Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Tom Winnifrith Reader Request Oilcast - 21 January

By Tom Winnifrith

21 January 2015 07:56

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In response to emails and tweets following my macro comments on investing in oil stocks yesterday HERE, in this podcast I look at: Afren, Ithaca Energy, Hurricane Energy, Mosman Oil & Gas, Fastnet and Sefton Resources and at the idea that there is already blood on oilie street - there is not!

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Comments

wildrides

21 January 2015, 16:29

Good to see you think well of FAST , as I bought some yesterday for the cash pile . I think they will return cash to share holders if the low oil price continues more than 6 months from now. Like you say ……. chairman comes across as very nice genuine bloke and capable deal seeker . The polar opposite of Bill “walmart” Keller infact . I found the SP video presentations very helpful with intuitive insight on this company . I like to watch the body language of the presenters and see if it is a match for what comes out of their mouths at the exact moment key statements are made . FAST chairman passed with flying colours , where as BK on a mining maven video failed the test miserably when talking up NEW a few years back .
Paul Curtis

22 January 2015, 01:21

Tom

I didn’t say there was blood on the streets. I said this is not like 2008 when there was total panic because no one knew whether financial system collapsing.

Please answer these two questions

1. Why have most oil shares bottomed (so far!) in December when oil over $60 despite oil falling sub $45 since then?

2. Why is oil hovering around $50 when supply/demand imbalance increasing and likely to max out Q2 2015?

Answer to both is that smart money doing what smart money does, anticipating what happens next. Hence I do not think we will get blood on the walls. Oil may take longer to bounce but the mindset is that the lower it goes and longer it stays low, the greater the bounce.

I will send you an interesting bit of research that presents the bull case. Bottom line is no one knows how quickly oil will bounce. US shale cash flows a mystery. Will Saudis cut (ignore everything they say, it’s a game of poker).

You damage your credibility by taking such a black/white prejudiced stance. It should be obvious that in any bombed out sector there will be bargains and this is especially true re oil where investors can buy tangible assets at large discount. The issue is buying companies that can survive. May not catch the bottom but medium term some great buys.
Richard

22 January 2015, 02:40

Thanks for the updates Tom.