Tried to be smart at the start of the year.
Updated
On 3 Jan I bought some RDSA stock expecting things to heat up in the ME since the Iranian General got drone striked in Irak. Also, there could have been another Benghazi situation in Irak.
Based on this news I decided to buy RDSA a dutch, vertically integrated oil giant that is not very exposed to the ME and could do well if the oil would be trading high. Moreover, after good econ data in the US worldwide econ growth seemed to be trending up or at least stable.
At that time WTI was double what it is today, 63 US.
Fast forward to today:
Now, well, shit hit the fan.💩
End of January we got news of the Wuhan Virus. 🦠🦠
the Wuhan virus has now put Italy on lockdown and travel is being cancelled all over Europe. not good for oil demand. 🛢
9th of march we see oil prices at 30 US.
This is because the OPEC cartel decided over the weekend not to cut production (to limit supply and hence get a better price).
RDSA would turn a nice profit at 60 USD oil. at 30 USD its not.
the current drawdown in position is now close to 42%. Quite painful.
Now the situation is very ugly and the Balance sheet is under pressure. Is buying the Dip a good Idea? Hard to say.
I do doubt that the buyback program or dividend will stay the same.
Another major oil company owned by mr. Buffet [OXY] has cut its dividend today from .79 to .11 (that is a solid 86% cut).
Based on this news I decided to buy RDSA a dutch, vertically integrated oil giant that is not very exposed to the ME and could do well if the oil would be trading high. Moreover, after good econ data in the US worldwide econ growth seemed to be trending up or at least stable.
At that time WTI was double what it is today, 63 US.
Fast forward to today:
Now, well, shit hit the fan.💩
End of January we got news of the Wuhan Virus. 🦠🦠
the Wuhan virus has now put Italy on lockdown and travel is being cancelled all over Europe. not good for oil demand. 🛢
9th of march we see oil prices at 30 US.
This is because the OPEC cartel decided over the weekend not to cut production (to limit supply and hence get a better price).
RDSA would turn a nice profit at 60 USD oil. at 30 USD its not.
the current drawdown in position is now close to 42%. Quite painful.
Now the situation is very ugly and the Balance sheet is under pressure. Is buying the Dip a good Idea? Hard to say.
I do doubt that the buyback program or dividend will stay the same.
Another major oil company owned by mr. Buffet [OXY] has cut its dividend today from .79 to .11 (that is a solid 86% cut).
Note
For those wondering, The purple line is a 200 day moving average (MA).
The Yellow line is a 50 day MA.
Clearly it's trading well below both these lines which is no good.
Note
Bought some more of this because This week was just too savage. The world ain't going to end because of Corona.
Amazing price. P/E of 7. It's ridiculous!
Bought a lot more at € 13,87.
Note
24/03 Maybe we got the bottom of RDSA. Maybe because nobody knows.
today the stock is up double digits, 12%. So perhaps that is a good sign.
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