Stock Trade Commentary
I am back from my vacation in the US (New Jersey) where I completely ignored the market (after all, it’s a vacation no?). During that time, markets collapsed, recovered and I missed a great buying opportunity. But I am not worried as we are not out of the woods yet, markets will most probably tumble again before they settle down. At least where I was, I did not see the end of the US unfolding, but that’s a narrow view of things since I was in a limited geographic area. I stand by my point of view: the US will be stuck in neutral (slow growth) for several months while the rest of the world (minus Europe) continues its economic growth. In this regard, oil prices will be sustained at a level where hopefully $80 a barrel constitutes a floor.
This brings us to Reliable Energy, one of my biggest holdings at the beginning of the year that turned out to be a very profitable investment. Time to get back in as these prices are similar to early December 2010’s level where the company had half the current production with similar oil prices. I have remained in contact with the company through the months and I am always aware of where they are in terms of their program. I strongly believe that on $80 oil the company can net $50 in profits which is why I am repositioning into high netback light oil plays like the Slave Point (Pinecrest Energy) and the Bakken.
Q2 results are due on August 29 if I am not mistaken. Markets might tumble again until then but that’s part of the risk an investor has to take. At this price level, I am getting the emerging Montana oil play for free. It’s a wild card that has good chances of achieving commercial oil production. I believe the operational update is going to be more interesting than the Q2 report (weather related delays, shut-in production etc’) especially when it comes to their end of year guidance. Hopefully, they won’t miss it this year’.
Have you bought any stocks lately?