As stated in past posts, BEXP used their Q1 call guidance wisely, building Basin power outages in April into their near-term thinking. Most of the Street is likely to be sitting on the mid or just under it as the weather has not exactly been a quiet issue, first with snow melt and then with inordinate rainfall which eventually led to widespread road closures. But here's where BEXP shines in pointing out that while this may be a bump in the road, they haven't been simply wading about waiting for the great flood to recede ... and then the author provides four points....For investors, today is not the kind of day one looks at the value of one's portfolio.
The Gambler, Kenny Rogers: "... if you're gonna play the game, boy, you gotta learn to play it right. Know when to walk away, know when to run, you never count your money when you're sitting at the table. There will be time enough for countin' when the dealer's done ..."Today is the kind of day one looks at which shares are on sale. I personally use KOG as my "barometer" for the Bakken and when it hits $6.00 it's time to buy. Someone else suggested that to me, and trying to track all the other companies is way too hard.
The Bakken companies, unlike the farmers, are still putting in their seed corn in 2011.
2H11 will be outstanding for Bakken companies, and 2012 will be even better. But then I'm always looking through oil-covered glasses.
Bruce,
ReplyDeleteThanks for all of the info you post here. I read it every day!
One question to pose for you. What % of your net worth is related to Bakken assets? I'm as big of believer in the Bakken as anyone but remember that crazy things can and do happen.
I recently advised my mother to sell of her land located near Williston. Other than it being sold at more that what we could ever have dreamed of, it diversify's her asset base. Currently about 90% of her net worth is tied up in assets that benefit from continued success in the Bakken. If they were to have put in place regulations that severely impact these companies ability to frac, her net worth would likely be reduced by 75%.
The chances of that are slim but its not a risk we are willing to take. Using your poker analogy, she has won big and is cashing in about 50% of her chips!
I'll never forget the stories of the Enron retirees loosing everything to an event that most would have given a less than 1% probability of occuring.....
I would bet that my direct investment in the Bakken represents less than 5 percent of my total stock portfolio.
ReplyDeleteThe Bakken is just one of several opportunities in the market. Many of the Bakken companies do not pay dividends and I've generally preferred some dividends.
I divide my portfolio into two components: one component started years ago and managed by professionals (mutual funds, e.g.), and that probably represents 80 - 85%% of my stock portfolio.
The rest I manage myself, heavily weighted in oil but even that is fairly conservative -- large market cap companies, many paying dividends -- for the most part.
In the big scheme of things, following the Bakken is purely a hobby. But I have found that I take a much bigger interest (intellectual interest) in a hobby if I have something invested in it.
Also, in the big scheme of things, at best I am a mediocre investor. If I have succeeded, it is only because I invested regularly, conservatively, and stuck to a plan.
I did not take up golf and that gives me a lot of free time. Smile.
And, yes, you are correct. There is still a significant, uncontrollable risk regarding fracking regulations. Fortunately states like Pennsylvania probably need the revenue a lot more than North Dakota. I continue to see Pennsylvania as the canary in the coal mine. If Pennsylvania shuts down fracking, "Katie, bar the door."