Growing up in the tar pits of Brooklyn, I have a keen sense for when to drill for oil and when not to. I was raised under the hammering of oil rigs. I’d go to sleep with fire burning bright in the Brooklyn sky, as my family drilled thru the tar sands and into the black gold below. Sometimes we’d hit gas and blow up a few square miles of homes, but it was all worth it in the end.
In recent years I’ve had great difficulty trading oil stocks, mainly because of the present state of the industry. It is dead, for lack of a more elegant term. Gone are the halcyon days of $140 crude, when men like me could walk onto his porch, light a bulldog pipe, and oversee his vast empire of derricks mechanically placing money into my purse (no homo). Nowadays you have to work hard for it, claw and bite your fellow man for a few million barrels of light sweet.
It just so happens that I have very sharp teeth and even sharper finger nails.
Starting last week, like a burglar in the night, I initiated a position in a well known oil company. Today, I bought a much smaller one. Over the next few weeks, I intend to secretly accumulate shares in a variety of oil companies, leading to Le Fly becoming, once again, an oil man of esteemed proportions. My name will be synomous with oil, just as Zerohedge is with bear and Business Insider to shit.
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The days are not the same! Eric “Oil Barrel” is a disgraced man and Senor Rockefeller is D-E-A-D Dead!
Nice. I mentioned here that I had gone long XLE about 5% ago (back at 58). These stocks are ABSOLUTELY HATED on Wall St. and institutions are very underweight. A little upside action in oil prices thanks to the Saudis will bring on some major buying in these names.
The boom in shale production sent a shock wave thru the whole industry worldwide, despite not being overly profitable. Yet I feel that saved us up till now with low energy prices and the lack of a late cycle energy price shock. The criss-crossing of the energy sector now will be ominous with low inflation being crucial to the FED. Recall winter 2008.
But as you say, the sector has been left for dead by investors. Oil can remain exactly as it is and there are serious bargins to be found all over. Tax loss selling is just making it better.
There is lots of pressure on management to focus on improving cash flows instead of production growth. With a only a few major projects left in the pipe to go online next year, should see production growth start to fall significantly by 2021. The market will start pricing that in by mid-2020s if not sooner.