Investing $, where is highest return?

[sahtt]

^^^ As far as oil, my question is how low will it go?
Is $65 enough to where Texas isn't making a profit? Or will it go lower?
I'm thinking now might be a good time to buy stocks like Exxon.

"UT energy experts: A cold war brews between Saudi Arabia and Texas"
"The fracking boom has pushed Saudi Arabia, the world’s cheapest major producer of hydrocarbons, to a very difficult choice. Either lose market share to upstart Texans, whose shale production is on the rise, or carpet-bomb the markets with cheap oil..."

http://www.dallasnews.com/opinion/l...-war-brews-between-saudi-arabia-and-texas.ece

Interestingly enough I took a mechanical engineering course with Michael Webber, one of the co-authors of that article, while in grad school at UT.

Keep in mind jond that you have to really dig into these firms to determine what impact oil has. Exxon, for instance, is a super major and has a giant refining division. More often than not these divisions crush it when crack spreads open up (think margins) as oil collapses and vice versa. I wouldn't be suprised if XOM and CVX have year over year declines in revenue of only 10-20%. They'll also be able to pick up assets at massive discounts as weaker players collapse or are forced to liquidate assets to pay interest on debt.

On the other hand, you've got firms like EOG and OAS that generate almost all their earnings from oil production and have costs between $35-65/bbl depending on the formation and drilling process used. EOG is the biggest operator in the Eagle Ford and profitability in the $40's has been cited. OAS is in the Bakken and they are getting the double whammy of poor prices and poor realized price differentials. In English this means the same quality oil is going for $13/bbl more in the Eagle Ford because Texas has a very strong pipeline network and combined with Louisiana is the largest refining area in the world while North Dakota's (Bakken) pipeline network is way underdeveloped and forcing oil to be moved on trains ($$) or with trucks ($$$).

All that being said, XOM is likely a buy below $90 if you have a long time horizon and understand the risks. I'd be looking for mid 80's but I'm cheap.

 

[jond]

^^ Awesome insights.
BTW, XOM is down ~3% today. Might hit your mid-80 number.

 

[RYU]

Anyone looking at LINE? I bought a small position on Monday. Stings a little today lol

 

[white98sh]

out of VNR down 10%! that'll teach me not to catch a falling knife!

 

[Vega$ NSX]

You know I think it's pretty cute how you guys quibble over 5-10% rate of returns and who can eek out that extra 1% over the next guy. That's small potatoes whereas I can pretty reliably get a 100%+ rate of return, all day and every day. All you got to do is go to a bar and order a shot. Down the shot and bet the bartender $100 that you can put the shot glass ten feet away, pee into it and not get a drop to land on the counter. Obviously he'll take the bet, so put the shot glass 10 feet down the counter and start peeing. Start shaking your hips wildly up and down and around to build up momentum and leverage. Chances are you'll get pee all over the bar, all over the counter and probably on the bartender. With a defeated look, pull $100 out of your pocket and give it to the bartender who will happily accept. Now all you have to do is before going to the counter, bet a bunch of people in the bar $300 that you can walk up to the bar, order a shot, and then pee all over the counter and bartender and he won't do a damn thing about it.

 

[EuroBoutique]

You know I think it's pretty cute how you guys quibble over 5-10% rate of returns and who can eek out that extra 1% over the next guy. That's small potatoes whereas I can pretty reliably get a 100%+ rate of return, all day and every day. All you got to do is go to a bar and order a shot. Down the shot and bet the bartender $100 that you can put the shot glass ten feet away, pee into it and not get a drop to land on the counter. Obviously he'll take the bet, so put the shot glass 10 feet down the counter and start peeing. Start shaking your hips wildly up and down and around to build up momentum and leverage. Chances are you'll get pee all over the bar, all over the counter and probably on the bartender. With a defeated look, pull $100 out of your pocket and give it to the bartender who will happily accept. Now all you have to do is before going to the counter, bet a bunch of people in the bar $300 that you can walk up to the bar, order a shot, and then pee all over the counter and bartender and he won't do a damn thing about it.

LOL, except this only works if you can drink. I have a shot and will turn red and then angry


Serious note, Capital one is offering $500 for opening a new deposit account if you put in $50k new money for 90 days. Not bad...

 

[RYU]

LOL, except this only works if you can drink. I have a shot and will turn red and then angry


Serious note, Capital one is offering $500 for opening a new deposit account if you put in $50k new money for 90 days. Not bad...

That's a 4% annualized return on your $50k. You can do better than that.... Don't fall for the marketing spin though a $500 upfront value is better than getting the $500 at the end of 90days.

This is what I use call options for.