RE:RE:RE:RE:RE:RE:RE:My hardest question for my BTE portfolioWith a purchase cost of $.50 at $5.00, it is 10 bagger. By selling 10% at $5.00 or a little bigger percentage at the current price you can get your principal investment out.
Everyone has a different approach, I have taken my principal out of the big bagger oil stocks that have multiplied. With profits still invited. It is a disciplined and prudent approach to pare down the position in a stock that has done extremely well and has become a bigger percentage of your portfolio. If one is invested in mostly oil then most stocks would have done well. Better to rotate into the laggards that may catch up and offer better relative growth.
Consider another sector that may offer better value or create a reserve fund for market opportunities. Idle funds are a big asset during a serious market correction.
The stock market is very unpredictable and one should be prepared for every possible scenario. with interest rates rising most likely markets will correct. The general markets are in a big bubble and the air will come out. it is a matter of time because some of the valuations are not realistic. Not talking about the oil sector.
If the market crashes or a major sell-off takes place it can create huge volatilty in oil prices too. Sector rotation is taking place and funds have started to move out of tech and are moving into oil and metals.
There is a lot of hype about the oil sector, Bank of America and Morgan Stanley are calling for $125 to $150 and pumping their book. On the other side, Standard Chartered & Bloomberg does not share the same very bullish opinion and says that oil production in the US may already be slipping into the surplus territory. WTI prices are influenced by the inventory data.
At $125 to $150 range oil prices are not sustainable in the long run. It will cause demand destruction, ruin the economies, clean energy will become viable with tax credits.
Saudi Arabia and UAE have substantial excess oil capacity most likely Saudis would not allow prices to stay $100 and allow US shales to come back they will like to maintain and increase their market shares. For a while, they had to cut about 6 million barrels a day. If the sanctions are removed from Iran more oil will come to the markets. Libyan production will come back sometime in the future.