ThanksAuto:
I typically invest in 3 companies and never more than 5.
When I was an analyst, the hours were long and the pressure was high. I don't think it s possible for an analyst to be dialed in on more than 1 industry. In that industry, the analyst typically deep dives on 1 or 2 companies or 3 at the very most. The analyst is required to follow all of the major players in that industry and you end up getting pretty efficient at covering everyone by applying tweaks to your base model.
The process works in a "you scratch my back and I'll scratch yours" relationship between analysts and the CFO's of the companies that they follow. There is simply not enough time for an analyst to get anything close to what needs to be done so the analyst ends up relying upon info that the CFO's spoon feed to the analysts. The trick is for the analyst to establish trust with the CFO. That means the analyst has to ask the right questions in the right way so that the CFO is not at risk of dispensing insider information. On the flip side, the CFO's real job (beyond the obvious) is to deliver the company message to the analysts in a way that makes their companies look good. As time and moves on and trust is built, each of the participants is able to do their jobs more effectively. The spoon feeding process is why you see so many generic comments from analysts following quarterly reports and why they all say pretty much the same thing.
I'm just not smart enough and I certainly don't have enough time to follow more than 3 companies. Even at that, I usually save my deep divea for 1 company at a time and have to rely upon the information available from others to fill in the gaps for the other two. If I end up with 4 or 5 stox in my portfolio, the 4th and 5th positions are typically much smaller in terms of percentage and they end up in my portfolio for different reasons. I really shouldn't invest in more than 3 but sometimes I find something that intrigues me or my interest originates from a referral from someone or some source that I trust.
My investment strategy is not for everyone. Heck, I only know a handful of people that use my strategy. I have found that when I focus on and stick to my strengths, the results work out pretty well. Maybe the success has a much to do with staying the helll away from what I don't know as much as focusing on what you think you know.
I never followed oil companies before investing in ENB a few years ago. ENB is not even an oil stock but it lead me to SU. I ended up selling ENB for a big win and putting the funds into SU at about $23 per share.
There are a few reasons why I exited SU recently:
* Oil is complicated by so many external factors that don't have anything to do with the company. No matter how much I dug into SU, I never felt comfortable that I had a good grip on the cause and effect of SU's moves.
* While I love SU's FCF picture, I don't think SU has a "go-forward" plan other than to milk its assets as hard as it can for as long as it can.
* Milking a cash flow cow is actually a decent plan, but the market doesn't like companies with that type of plan because the main reason to be a public company is to use the leverage of being public. While we as investors typically focus on the handful of stocks in our portfolios, there is a great big world of alternatives.
* Without a growth based strategic plan, SU's amazing FCF is wasted IMO
* I was hopeful that Elliott Mgmt would light a fire. It may still, but who knows when.
I think SU has a upside of 20% to 30% in the next few years. There is nothing wrong with that and coupled with a 4% yield, SU is probably a good hold for many portfolios.
With the market and oil being so volatile and a seemingly endless supply of macro news on the horizon, the risk reward ratio for SU stopped making sense for me.
To answer Auto's specific question about other EV companies, I have stuck my nose into a couple but Tesla's advantages are huge and growing by the day. The nonsense in the media about the how legacy competition is gaining is so far from the truth that it is laughable. That is the reason why I do my own research. We are just beginning to see the first cracks in the competition. GM and others are backing off their guidance, but the real news IMO is that Ford/VW announced last week that they are shutting down the multi-billion dollar investment in Argo AI and today we learned that the heart and sould of Common AI is stepping away. The media is not paying attention to the AI withdrawal announcements, but it should be because it is far more important industry news than anything else at this time. That is another reason why I do my own research.
I think it's time for me to exit this wonderful SU thread. I don't understand the many levels of complexity of the oil game and I think that I have anything of value to add about SU at this point. Most of all, I don't want to be that guy who writes negative stuff which just annoys the shite out of investors.
I will continue to read the thread as there are some great contibutors who share their experience and knowledge without an agenda. I expect that I will post from time to time (it might be an addiction for me) if I have something worthwhile to add.
GLTA and my sincere gratitude to all for the things I have learned here. Until next time!