I would be very cautious investing in oil and gas at present. Having said this, I recently put money on $Exxon Mobil(XOM)$ , $Chevron(CVX)$ and a few Canadian oil and gas stocks. I've also been in $Venture Global, Inc.(VG)$ for a while now, but for different reasons... massive growth potential there.
So I've been getting into oil and gas stocks because I saw a nice cyclical play there. Over time I saw it as a smoothing hedge to my more volatile stocks. I had a plan to just DCA into them over the next year. The over the weekend missles started flying. This could cause oil shortages short term. That mite put pressure on oil prices short term.
Will crude break $100? Doubtful it will go that high, but if it does I'm out. That's because my original investment thesis is destroyed. If you look at historic price action of oil during conflicts, like the gulf war, Russian invasion of crimea, then the invasion of Ukraine, there is a pattern. Oil starts to tick up on early signs of conflict, and that's exactly what's happened. When bombs start flying oil Prices spike. But that spike lasts weeks, because oil supply channels adapt quickly.
Buying oil stocks right now in my personal opinion mite result in a very short term gain. Do not FOMO it. More likely, you will get in too high and miss the correction downward. Then you are a bag holder.
I was only starting a position, everything is up at least 10%, nice in less than a month. But not why I invested. I invested for stability in my portfolio. Now that's not the potential reality. Not selling anything yet, but if it spikes I'm out because oil and gas stocks no longer fit with why I brought them. I will sell the spike and come back after the spike reverses. And it will reverse fast.
If you want to profit from this latest absolutely senseless war. Don't play oil and gas. its a single catalyst that will correct fast. Instead go gold and silver. way more catalysts their, I mentioned four in yesterday's post that are way more compelling.
Or go even longer... buy defense stocks. They are the only winners in a war. america depleats their stockpiles. 5 million dollars a pop for the ones we see launching off the battleships I believe, and production is only like 600 units a year. Not sure if it's Northrop or Lockheed that makes them. In any case, this is way outside my wheelhouse. And its definitely is outside my moral investment compass. but that would be the best investment play going forward I guess. Not for me though.
Happy trading my fellow tigers. Hopefully I gave you a few ideas to explore, EI out.
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