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Oil

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Thread replies: 53
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Coming from the greatest investor of all times, I command you all to buy oil.
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>>989015
No.

To succeed in commodity trading you must buy strength and sell weakness. The market is paying people to sell oil. If you must buy something, buy something that is already appreciating in value: ammunition company equities.
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What the hell does that even mean? Don't buy until its too late and the price is already climbing? Its more simple than that to me. Buy at $38 a barrel, wait 2 years and sell at $150 a barrel.
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One thing ive noticed about investing is that people always make silly excuses to not buy something that tremendously undervalued...
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>>989020
I think OP is partly correct, but just not specific enough. Timing the market is stupid, OP.

One thing we can agree on is that right now, Oil is relatively cheap.

My course of action will be to build long position in oil incrementally, month by month, so that my average will hopefully have a better chance at looking alright. That is... if you're planing to hold thereafter for multiple years, I think this is a good strategy.

For the short-term, shorting oil is going to make you money. But the crazy people in OPEC could change their minds any second and being ready for that trend change isn't something I want to mess up.
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>>989059
Yea I agree that unless you have specific data, its impossible to time markets. But were talking about something that just dropped %6 in one day to a 7 year low. It could bounce back to $45-50 tomorrow with that kinda of volatility so i'd try and grab up a few bucks worth asap. I totally agree with you that you should keep expanding your position over the next few months so long as it says low but do you really think its still going to be under $40 in the spring/ summer? Just a couple years ago they were scrambling for oil polluting everything with fracking when oil was $120. The only reason oil is cheep is because the Saudis are trying to undermine the Russian economy (for obvious reasons), the dollar is oddly strong, the world economy is slowed, and its winter. So in this instance we do have some data and reason to suggest the price will change rather soon.
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>>989015
May I buy doge coins instead of barrels?
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cute. enjoy getting btfo'd
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>>989020
>buy high sell low
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>>989102
Hahahah you can buy in dogecoins instead of dollars maybe :)
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>>989113
LMFAO glad someone gets it.
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>>989123
lel, i'll have to check the daily doge/crude oil exchange rate
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>>989128
Who else here /ballstothewall/?
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>>989136
Yea I mined dogecoins day one and made $20,000 in four days. Who the fuck are you?
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>>9891428
Percent wise im literally the best investor of all times. I've only invested in silver at $8, litecoins at 1/100 of a penny, and dogecoins at 50 cents per million. Ill admit I spent everything but still fuck you noobs.
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What the fuck is going on.
http://www.thetimes.co.uk/tto/business/industries/naturalresources/article4635048.ece
Why would crude oil ever go down to $20 has the world honestly gone brainless?
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>>989142
what is this app?
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>>989264
Why did it go there in 1986 and 1998?

There's your answer(s).
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>>989027
Might take 10 years before oil prices recover past $50 vs. the USD. The stagnation proclamation is coming because taxes are too high. IT could take a long time for everyone to get over cut budgets,
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>>989264
Money crunch because equity quits financing debt since it's economically destructive and equity naturally assumes leverage over debt ending the vicious bureaucratic extortion cycle.

Austrian economics comes in with the budgets getting slashed, prices for everything drops which drops prices for oil even further. Some currencies explode raising demand for the USD internationally. Cash flow into circulation reverses and demand for oil decreases further, output recedes and prices get fixed by the most competitive producers. Eventually bankruptcies bottom out and the economy emerges efficient and competitive with equitable economic powers.

Or the extortion game keeps up, stagflation sets in and the economy degrades until all economic and national integrity gets conquered by foreign powers turning America into a slave state in perpetual decline.
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>>989786
>Austrian economics comes in with the budgets getting slashed, prices for everything drops which drops prices for oil even further.
Let me clarify, prices for most things drop which results in shrinking overhead costs for oil companies.
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>>989798
Shrinking operating expenses for productive companies not subject to bankruptcy from high interest rates would allow for natural growth simultaneous with artificial loss.
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>>989020

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

Who the fuck would buy strength and sell weakness? That offers the least reward for the most risk the move has already begun.

