Earlier today I posted this but at the Avita board in error. Here it is, more appropriately offered. Please understand that NGL hadn't dropped so hard several hours earlier. I say this because I never expected the drop such as we now see. For the record, I nearly bought in at $6.53 today but thought better of it as I could see units dropping to something under $6 if Russia doesn't come on board with OPEC.
Also, nobody know where global finances are heading.
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(This was in response to srains' post.)
I love you, man, but I won't let that influence my call on oil.
Twenty-seven years ago I was an energy trader---almost exclusively. Sometimes I think I "feel" oil, silly as that sounds. Through the years I built my portfolio from $60K to more than 25 times that---with oil leading the way. Nice for a hobby.
We're now in the first wave of market response to not only the virus but also existential questioning of global economics and trend-setting.
We have no way of determining where things will be in the future just as we can't assume concluding dynamics with regard to eventual globally significant market impact. That said, investing in oil today isn't investing, in my opinion. It's hoping and praying and preying. Above all it's embracing risk as though desperate to cling to something regardless of good sense.
When you squeeze one end of a balloon the air either moves elsewhere---or it breaks.
I'm viewing the oil market right now in much the same way except---
I'm convinced it's breaking and bankruptcies will soon enough be the norm. As they move onto center stage, so will there be major impact on NGL.
I remember GM cracking under the strain, not so many years ago. I could believe we will be seeing major faults in the walls surrounding oil majors.
As for NGL, I've always loved the company as is well known here. That doesn't mean I trust the petrol market, however.
When I was an executive with the Boy Scouts of
America, I remember leading a Saturday biking trip on an adventure. A youngster showed up, asking if he could join us. He wasn't a member of the organization but I'd have welcomed him were it not for his lacking a helmet. His response comes to mind now---
"Well, I'll be careful so I'll be ok." I refused to allow him to participate. He didn't control auto drivers. NGL doesn't control oil majors or global finances or even domestic banks (creditors).
So it is with NGL-investing now---we can be as careful as all get-out. But NGL owes a lot of money. And creditors are going to be under enormous liquidity pressures from all sides. NGL can't control their lack of liquidity unless they carve out major chunks of debt. With unit prices so low, one would think this isn't the best time to invest, knowing full well that dots may just line up unfavorably for NGL. And as things go for the company, so will they for the investor.
Moral of the story:
I think a lot of us tend to look at NGL as an opportunity to bring in 20% or so without lifting a finger. But careful as WE MAY BE, the fact remains that THE COMPANY is no longer in control because it owes too much money to be calling its own shots.
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