Oil stocks have had a nasty few days and are snapping back today (for now anyway). If you own too many oil companies or MLPs you probably felt it this week. The names I own were for clients were down too.
If Wednesday and Thursday did make you sweat your energy holdings I would say you do have too much and I would tell you to sell 10%-15% of what you have right here while the group is having a good day.
This has nothing to do with the future of the sector but is about managing risk in a portfolio. The last few days were nasty. If you badly lagged this week that might mean you have too much. We learned what this group is capable of this week. Oil is about where I thought it could go, close to $60 (I wrote this several times). If I am wrong and it goes to $55 we may see more panic selling in the group. If you were uncomfortable with a drop to $61 you should be prepared for the next 10% down in the commodity to be worse on the stocks that what we have had thus far.
Again, this is about managing risk and volatility.
Wikinvest Wire
3 comments:
I unloaded ALL of my concentrated energy holdings last week. It's been a nice ride, but I need to get out now--while I still can! Of course, I still hold energy through broad based ETFs and mutuals, but I'm going to let those value managers figure out what to buy and sell at this point.
nice trade
For the unfrozen caveman investor: Time to buy NBR and NOV on the rig side, MIND as a multi year seismic leasing play and CHK or SWN for your mid continent gas production (especially if gas goes "down" to 10). Don't forget the coal (I like BTU, ALRP)
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