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If the direction of oil is so predictable and obvious, why are you guys wasting time with non-leveraged things like XEG? When you know with such certainty where a price is going, you should use leverage.

In the last 6 months, XEG is up 73%. But UCO (leveraged oil ETF) is up 168%, more than double! And HOU (Horizons BetaPro oil) is up 185%

Those of you with the in-depth knowledge that lets you predict oil, have left a lot of money on the table. When it was so obvious and such a sure thing, why didn't you use UCO or HOU?

HNU -- leveraged natural gas -- is up 461% in the last year. Is that also an obvious and predictable commodity?
 

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If the direction of oil is so predictable and obvious, why are you guys wasting time with non-leveraged things like XEG? When you know with such certainty where a price is going, you should use leverage.

In the last 6 months, XEG is up 73%. But UCO (leveraged oil ETF) is up 168%, more than double! And HOU (Horizons BetaPro oil) is up 185%

Those of you with the in-depth knowledge that lets you predict oil, have left a lot of money on the table. When it was so obvious and such a sure thing, why didn't you use UCO or HOU?

HNU -- leveraged natural gas -- is up 461% in the last year. Is that also an obvious and predictable commodity?
The problem is that those leveraged ETFs are rebalanced daily. There is decay. So even though the opportunity is apparent, the exact date of when things will turn around is still unknown. What is known is that it WILL turn around, but we don't know exactly when.

Nobody wants to be decayed to death through a leveraged ETF. It adds an extra layer of risk.

But I guess if someone has the balls, then yes, a leveraged ETF would have increased risk and returns. But those products generally should not be held for days, weeks, months, years. They are meant for short term plays.
 

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If the direction of oil is so predictable and obvious, why are you guys wasting time with non-leveraged things like XEG? When you know with such certainty where a price is going, you should use leverage.

In the last 6 months, XEG is up 73%. But UCO (leveraged oil ETF) is up 168%, more than double! And HOU (Horizons BetaPro oil) is up 185%

Those of you with the in-depth knowledge that lets you predict oil, have left a lot of money on the table. When it was so obvious and such a sure thing, why didn't you use UCO or HOU?

HNU -- leveraged natural gas -- is up 461% in the last year. Is that also an obvious and predictable commodity?
There are many reasons to both take advantage of the oil market but avoid structural pitfalls. It is basic knowledge that oil is primarily a financial market, not a physical market. A typical barrel of oil is bought and sold 60+ times before it is actually delivered to the customer (i.e. refinery). Financial flows are not predictable and extremely volatile. So actually the best way to play oil, in my opinion, is with stable and long-dated assets, like Canadian oil sands or other oil producers, especially with low debt. Holding the underlying commodity itself with a time-expired contract doesn't make sense to me, and I don't have time to monitor such things daily. There are companies with 20-30+ years of cost-effective oil and natural gas reserves in the ground. Think of that leverage in a different sense.

Maybe I could have been more aggressive. But maybe the volatility would shake me off my conviction on a big drop. HOU dropped 45% from 8 March to 15 March and has not recovered while the XEG index continues to hit new highs.
 

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If the direction of oil is so predictable and obvious, why are you guys wasting time with non-leveraged things like XEG? When you know with such certainty where a price is going, you should use leverage.

In the last 6 months, XEG is up 73%. But UCO (leveraged oil ETF) is up 168%, more than double! And HOU (Horizons BetaPro oil) is up 185%

Those of you with the in-depth knowledge that lets you predict oil, have left a lot of money on the table. When it was so obvious and such a sure thing, why didn't you use UCO or HOU?

HNU -- leveraged natural gas -- is up 461% in the last year. Is that also an obvious and predictable commodity?
I have LEAPS in SU and XOM...

But agreed with J4B wholeheartedly. There is a lot of celebrating going on here in CMF for apparently "seeing the obvious no-brainer investment in energy in 2020 & 2021." Sure there was lots of entertaining analysis making a bull case, but everyone seems to think they have outsmarted Wall Street here... Not to belittle any CMFers and their abilities, but a few interesting statements about oil supply, low P/E's, FCF, industry knowledge, etc. are inadequate to conclude that you've seen through the fog of it all and made a wise investment...There's a lot of confirmation bias going on.

