the working and mid management level, where the people, procedures, discipline and decision making were much better than other firms. This activist group has an agenda that doesn't sound like it is focused on making money, but rather seems some kind of attempt to use for-profit businesses for their non financial agenda. To the extent they are influential in the future of XOM, investors may want to be wary of it.
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MrCheapo
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by MrCheapo »

alfaspider wrote: Wed Jun 02, 2021 2:55 pm Public charging stations will be like gas stations (they already are).

As far as quick charges, the precise rate of charge depends on the specific model, but the Tesla v3 Superchargers and the Electrify America 350kw DC quick chargers approach these rates. Typically, you want an EV with 300 miles of range for quickest charge, because the quickest charging can happen between 20% and 80%.
I'm not sure about how ubiquitous they will be, there are a lot of gas stations. Also a lot of the nice things about EVs like free charging, HOV access, priority parking can't scale can they?

To be sure, I'm glad they are trying out alternative to fossil fuels, it just seems the nice aspects of EV won't scale if even 10% of people have them.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by alfaspider »

MrCheapo wrote: Wed Jun 02, 2021 3:30 pm
alfaspider wrote: Wed Jun 02, 2021 2:55 pm Public charging stations will be like gas stations (they already are).

As far as quick charges, the precise rate of charge depends on the specific model, but the Tesla v3 Superchargers and the Electrify America 350kw DC quick chargers approach these rates. Typically, you want an EV with 300 miles of range for quickest charge, because the quickest charging can happen between 20% and 80%.
I'm not sure about how ubiquitous they will be, there are a lot of gas stations. Also a lot of the nice things about EVs like free charging, HOV access, priority parking can't scale can they?

To be sure, I'm glad they are trying out alternative to fossil fuels, it just seems the nice aspects of EV won't scale if even 10% of people have them.
There's already electricity run to every business in the country, so it won't be hard to make chargers ubiquitous. You are correct that there won't be as many stations as there are gas stations for the simple reason that most people will be charging at home. Public chargers will be mostly for road trips.

You are correct that things like HOV access and priority parking won't scale, but these are minor fringe benefits relative to the other advantages of EV ownership that will grow with time (lower cost, lower noise, better performance). I analogize EVs to digital watches compared to gas powered vehicles as mechanical watches. When digital watches first came out, they were expensive novelties. Now, a mechanical watch is a luxury item mostly owned by collectors. Most fundamental components of EVs are cheaper and easier to manufacture than internal combustion cars. What keeps them expensive is less economy of scale and high battery pack prices. Those obstacles are starting to fall away.
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Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by Random Poster »

helloeveryone wrote: Wed Jun 02, 2021 2:59 pm "In hopes that the company gets bought out and I make a bit of money off of the shares. "
Curious as to how this works...

So if company X buys your former company - do the shares of stocks you owned in your stock account disappear and you get the price per stock that the buyout company paid? (ie - it's an automated process?)
Depends on how the buyout is structured.

If it is an all-cash deal, then the shares disappear and cash shows up in the settlement account.

If it is an all-stock deal, then the shares disappear and the buyout company stock shows up instead.

If it is a mix of cash/stock, then you get some of both of the above.

Usually.

But, yes, it is an automated process, once the buyout closes.
Topic Author
MrCheapo
Posts: 170
Joined: Tue Dec 22, 2020 3:43 pm

Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by MrCheapo »

Thanks for sharing. I never thought of EVs as being technologically superior rather as a technological necessity.

I really don't know how this will play out going forward. EV will have an uphill battle from many demographic groups. I'm sure most of us Bogleheads will own one. But if I'm living pay-check-to-pay-check as many Americans do, I'd be buying the 2nd hand cars from Bogleheads rather than ponying up for a new car, new charger etc.
alfaspider wrote: Wed Jun 02, 2021 3:38 pm
MrCheapo wrote: Wed Jun 02, 2021 3:30 pm
alfaspider wrote: Wed Jun 02, 2021 2:55 pm Public charging stations will be like gas stations (they already are).

