My sense right now on Monday, 3/23/20 before the market open has me thinking it is absolutely crazy to be invested in ANY oil & gas stock at this time.
This time is as unfamiliar as could be, even for the most sophisticated, astute investing analysts out there. While I'm not equal to that elitist group, my instincts are pulling together and sensibly warning me of threats.
I cannot afford to ignore potentials staring at me. Mind you, I have no debt and have a little free cash that could easily be used to strengthen existing stock positions or launch new ones. Nevertheless, without profit-based patterns emerging, how do we justify committing available cash to fanciful dreams of gaining leverage in a market not yet even barely swooning?
When you can't see the road ahead, you sure as Hell don't hold a steering wheel! One day a stock falls, the next it rises surprisingly. Is that a sensible investing thesis?
Bankruptcies have yet to start in the oil patch. But we know they will for they must. Any company holding debt without real (not borrowed) cash reserves to bail themselves out of debt is going to be at the most severe existential risk because banks will be straining to survive, themselves.
If I held NGL units now, I'd be selling out of the gate this morning.
Trusting that all will be fine is comparable to the Tooth Fairy's rewarding you for a tooth that fell out from natural causes. The Corona virus and Russia-Saudi fighting will do far more than knock out a tooth!
I'd sell out entirely and hold onto that cash for dear life. If possible I'd put it to work when the all-clear is sounded and we have solid reason to believe the future is growing brighter. And I'd put it to work where the field is cleared of political debate and devastating illness such as we see now.
Investing today is the nutziest move one could make, in my opinion. But nobody is asking me for my opinion so I guess I'm done.
It does hurt, though, seeing some here defending distributions that may not even come to pass for a considerable time. Worse---oil may drop to $10 or even below that before things show signs of improving. We retailers are not in control of anything! But we can limit the terms of our engagement.
I wish everybody here well. But I am saddened for these are the worst of times.
AI