On the flip side - I remind myself that just because there are 6 guys on CMF talking about oil a lot it doesn't necessarily mean, though it might, that retail investors are getting too exuberant about energy. Looking for sentiment about if/when to exit energy is just as fraught with difficulty as when to buy.

Edit: to add the amateur analysis - WCS is at $133 Cad, and SSP is at $152 Cad currently... Wow!
 

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As I stated earlier in this thread a catalyst is always needed to shift sentiment from extreme pessimism to extreme optimism. Currently one can look back to several circumstances that triggered the current valuation. (Inflation, Ukraine invasion, China lockdown, decreased capex, etc.) It may take the removal of several of these items to shift sentiment the opposite direction. Or it could take one. I tend to pay attention to seasonality with commodities more than other stocks and will continue to monitor and evaluate. I would also note that many investors of 2020 didn't advertise their purchases until the oil bull was charging ahead. I am sure we will also hear after the crash of many that sold before "X" happened. I am not saying that people are required to share this information in real time nor do I disbelieve them. However, I attribute the hesitation to simple fear aversion. Many are afraid to be wrong, criticized or questioned and that is natural. However, if you go through the various posts you can see who was buying in 2020 and who was not. I for one, was not. I sat on my hands and missed a lot of the ride. I also deployed a bundle into banks, telcos, pipes and utilities during the pandemic selloff. As @peterk notes when to get out will be fraught with issues as well. Some will get out too soon, some too late and a few may identify when the time is right. We have to remember every seller needs a buyer and every buyer needs a seller.

edit: typo
 

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If the direction of oil is so predictable and obvious, why are you guys wasting time with non-leveraged things like XEG? When you know with such certainty where a price is going, you should use leverage.

In the last 6 months, XEG is up 73%. But UCO (leveraged oil ETF) is up 168%, more than double! And HOU (Horizons BetaPro oil) is up 185%

Those of you with the in-depth knowledge that lets you predict oil, have left a lot of money on the table. When it was so obvious and such a sure thing, why didn't you use UCO or HOU?

HNU -- leveraged natural gas -- is up 461% in the last year. Is that also an obvious and predictable commodity?
Well the term I used was "obvious investment" and the time frame was circa 2020. It does not imply a certainty of outcome but rather very high expected value - there is still x probability of $0 in the summation of the expected value. It also doesn't imply certainty of timeline or price path. My portfolio dropped 85% from year end 2019 to minima circa March 2020, and now stands up about 270% from year end 2019. So no, not interested in leveraged products.

After greater than 10 bagger results in many names, I am not calling oil a "most obvious investment" now, though chances still look awfully good.
 

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My portfolio dropped 85% from year end 2019 to minima circa March 2020, and now stands up about 270% from year end 2019.
Wait what?! What kind of portfolio do you have, I'm interested and curious. Those are big swings up and down!
 
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I am sorry to all the doomers here, but WTI futures bouncing back from NEGATIVE PRICING was really a no brainer. Yes it took massive balls to actually put the BUY order but it was the most logical thing to do.

Go take a look at the WTI 5y price chart here, i bough 2020-04-20:

Perfect timing or dumb luck ? I am still not sure :ROFLMAO:

PS: +3.4M as of today, its not even funny anymore.
 

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I am sorry to all the doomers here, but WTI futures bouncing back from NEGATIVE PRICING was really a no brainer. Yes it took massive balls to actually put the BUY order but it was the most logical thing to do.

Go take a look at the WTI 5y price chart here, i bough 2020-04-20:
No offense, but you may not being looking at the right catalysts though.

I also bought lots of stocks in April 2020, lots of energy. Many did.

But how much profit were you at with your XEG position from April 2020 to October 2020? Barely any.

At that time, no one could predict when would the energy bull run start. It could've gone nowhere for many months. It started on November, 2020. Because of the US elections? Probably not. Because of Pfizer and Biotech successfully completing phase 3 of the vaccine? Most likely.

I know pharmacists who timed the market much better than oil experts. They didn't waste their money on energy in April 2020, they understood it would be a tech euphoria because of people working at home, until a vaccine is found. They were in tech from April to October 2020 and then in energy as they understood clearly where we were in the different phases of the vaccines development.