As far as quick charges, the precise rate of charge depends on the specific model, but the Tesla v3 Superchargers and the Electrify America 350kw DC quick chargers approach these rates. Typically, you want an EV with 300 miles of range for quickest charge, because the quickest charging can happen between 20% and 80%.
I'm not sure about how ubiquitous they will be, there are a lot of gas stations. Also a lot of the nice things about EVs like free charging, HOV access, priority parking can't scale can they?

To be sure, I'm glad they are trying out alternative to fossil fuels, it just seems the nice aspects of EV won't scale if even 10% of people have them.
There's already electricity run to every business in the country, so it won't be hard to make chargers ubiquitous. You are correct that there won't be as many stations as there are gas stations for the simple reason that most people will be charging at home. Public chargers will be mostly for road trips.

You are correct that things like HOV access and priority parking won't scale, but these are minor fringe benefits relative to the other advantages of EV ownership that will grow with time (lower cost, lower noise, better performance). I analogize EVs to digital watches compared to gas powered vehicles as mechanical watches. When digital watches first came out, they were expensive novelties. Now, a mechanical watch is a luxury item mostly owned by collectors. Most fundamental components of EVs are cheaper and easier to manufacture than internal combustion cars. What keeps them expensive is less economy of scale and high battery pack prices. Those obstacles are starting to fall away.
alfaspider
Posts: 3697
Joined: Wed Sep 09, 2015 4:44 pm

Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by alfaspider »

MrCheapo wrote: Wed Jun 02, 2021 4:15 pm Thanks for sharing. I never thought of EVs as being technologically superior rather as a technological necessity.

I really don't know how this will play out going forward. EV will have an uphill battle from many demographic groups. I'm sure most of us Bogleheads will own one. But if I'm living pay-check-to-pay-check as many Americans do, I'd be buying the 2nd hand cars from Bogleheads rather than ponying up for a new car, new charger etc.
alfaspider wrote: Wed Jun 02, 2021 3:38 pm
MrCheapo wrote: Wed Jun 02, 2021 3:30 pm
alfaspider wrote: Wed Jun 02, 2021 2:55 pm Public charging stations will be like gas stations (they already are).

As far as quick charges, the precise rate of charge depends on the specific model, but the Tesla v3 Superchargers and the Electrify America 350kw DC quick chargers approach these rates. Typically, you want an EV with 300 miles of range for quickest charge, because the quickest charging can happen between 20% and 80%.
I'm not sure about how ubiquitous they will be, there are a lot of gas stations. Also a lot of the nice things about EVs like free charging, HOV access, priority parking can't scale can they?

To be sure, I'm glad they are trying out alternative to fossil fuels, it just seems the nice aspects of EV won't scale if even 10% of people have them.
There's already electricity run to every business in the country, so it won't be hard to make chargers ubiquitous. You are correct that there won't be as many stations as there are gas stations for the simple reason that most people will be charging at home. Public chargers will be mostly for road trips.

You are correct that things like HOV access and priority parking won't scale, but these are minor fringe benefits relative to the other advantages of EV ownership that will grow with time (lower cost, lower noise, better performance). I analogize EVs to digital watches compared to gas powered vehicles as mechanical watches. When digital watches first came out, they were expensive novelties. Now, a mechanical watch is a luxury item mostly owned by collectors. Most fundamental components of EVs are cheaper and easier to manufacture than internal combustion cars. What keeps them expensive is less economy of scale and high battery pack prices. Those obstacles are starting to fall away.
To be clear, I think it's going to be a long process converting to ICE. The paycheck to paycheck types will buy EVs once you can show them that their monthly payments are less with the EV. Used first gen EVs like the Leaf can be had quite cheaply, and even Bolts are still pretty cheap. But most people want SUVs. It will be another decade before you can pick up a used Mustang Mach-E for cheap (with a 7 year loan) at a used car lot.
rockylou
Posts: 134
Joined: Sat Feb 23, 2013 4:31 pm

Re: What Are People Doing with their Oil and Natural Gas Stocks

Post by rockylou »

I have chevron and Exxon stock my mother gifted to me about 15 years ago. I would like to sell but I can’t determine the cost basis as my mother is now deceased and I have no paperwork as she had the stock for a very long time. I figured I would leave to my sons when I die and then they can sell with a new cost basis but wondering if I should sell now and take a tax hit?
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