Post by
Experienced on Jun 08, 2024 9:43am
Some Thought Part 3
Suncor
A while back I posted that my opinion on investing in SU was related to taking advantage of price inefficiences in the market. The key one being the price of oil being lower than all-in cost of Saudi production which includes paying for the social programs to keep the House of Saud in power. I guess if anything, I could be criticized for not following my own advice and buying into SU and taking advantage of the subsequent rise in the SP. In fairness to myself, I used those funds to successfully invest elsewhere. Those that bought or held SU in this timeframe did quite well and kudos.
To me for oil investors, there are a number of questions which need to be considered even in the shorter run. These questions are relevant no matter where one choses to put their investment dollars. The main question is - "What are the catalysts for growth in the business ?"
From a growth perspective, for SU the determninants are an increase in production, lower costs of production and higher price for oil. To make an informed decision, one needs to look at all these factors and then compare them to alternative places to put your money at the same level of risk. After all, why are we investing? - To make money of course!!
Looking at things this way is what I call being a pragmatic investor.