If the vaccine studies weren't successful and the pandemic continued getting worse, maybe we'd still be all locked at home and energy would still be in the volatility range it experienced between April and October 2020.

Hope for the reopening of economy, the beginning of the end of the lockdowns started in November 2020.
 

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I am sorry to all the doomers here, but WTI futures bouncing back from NEGATIVE PRICING was really a no brainer. Yes it took massive balls to actually put the BUY order but it was the most logical thing to do.

Go take a look at the WTI 5y price chart here, i bough 2020-04-20:

Perfect timing or dumb luck ? I am still not sure :ROFLMAO:

PS: +3.4M as of today, its not even funny anymore.
The price of crude oil isn't a big deal If it stabilizes around 90 -100 dollars most of these companies produce enormous amounts of FCF at those prices and which will be spent on debt reductio, share buybacks and payments to shareholders. I figure over the next three or four quarters dividends and one time payments to shareholders will be quite generous. If the price stays at $120 or more the payments will be beyond belief.
 

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No offense, but you may not being looking at the right catalysts though.
Agreed but many biotech and tech stock are now priced equal or lower than their pre-pandemic levels. Bet like this are actually in two parts, knowing when to buy and.. when to sell !!! I dont claim to have any prescience or market timing skills, my core investing philosophy is still low-cost passive investing.
 

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Wait what?! What kind of portfolio do you have, I'm interested and curious. Those are big swings up and down!
80% oil and gas: BTE, PEY, OVV, SU. I was buying OVV starting mid to late 2019 between around IIRC $13-$20. At current ~ $74, doesn't look so bad, but it troughed out around $3. That is how one gets a -85%. I also loaded up more OVV in TFSAs and RRSPs at $3s while down ~85%. I bought BTE circa 2020 over 9 occasions at an average of $0.43 over 6 accounts (TFSA RRSP, margin) x2 to drop my ACB to $1.42. That and a few other moves is how one gets a +270%.
There has been some criticism elsewhere in the thread that "we" did not announce our moves circa 2020. I used to years ago explain why I do what I do, but there was no real interest, so I stopped. There are not many investors who step outside the conventional investing wisdom, so I am irrelevant.
 

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Agreed but many biotech and tech stock are now priced equal or lower than their pre-pandemic levels. Bet like this are actually in two parts, knowing when to buy and.. when to sell !!! I dont claim to have any prescience or market timing skills, my core investing philosophy is still low-cost passive investing.
I have the big techs, HD,Costco and Lowe's on my shortlist. When I move from energy I am fairly certain this group will get a lot of money. They will be here in 5 or 6 years and making a lot of profits. Sentiment isn't there friend right now but that will change in time. The material stocks for EVs is another group on my list. You can't be building 130 million EVs over the next 7 years without the materials needed to to manufacture these vehicles.
 

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It was not criticism, or at least it wasn't intended to be. As a long time member Hboy I am familiar with your contrarian history of buying stocks when they are not bruised but when they are beaten down. You have done amazingly well, but it does require a strong stomach and a lot of conviction. I even recall a few stocks that I bought that I thought were great value plays where you questioned (rightfully) my rationale. GSK comes to mind which has been dead money for me for many years. Many may not follow your style. As I recall you are willing to accumulate the unloved stocks and hold for years waiting for the pop. If memory serves me well WFG(or another lumber play) was one that you bought near the lows before the start of the last lumber bull. (not the recent covid run).
 

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There will be additional headwinds that could stall continued momentum in the oilsands players. Discounts to WTI are increasing as Mayan crude is ramping up and Venezuela crude may start increasing. Both of them are direct competitors to WCS in the Gulf Coast refining market. There are not that many refineries that can process heavy sour crudes cost effectively.

This weakness is one of the fallacies of how valuable (or not) Keystone XL would have been. WCS needs to find alternative refineries to the Gulf Coast and why I think TMX will likely prove to be more valuable than Keystone XL would have ever been. There are some Pacific rim refineries in need of heavier crudes, including the California coast that is suffering shortages of Bakersfield heavy and has to import.
 
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