I like CJ. How good is the business?I like CJ. I was initially attracted to its sensible, common sense approach of devoting 1/3 to debt repayment, 1/3 to growth and 1/3 to dividends. That's how I would run an oil company. Of course, the Canadian oil patch has its issues at the moment, but to me it will work itself out eventually. What do you think - is CJ good value? A good long term business to get involved in?
I question whether a bet against Canada is wise. To me, Canadian oil and gas companies are out of favour at the moment, but they're too good to be denied this nonsense in Ottawa for too much longer. Surely Canadians from coast to coast can see through flakey, feel-good politics and make the right choice. (i.e. pipelines will be built). I say they will and when they do, picking up CJ at this prices seems to me to be an amazing long term proposition. In my experience when trolling for long term value, you need a good business and you need a bit of controversy to get the price down attractive enough to enter. Otherwise you pay too much to enter.
When differentials blew out last fall, I started purchasing. It's always nerve wracking to see your purchase plummet so soon after buying. But that's what happens. I kept purchasing and averaged down to an average purchase price of $2.72. Did I catch a falling knife, did I buy too early? Depends on your investment horizon and whether you are a trader or an investor. To me, the timeline cut off which determines whether you are a trader or an investor, is 2 years. It's very difficult for a passive investor to "time the market", within this time span. However, if you trade, more power to you. I don't have the temperment/patience to do it. Too stressful! I do enjoy Kavern's posts though.
So what do you think - Is CJ good value for a buy and hold investor who has a horizon of say...5-10 years?