Buying 1/3 position in OII under 41. Will buy more at 36 if I can.
This is obviously down because of the deep-water drilling moratorium, but also through “guilt by association” because of BP. Every time you look at the leak, you see “OCEANEERING” in the upper left-hand corner…
They will suffer some earnings hits, but they are the answer, not the problem…Down from $68 since the leak, now near $41.
ADDENDUM: paid 40.45
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I really like this idea.
Ballsy move but I will agree that it’s really getting stupid
The problem is that the government can be even dumber like by doing moronic populist things like imposing a drilling ban – will have wonderous effects on the economy
Ballsy move ? More like catching a falling knife. If $40 gets taken out on a closing basis, $37 is the closest support. After that, support is down at $28.
Buying on the cheap is one thing. But I prefer to do so after some sort of base has formed, or at least a retest of an intermediate bottom is in place. I know it’s only a 1/3 position, but I’d still hold off and see where the dust settles. IMO, there’s no rush to run in and buy these kinds of beaten down oil stocks given the current situation and the possibility that politicians could have a say as to how it plays out.
What seems low (cheap) can always go lower (cheaper) …
No doubt there is risk. But markets and now sectors move past the point of extremes. You MUST endure some pain to take a position in the current market environment. or else you just clean miss it.
This stock is very cheap too…
Scott, Love the blog, man. But this trade doesn’t appear to have an edge. The SP-500 is starting to slip from its latest consolidation zone and hasn’t even begun to get oversold yet. There’s an 8-month-long rounded top formation on the SP-500 now in place. With the oil space leading the way lower already, any break below by the SP-500 should lead to further acceleration lower by energy names. OII is also in precarious technical condition, with no real support until 28, if 40 cannot hold. Sitting this one out appears like the better plan right now, but I wish you the best.
Scott said: “You MUST endure some pain to take a position in the current market environment. or else you just clean miss it.”
I completely disagree with that premise/assumption for the individual investor. Unless you’re managing enormous sums of money (professional money manager) and have to average into a position over time due to the amount of money under management, there’s no need for the individual investor to “endure some pain” when initiating a new position.
The individual investor is much better off being patient, watching & waiting for a stock to put in a bottom, (and possibly re-test that bottom) before committing funds.
the fact that everyone hates it, means it will work. good luck.
ps, diggin the show