RE:It's not too late to buy oil for the OracleYes Obscure1, you know you are on the right track when Buffet sees the potential in oil E&P, and is following you into the energy trade by investing billions into Occidental even at these levels, not once but twice, even this late in the share run up.
Yet Suncor is trading at even more attractive valuations, has had a beat down worse than OXY, and it is on our side of the border with decades of reserves and refineries in place.
As far as SU call options go, to me they are far too expensive. The premium now is so ridiculously high at these VIX levels, I'm only interested in owning SU shares directly. It is far more cost effective to buy the shares and hold them, even on margin, than it is to give away so much money to theta by buying SU calls. A move up in Suncor would have to be at a far faster pace just to break even on the calls. Unlike others, it trades like a big tanker ship, heavy, stable, and steady. It offers balance for me as a core holding to the other more volatile names.
We are finishing this quarter in only 2 weeks, and bound to have an insanely high average oil price thta blows away Suncor's estimate, so buying well before earnings announcements would be prudent before everyone gets wind of just how profitable the energy sector now has become. Quadruple witching March 18 is now behind us in the rear view mirror.
I am at full margin, all in at present, holding 8 figures of oil stocks, up from 200k 2 years ago.
Obscure1 wrote: As hedge funds liquidate oil producers at near record rates, lo and behold, guess who's buying?
Berkshire Hathaway!
Berkshire Hathaway disclosed that it raised its stake in Occidental Petroleum to 14.6% with purchases of 18.1 million more shares this week. If BRK exercises its $60 warrants in the future, it will own 22%.
Something that I suspect most of us are thinking (other than Migraine) is whether it is too late to pick up shares in oil companies. We have heard Erik Nuttal talk about how we are just in the early stages of a super bull market for oil, but Erik is a bit of a promoter.
Now we see that BRK just bought another 18 million shares of OXY at an average of $54.41, which is up 94% from one year ago. One thing we all know is that Buffet is a stickler for buying value.
As much as I hate the thought of paying $39 for SU shares now when my average cost is $23, I'm convinced that it is time to add. If it is the right time to buy oil producers for The Oracle, the timing works for me.
The real question for me is:
Should I buy SU shares, or options? If the answer is options, which ones?
Migraine: are you out there or are you busy crushing life on the weekend???