Investing In "Oil" -- July 9, 2023

Locator: 45050INV.

When blogging about "investing in oil" on this blog, there are two timelines: a) near- to mid-term; and, b) long term.

Near- to mid-term: one to five years. Again, investing, not trading. I'm not a trader. 

These are definitions:

• investing: expectations that one's returns will be as good, if not better, than other sectors in which one could be invested. 
• trading: would be trying to make enough money to send Sophia to college by actively buying low, selling high, repeat, with cycles lasting one to six months.  This is not what I do. This is a definition
  

Long-term: a rolling 30-year horizon.

Theses:

• my long term thesis: over a rolling 30-year horizon, "oil" is a value play. "Oil" is in the same "bucket" with utilities, bonds, money market funds. Investing in "oil" for the long term seems a lot like re-arranging chairs on a cruise ship.  Long term, "we" will never run out affordable, accessible oil. Crude oil will always be "in demand," but "oil" growth will barely keep up with overall energy demand (renewable, fossil, hydro, nuclear).

• my short term thesis: "oil" remains a great trading sector; successful traders are nimble. Shares pretty much track the price of oil and economic cycles, the latter closely tied to "the Fed." Unlike other sectors I just don't see a lot of FOMO, YOLO, and/or MOJO. Saudi Arabia plays an outsized role in affecting the price of oil, but as time goes on, Saudi will play a smaller and smaller role.

• to put things in perspective: the current BRK is a value play but perhaps with a bit more growth than utilities, bonds, oil, and/or money market funds.
  

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Supporting My Theses
(Long Term and Long Term)

Theses:

• Saudi Arabia plays an outsized role in affecting the price of oil, but as time goes on, Saudi will play a smaller and smaller role.
• "we" will never run out of affordable, accessible crude oil. 
  

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