Enron was an outlier. The odds of this happening to CBI are the same as it happening to GOOG, MSFT, or GE. You won't know it until it happens. That's the nature of massive fraud. It doesn't come with signals.
Anyway, you clearly are trolling, n16m15. Nothing you say is constructive.
Good post. I also am planning to average down. I have to at $61.50/share. As with you, it's a question of when.
I'm going to probably wait for oil to stabilize. Right or wrong, that's what the street correlates to CBI earnings. And once it stabilizes, I give it 12 - 18 months for oil to sell at optimal prices.
Besides, CBI was always going to be at least a 5 year hold for me.
There is no rational basis for predicting such prices. The only thing for sure is that CBI and many companies associated with energy are volatile. Prices can swing either way.
The only surety is that oil prices will recover. And that price must track earnings. So it's a matter of time before CBI comes back to value. Nobody can predict exactly when. But I'd say the odds are high that the price will recover in the next 12 - 18 months.
Make your bets accordingly. At least as an investor. As a trader...you'll need the luck that always factors large in trading. All the best.
I think I'm going to pull the trigger 1 more time. $10k. I need to average down from my current $61.50/share average. Berkshire and Van Den Berg are with me, so at least I'm in good company.
I can't see this being a falling knife. I obviously could be wrong. But this has the signs of classic overselling on a value play.
Patience is required. Nobody could have forecast the outlier of an oil price war. Nor the depth of market irrationality in response.
I'm definitely going to now average down. I really have little choice when my average share price is $61.50.
I remain confident in the longer term. I have little doubt this will be well north of $65 in, at most, 18 months. This is a value investment. Not a trading stock...not that I trade anyway.
All the best.
I think we're in the worst of it. I can't see oil going down much more. OPEC probably will have another emergency meeting in the next few months. They're really hurting now.
It will take some time to flesh out. But I believe oil will again be $100/barrel within 12 - 18 months. No important commodity falls so dramatically and stays there for long. Not in the face of growing overall energy demand.
It's a matter of time...and financial runway.
It's not an easy decision. Save AAPL and GLW, I've not committed so much basis to a single position. Another $10k would be a new records for me.
I invested in DVN & RDS-B with CBI. I also have older holdings in AA, AWK, DOW, DNOW, NOV, & TRN. All are energy-manufacturing-transportation stocks where I've done very well. So it helps cushion the damage I currently have with CBI.
I might have 1 more average down left in CBI.
I own 425 shares of CBI averaged at $61.50. Obviously I am down about 30% right now. I have a long term outlook and remain confident.
But I'm looking to perhaps average down again. I've committed ~$26k in basis. I am contemplating another $10k. Does anybody have thoughts on $43 being a near bottom? Is the pain about done, which I think is mostly associated with the apparent oil price war? I'm thinking the Saudis cannot sustain low oil for 6 months without some serious pain...and that North American energy is too well capitalized, optimized, and supported to fail longer term.
Thanks in advance.
Nah. I'm averaged in at $16.97, 920.772 shares total. I bought in Aug 2007 at $16.53, Nov 2007 at 13.10, & Oct 2014 at $36.13. I've been reinvesting dividends the whole time.
I'm up very nicely. 112% overall, but more importantly, a 17.96% CAGR. It should get even better, given the serious alpha in this undervalued stock. Right now it's enduring a perfect storm of negative circumstances. These include:
1) The oil crash.
2) Legislation on rail transportation of fuel.
3) The guardrail lawsuit.
#3 remains a serious wild card. Otherwise, I'd easily back up the truck on TRN. Oil will get back to $100/barrel within 12 - 18 months. A North American energy, manufacturing, & transportation renaissance should continue.
TRN is well situated in all of this. Again, it remains to be seen if the lawsuit has merit. And if it does, how much will be assessed. So far I'm gambling that it won't be too bad...as I think overall TRN is a great company with well meaning management...as well as the physics of guardrail safety actually being nebulous.
I remain a hold. But it sure is frustrating. I didn't think oil would take such a dive. The Saudis are going for broke with their price war.
Still, oil will recover. It only now requires more patience.
It's the irrationality of the herd. There's a reason for that infamous term. This herd mentality plays itself out across all things in life...especially investing.
Look at life. People vote along partisan lines, irrespective of actually character & performance. Consumer behavior is so much a function of celebrity influence. Why should it be any different for investing?
Even intelligent folks are part of the herd. You'd be surprised how many doctors, lawyers, and business owners hand their money over to hedge funds. They really think they're getting a deal. Never mind investors of lower means who keep handing over their money to mutual fund managers...managers whom act on analyst recommendations.
As we discussed, be one of the black sheep. Market manipulation is short term noise. Warren Buffett, Benjamin Graham, & Jack Bogle offer perfect methods for profiting from all of this...quite literally, by buying low and selling high...but preferably owning great companies bought at value, forever.
We'll see in year or so. But something tells me CBI will surge even before this. Let alone 3 - 5 years from now. This is the kind of opportunity that separates skilled investors versus sentiment driven or unwitting speculators.
All the best.
It is a scam. But one enabled by the average retail investor. Mutual fund managers are most responsible for the price actions, all too often following market manipulating analyst recommendations. The retail investor sits passively by.
I've seen this all my investing life. It's not going to change. As I said in other posts, an astute retail investor can only wait patiently...reducing all this short term gamesmanship to noise.
I don't like the 5% decline today. But in 20 years of investing, this is old hat. Analysts routinely downgrade, often to get their interests in at a lower price. It is what it is.
Goldman can and will continue to play short term games. They and other so called "smart money" elements will abuse retail investors, often in collusion with mutual funds. But as I discussed in other posts, value investments have time on their side.
The disciplined value investor understands 1 key concept: price must track earnings. Give it time folks. We'll come to value with CBI.
Just remember, the PE can even stay the same while the price rises...as long as earnings rise.
I expect the earnings growth to accelerate, offering a more compelling PEG. Then the PE should move to supported levels. Either way, returns should significantly outperform the S&P500...which is my ultimate goal.
I didn't say when. A good value investor never does. Only that it will...as price must eventually track earnings.
And just like you, I have a 3 - 5 year horizon for my value investments. Mind you, I don't believe it will take that long. Energy fundamentals are excellent. I think the PE will normalize before a 3 point.
All the best.
Slow but steady. I'm only down 6% now. Not a big deal.
I'll checkpoint by mid 2015. I expect to be in the plus by then. I expect at some point that the PE should be 18.
I am very confident of this.
I'm a fairly significant energy investor. DVN, CBI, TRN, NOV, DNOW, CNI, AWK, RDS.B, & DOW. I've long bet on secular trends in energy, especially North American. Pretty successfully so far.
I get that dirty coal must be replaced. But it's nebulous just which technology will do it most. Proven natural gas, nuclear, & oil vie with, let's face it, tenuous solar technologies. The verdict is out on solar in general, at least for it being a significant energy component for a decade.
Within this challenged solar milieu, you have strong companies like FSLR experiencing serious volatility. This for me is the best of breed solar company. A history of growing revenue, cash flow, & balance sheets...everything that GTAT isn't.
Sorry, but I see no compelling reason to bet on GTAT. In fact, the sordid management team alone is reason to keep me away. The beat continues with GTAT...just another emergent company with a dishonest management team trying to spin their way into even more illicitly earned wealth.
Just so you know, I've long been a regular poster. I actually managed to get out of GTAT with a decent profit. But as is obvious, I condemn the management team...for fleecing a lot of good folks out of hard earned wealth.
How anybody can pump this con game of a company...especially in light of what happened...is beyond me.