The market is often irrational; ie the sky is falling. Most folks are short term buyers and thinkers. Thus gasoline today I passed at 2.19 WILL cause goobers to buy gas hog trucks and cars again. ie since gas is cheaper and will be forever! :) Folks with big gas tanks are just buying enough for a few days to a week since tommorow gas has to be cheaper. Yes energies could drop more and be like bank crater prices of 08/09; only time will tell. It is happy days here in the poorest state since gasoline is SIX to SEVEN perecent of some folks incomes; thus a giant raise that might boost retail spending. Talk locally is gasoline will under 2 bucks by 2015 if not sooner
There was so much money that they would go to Home Depot and leave their dually giant trucks idling with the AC on for an hour or two . Guys raking in 10 to 40k per month in storm cleanup and repairs would buy all new equipment and be declaring bankruptcy in 8 months to a few years.
We had an old UNUSED 120 gallon commercial hot water heater to be removed and capped and NOBODY could give me a price. i.e. is it 100, 200, 400, 800, 1600, 3200 bucks? They wanted 150 to 300 per hour with NO limit on the time. ie tYou have them actually look a the item to be removed and they cannot tell you the price; even by a factor or 2 or 4
Work was so available that contractors did not have to bid or estimate and you would have to wait in line to get an open ended cost job. i.e. totally insane. In AC work contractors would bid out 3000 to 5000 bucks per ton of AC. i.e. guy across the street paid 20k for a 5 ton Goodman AC unit to be installed and the contractor left the old air handler in the attic and the folks prepaid one half i.e. 10k just to get them to show up and do the job in 2 months.
In roofing work in Katrina land many roofs leaked after a few years, they cheated on the flashing and the contractors were all long gone or bankrupt.
Boom Bust has its ups and downs in prices. In AC work one had folks here paying 20 to 25k for a Goodman 5 ton package that is 1000 to 1500 bucks. They brazed up the units to the old lines and often used the same old A coil and the units were miss matched
As a comparison look at post Katrina contractor Boom/Bust/Bankruptcy behavior. Every bloody chap became a contractor after Katrina in our area due to the shortage and massive rebuilding. Prices went crazy.
Then several years later the work tapered off and thus a glut of contractor dudes who could not even estimate building costs. They were use to the easy money, prepaid in advance stuff, use to the giant markups and bribes to be higher on the list.
At the peak old folks prepaid for roofing work since the neighbor had Joe Contractor do his roof; then the con ended with many folks with half finished roofs and the contractors off in Florida on the run. Or other contractors got liens on the houses and played monopoly and conned out old folks for their houses via massive bills 5 times higher than normal.
Then at the bust many Contractors went bankrupt or did jobs below cost just to get cash flow to pay the debt on their equipment. The easy money ended and some left the area; others just whined at having to actually be in line with reality. Neighbors who you would not want to install a birdhouse instantly became post Katrina contractor experts. They see you on your roof and tell you your 1/2 plywood is really 3/8's. i.e. zero experience dolts who are now subbing out roofing as experts.
Calling a bottom is a fun game but often wrong. Much depends on the barrel price hitting a bottom, and it has not yet done so. The lower oil price for a long time makes the stock risk much higher. Folks on this board over the last 6 months have thrown out numbers of a bottom of 7.5,8,10, 3, 25, 33, 1.5, 2, ZERO, 9, 16, 20. i.e. about any number you want. Basically it is all guessing, i.e. no science, no magical ball to guess a bottom. One is dealing with too many unknowns like the barrel price in the future, PLUS fear of Mr Market and folks fear that the stock will be worthless, or go to 50 in 2 to 5 years. Much of the price is herd behavior like a pack of birds flying and has nothing to do with finance. The company has much debt thus a risk if oil is low for many years.
Look a the local bottom of ARLP from Oct 14 to 15 2014 if you want to see some odd Emotional selling
With oil down I know rigs that will be mothballed and capped off and the cash flow will go to zero. Then my buddy who had gobs of spending money will be like a person who lost his job and stop spending. His 2 tiny old wells are not viable at the current low prices and thus the end until the oil barrel price goes back into the 80 plus range. There are gobs of these old wells that are marginal and the current drop means the end of the Jed Clampett era for many folks. These old wells were dropped by the majors eons ago and tiny oil guys restarted them when oil went high. Now it is a recession for many folks in the deep south; the end of the oil boom, ie a depression. There are entire cities whose industry is oil and an oil depression even ripples into the housing market. I know home builders in the cajun state that are reducing building of homes due to this bust; ie depression.
They also said in the late 1960's and said early 1970's that we would all freeze. Ie global cooling. One solution was a dirty dusty nuke on the poles to cause warming via jackassery.
They said we would run out of oil 100 years ago too.
I mentioned as a moderator on a major photo site that cellphones would one day displace point and shoot cameras and video cameras and got massive hate; called nuts. Peanut gallery said stupid and will NEVER happen!
The math is such a 4 buck a year dividend could by all the stock if it was 4 bucks in 1 year
The math is such a 4 buck a year dividend could by all the stock if it was 8 bucks in 2 years
The math is such a 4 buck a year dividend could by all the stock if it was 12 bucks in 3 years
Smallest share volume since Nov 25 and the stock only dropped 10 cents
Yea; oil is going to zero and everybody will be driving solar powered cars too