That's like going to a grocery store and only buying the things that AREN'T on sale you fuckin moron. You going to go buy your favorite fuckin hamburgers when the price keeps going up and up or are you going to wait for those saucy bastards to go on sale and accumulate at a good price?
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>>989811
You're an idiot. How much gold and silver do you have right now?
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>>989820

No dude, you're the idiot. Think about it.

It's not buy high sell higher, it's not sell low buy lower.

Buy when something is cheap, buy when no one else wants it.
Sell when something is expensive, dump it on some idiot who thinks buying after a rally in price is a good idea.

But if you want to continue trading with the odds against you (ie: buying after price has rallied, selling after price has dropped), go ahead bra you can continue being the idiot on the other side of my trades

I have no gold or silver
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I'm in SDRL, CHK, USO
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>>989827

Look there's the orthodox play Buy Good stuff Sell bad stuff. And the Contrarian Bet. Buy Shit, Sell Stars.
Contrarians come out slightly ahead, because of risk. but adjust for risk and these are still 50/50 bets.
and are, point of fact, opinions and assumptions.
The only real strategies are cost basis reduction, Leverage, and Risk management.
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>>989831
Dudeee nicee!
All of thos are cheep as hell. As long as they don't go completely bankrupt you will make a killing.
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>>989786
I agree that things are stagnate due to complete incompetence, but 10 years is way too long. They will stimulate the economy and get things rolling again very soon im sure. No way in hell the central planners will let us slid into a completely stagnate and deflationary period.
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>>989020
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>>989786
>Might take 10 years before oil prices recover past $50 vs. the USD

No. Saudi Arabia needs a $ 70-80 oil price to break even. It had to burn over a quarter of its foreign assets this year in order to balance its budget.
They might be able to survive with low price one or two years more. After that they will also start feeling the heat.
Low prices can't last more than 5 years.
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>>990082
>No way in hell the central planners will let us slid into a completely stagnate and deflationary period.
If they've run out of leverage (seems they almost have) there will be an acute drought of accessible cash flow and they'll be stuck "underground" because they can't compete with efficient, insulated and equitable economies. This could be easily covered up by new highs upon new highs for the $DJIA, meanwhile the real economy deflates.

It could take as long as 20 years for it to straighten itself out IMO, GDP growth could average just a nominal -1%-1% in the US while stocks leap into new highs consistently.

This is merely a plausible scenario though.
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>>990737
>No. Saudi Arabia needs a $ 70-80 oil price to break even. It had to burn over a quarter of its foreign assets this year in order to balance its budget.
Then they need to fix their budget by spending less or they will have to sell out to "foreign" equity.
Low prices can last for more than 10 years because as I mentioned - reduced operating expenses would reduce oil production cost and oil distribution cost.
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>>990823
How does reduced operating costs mean reduced production cost? Rediced capex means less drilling means less oil means higher prices. I dont follow you. It seems you are saying companies can reduce spending without reducing output
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>>989801
Can you explain the term artificial loss?
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>>990847
The variable cost for creating oil is the derivatives of the oil that power the equipment. The energy is the main driver, and for an oil company, oil is synonymous with energy. You sell above variable costs, and you're generating cash to lower the fixed costs. Otherwise, your fixed costs are just eating away at your profitability.
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>>990923
Are you implying oil companies are making more money off $40 bbl than $100 bbl because it costs less to fuel their trucks? Ive read numerous earnings call transcripts and have never heard an oil exec giddy about how cheap it will be to run their equipment.
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>>990959
No, that's not what I'm saying at all. That's not quite right. They're not making more money, but it is costing them less money to make it. Oil used to be quite profitable because it was "scarce," or at least OPEC teamed up to make it scarce.

