As a trader, you can sometimes
get so frustrated with the market that you will do something impulsive – and stupid.
Ti can come on suddenly, and make
you move to double or triple down on stocks that are truly horrible and not
likely to reward you, no matter how much commitment you have.
With oil stocks not reacting very
positively to oil prices, that instinct can be strong, as the disconnect
between the two is truly unprecedented.
With oil prices well above $64 a
barrel here in the US (above $70 for the more global Brent benchmark), most oil
stocks should be roaring.
But they are not. In fact, some
of the biggest oil companies – like Exxon – are at price levels concurrent to
when oil was trading nearer to $40 a barrel, not $70.
Mobil was also trading in the low
$70’s and oil was at $40 a barrel, all of the major oil companies were dealing
with maintaining dividends while slashing capex and debt at the same time.
It would seem, even forgetting
about the added profits of $70 oil versus %40, that cash flow was a far tougher
problem then. With nearly 3 years of hardship behind.
