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Msg  297922 of 298818  at  11/21/2020 11:59:37 AM  by


The following message was updated on 11/21/2020 1:29:59 PM.

About a year ago...

  Last year as my wife and I  were heading down to Florida in December I was looking forward to taking some profits on my positions, energy looked overbought to me, we had a pretty good run end of year. I had to wait to Dec 30th to do some selling to roll the cap gains to the 2020 tax year though.  I posted about that selling back then,  had no idea what was coming for 2020 at the time, wasn't long after this post that the view changed dramatically....
  Took a look  back at some of the pricing in around that time just recently as I wanted to establish some reasonable targets, look at risk vs reward , upside for some names in my energy holdings. I track a lot of this info on spreadsheets over time.  I chose Dec 19th, 2019  as the price date below ,  the Xmas break is low liquidity and not typical, most of these stocks were actually higher by Dec 30th. I note that oil was in around $58-59 at that point.  Here some prices on those stocks back then, then upside to that price from one year ago as compared to today's prices.
Whitecap - then $5.37 now $3.42  upside 57%
Meg  - then  $7.39 now $3.34  upside 120%
Freehold - then $7.25 now $4.65  upside 56%
on the infrastructure/midstream  side of energy :
Pembina - then $48.37 now $31.80 upside 52%
Keyera - then $33.86 now $21.53 upside  57%
  My contention since the March crash was  that a lot of money could be made with just a reversion to the mean in oil pricing. Those buys last March I felt were low risk, just a matter of time. The average price of WTI crude oil was $57 per barrel in 2019 compared to $64 in 2018.  What are the odds we don't go back there at least? Now the Permian has been dealt with strikes me as a pretty sure bet over time.
  I am invested with the view over the next year we will return those levels, maybe more but that would be just a bonus. Whitecap and Meg have tripled off the bottom in March, others doubled,  more to go.  If as Jeff Currie from GS suggests we are heading into a super cycle in commodities then much more to go.  Canadian energy looks very attractive relative to other sectors,  countries.  2021 is going to be so different than 2020. Now with the vaccines near at hand we just need to hurry up and wait.

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