Now it's basic commodity economics. The person with the lowest variable cost in an oversupplied market wins. In this case though, variable costs are lowered when the commodity drops, so everyone can stay in the game longer. Eventually the sales price * volume won't cover fixed costs, and that will bleed them dry, but even if that's so (which it is now), the only good decision is to continue running and generate cash to partially cover the fixed costs, while the higher variable cost guys get pushed out of the market because they can't keep up the pace. It's just harder to do when the other guys get better fixed costs because you keep running your plants.
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>>990847
Currently, they can. Most of the holes are already drilled; the capital has already been spent. Note also that while the rig count is dropping, production is going up, or at worst, staying flat (this was as of two or three months ago, so forgive me if it's outdated).

I digress though. Since the holes are already drilled, all of the remaining cost is variable, aside from wages and the cost of assets, and maybe a few other things I'm forgetting.
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>>990962
Ya we're way past that now. Now that oil is operating like a normal commodity, like you said, the following rule applies: the cure for low prices is low prices. No one is funding exploration and demand will grow to eat up all the cheap gas. Thats all there is to it.

Theres only two roads:

1. Only super low cost drillers like Saudis stay in business and can't fill demand, in which case price goes up

2. Saudis give in and lose market share. Production drops and price goes up

Luckily, those wahhabi assclowns dont have the cash reserves to make it longer than 2 years and no one in their right mind would buy Saudi debt. At worst, a few distressed shale cos go belly up and XOM buys their assets. It'll be nice to finally have a few level headed majors in charge of the world's largest reserves instead of these suicidal smalltimers. Starting in 2018 $120 bbl forever
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>>989142
>he bought BTU
>even after the reverse stock split, and the closing down of plants

you better be shorting that EEERRRYDAY or you're a fool
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>>991036
I like this assessment. There are many roads and 99% of them lead to higher prices within a few years. The Saudis can't afford to give all their oil away for $30 a barrel. All they are trying to do is bankrupt the weak companies so they can have a less competition and higher profit margins 2 or 3 years from now. That and obviously the Russian thing too so its just a good time for them all around to lower prices.
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>>991036
>120 bbl
>that would be a sustainable path

If that is the eventual stablized price of oil there will be so much geopolitical instability in oil producers that the oil supply chain is going to break down.
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>>991194
Why
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Build a portfolio of E&P and Oil service equities, hold until 2020 and sell those whose price jumps as a result of buyout during that period.
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Is now the time? I'm looking at enbridge and some other dividend paying stocks. OPEC infighting is what I'm hoping for
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>>991625
>>991482
Go ahead
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>>991172
the Russian thing was unintentional too

they couldn't care less if it was Russia, Venezuela, Nigeria, etc. they just want to destroy any competition
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>>991637
USA wants to fuck with Russia because of Ukraine, and Saudi want to Fuck with Iran since the sanctions are up. It's the perfect ruse.
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>>991637
I don't think it was unintended. Aren't the Sunnis at war with Russia?
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Enbridge was up almost 2 bucks today guys
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>>990823
Saudi are unlikely to do that. They spend 10% of GDP on their military now to maintain their power in the region.

I'm heavy in arms and oil boys. :^)
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>>990863
>Can you explain the term artificial loss?
Bankruptcies and liquidations associated with risk from financing (debt) structure or production not capable of cutting a competitive profit margin in case the market determined price of exported goods and services (commodity prices including oil) decreases. Ultimately artificial loss can result in austerity.

>>990847
If commodity prices slide operating expenses may slide too granted the company doesn't expand operations. This is because things like pipelines become less expensive to build because the associated cost is reduced through cheaper iron, gas and other raw materials. This is why stronger currencies or weaker commodities can reduce production costs, because it's costs less currency to maintain the same level of production. Cheaper production can lead to reduced prices, especially when supply exceeds demand.
Thread posts: 53
Thread images: 10


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