I’ve been watching my BAS position, along with the entire energy services sector, being thrown off a highrise all morning.
I don’t know why, but all of a sudden, economic contraction matters again. Let’s gloss over that the entire planet has been in an industrial contraction since mid-2010, uninterrupted, and that this is not news in the least.
Let’s ignore that demand for basic materials ranging from oil to metals has been channeling downward only sporadically delayed from momentary noise – for two straight years.
Let’s pretend we didn’t already know this was happening.
Because about a month ago, everything was fine. And now, right now, it matters. We just cannot go on.
“Did you know Italy’s economy contracted last quarter?”
Well gee, I could have guessed. Something about it also contracting every other quarter for the prior 8…
At any rate, BAS is being unfairly hit here. I’ve been through their books, and they’re trading reasonable. Even with broad slowdown, they’re basically in a position to absorb the shock. And they’re a survivor – I welcome industry consolidation because BAS will emerge the winner.
So I added to BAS for $11.31.
Cash stands at 10%
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Do you have a rough time frame for the BAS play? Or is this a forever company?
Nothing is forever.
I initially thought it would be a few months. Now it’s looking like a few years…
I guess until it’s not cheap any more, whatever that means for me.
Would the trigger by a sharp rise in natural gas prices?
Most likely as that would improve the drilling economies. It could also be a continued conversion to natty by power utilities.
But seriously, at these prices, it could “just be”. BAS is way cheap.
Thanks for the feedback.