USA Today: "Oil is riskiest investment". But is it?

Discussion in 'Politics Discussion' started by eddiemoneys, Jan 23, 2016.

  1. eddiemoneys

    eddiemoneys Well-Known Member

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    www .usatoday.com/story/money/markets/2016/01/23/riskiest-oil-stock-in-world/79105742/

    "As the stock and commodities markets continue trying to make paupers of energy investors everywhere, many investors are undoubtedly unnerved by the volatility. Yet for all of the sound and fury of the markets, many oil companies from Exxon to Devon actually remain in relatively good shape even if this quarter’s earnings will be pretty rough."
     
  2. petesede

    petesede Guest

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    Big oil will be fine. I have said this before. One of the benefits of this crisis is that ´our´ oil companies will do much better than Saudi Arabia, Russia, and Venezuela. It is one of the truths that we all know. Capitalism is better than state-run organizations. Our companies are more nimble and more likely to adjust rapidly than state-owned companies. Some small cap companies may not survive the problems, but even then some of them will be bought out by big oil at deep discounts, which again will make things easier for big oil going forward.

    I have a couple plays with oil that I am going to jump into soon, one of them is big oil companies ( airlines and freight are another). I am waiting for some word out of Saudi that they are definitely ruling out a special open meetings. I think when the Saudis finally say there will be no special meeting, oil prices will drop quickly, and then that is going to be the bottom.
     
  3. gracer

    gracer Senior Investor

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    I think that despite the downfall of oil prices recently, the big energy investors can foresee that this is just but temporary and when prices will go up again and demands will rise again, they will definitely gain big from the low buying price they have invested today. Oil is one of our basic commodities. Anywhere you go in the world, oil is very important in just about everything. We need it for transportation, electrical generation, basic household uses etc. I'm not an expert when it comes to oil trades and investments but I think oil is still a pretty good deal of investment.
     
  4. crimsonghost747

    crimsonghost747 Senior Investor

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    Just a tiny tiny correction. Oil is basically not used for electricity except in some very special cases. It's simply cheaper to use coal. In the USA less than 1% of electricity is generated by oil, in most countries it's pretty much zero.
     
  5. Susimi

    Susimi Senior Investor

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    With it's low price at the moment it might be a good idea to put some money in but then again it could fall further and I believe some people are predicting it to.

    Personally I'm staying clear of it for the time being.
     
  6. daveM

    daveM Member

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    As I see it..... best to wait for a while as oil is not something that can be forecast. Too many political factors affecting the market at this time
     
  7. JR Ewing

    JR Ewing Super Moderator Staff Member

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    GENERALLY, when the mainstream starts to say that this or that is the "riskiest" or worst investment or is doomed or whatever, that's usually a good indicator that said investment is hitting a bottom and is poised for a recovery. :D

    Of course all indications are that the commodities that these investments are tied to (mainly crude) are currently experiencing excesses in supply and a somewhat reduced demand, and MAY stay down for at least a little while longer.

    The world is filled with monday morning quarterbacks who will make predictions that a commodity, company, industry, or sector is doomed AFTER it has fallen 80%. Where were they a year and a half ago when it was at a 6 year high? Where were the predictions that oil would never hit $80 again when it crossed $80 on the way down to $30 a year ago? We don't hear those predictions until a year later when oil is at $30.

    Best to stay diversified - not too much money in any one company, sector, or industry.
     
  8. Ohh22

    Ohh22 Member

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    Personally, I'm speaking from a view in Canada. Our economy that we have right now with oil is absolutely appalling. The USD to CAD rate is about $1.40. That's insane! I think our PM should be doing more.
     
    Last edited by a moderator: Jul 8, 2016
  9. anders

    anders Well-Known Member

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    If you're thinking about buying into oil right now, you'll need to carefully assess how long you can sit on your holdings for. I'm actually starting to change my mind about this now, and I think this could be a good investment for a lot of people. Oil is too fundamental to modern life and the prosperity of western nations for it be decimated as a stock. It'll recover, it's just a matter of when.....
     
  10. pwarbi

    pwarbi Senior Investor

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    With the price if oil being so low, I'm also under the impression that it might be a good investment rather than a poor one as I think the price will have to start to bounce back up sometime and I think that could be in the near future.
     
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