Rambling On Investing Before I Take A Long Bike Ride -- May 1, 2023

Locator: 44509I.  

Updates

Later, 7:34 p.m. CT: link here. 

Original Post

Since the US will pretty much ban all crude oil by 2035, I am now re-looking at my rolling-30-year investment strategy as I start to "unload" all my energy holdings in an orderly fashion over the next five years. 

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All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source. 

I have a 40-30-20-5-5 investment strategy (BRK-Energy-Tech-Big Pharma-Daimler Truck). 

The "30" energy will now transition to: UNP, CAT, DE, which unfortunately make the 40-30 more like 70-20-5-5. We'll have to see. On the other hand, I've expanded well beyond just 20 holdings in my portfolio and maybe I need to get back to that. 

In addition, IRA RMDs are going to be a "killer." Lots of taxes but also an opportunity to re-allocate.

Maybe I need to talk to my nephew about his thoughts on tech over the next 30 years.

• The Street, 2021.
• Forbes, May, 2023.
• InvestorPlace, December, 2022.
  

I said I would never invest in GE, but the recent news out of Los Angeles regarding the ports of Los Angeles and Long Beach may change my mind. No hurry, but will watch closely.

Most interesting? T at InvestorPlace -- December, 2022, link above.

VMC is also interesting. The dividend yield is uninteresting, and the company has no moat from what I can tell but I will add VMC to the short list.

Later, in reply to a reader regarding the above note, not ready for prime-time:

1. Oil is already a commodity but will morph into what the "regulated" utilities do, or the cigarettes. No growth but great dividends for quite some time. 

2. China, for whatever reason, is already transitioning to EVs. Much faster than the rest of the world (Norway will be 100% EV but it's so small it won't matter). 

3. EU made the decision to go with EVs a long time ago, with or without Biden. 

4. Africa is a non-player. 

5. India is clearly moving to EVs. 

6. That leaves North and South America. I have no idea what South America is doing but it certainly doesn't seem good economically. 

7. So, North America. The west coast and the northeast have decided to go all in with electricity, again, with or without Biden. Texas, despite all the talk about oil, is putting in more and more wind. 

8. So, oil is not going away, it's just not a growth sector. Again, it's like a regulated utility or a tobacco company. 

9. If that is incorrect, and we go back to ICE and junk EVs completely, GM and Ford are doomed. GM is still playing both ICE and EV, but Ford has said it's going all in with EVs. 

10. That's why I suggested an "orderly" way of unloading oil; over several years, maybe a decade -- nice dividends but not much growth. If I'm wrong, I haven't bet the farm by unloading all oil all at once. 

11. There a lot of "open book tests" out there to watch: a. the EU's position on natural gas and EVs b. China's EV growth c. US west coast, northeast, and Texas.

12. I'm good with oil for another 30 years, but again, it's not going to be a growth sector. 

13. Everything changes if oil goes back to $100 on fundamentals and not geo-political risks or market manipulation by the Saudis.