June 20, 2023 | Daily JAM, Dividend Income, DVN, PXD, Videos |
Today’s Trend of the Week is Which is it? OK Growth in the U.S. or Not Great Growth Globally? The U.S. market is rallying and the rally even expand from the narrow nine stocks that have been driving up the indexes. The consensus is the U.S. economy will avoid a recession, the Fed will continue to pause rate hikes, and the U.S. economy as a whole is in decent shape. The problem is that the global economy presents a completely different story with asset values pricing in slowing growth. This shows up most clearly in oil prices, which have been in a downward trend. On June 13, West Texas Intermediate was selling below $70 a barrel, and Brent was down to 74.57. Goldman Sachs has cut its end-of-the-year oil price forecast by about 10%. This cut assumes continued lower demand from China and a supply glut, especially from Russia, as that country produces above agreed-upon caps in an effort to fund its war in Ukraine. If you own oil stocks right now, confirm that the ones in your portfolio can continue to make money at $70 a barrel (at least enough to cover dividends). I’d note the lowest cost source in the United States is in the Permian Basin. Companies like Pioneer National Resources and Devon Energy are focused on production from that region.
May 8, 2023 | Daily JAM, DVN, FANG, Jubak Picks, PXD, Videos |
This week’s Trend of the Week is Where is All That Oil Cash Going to Go? The likely answer: the Permian Basin and acquisitions. Oil companies like Exxon Mobil (XOM) are putting so much cash into the bank, they don’t know what to do with it. Exxon Mobil had $32.7 billion in cash in the bank. With little debt, and plenty left over after capital spending, dividends, and buybacks, the company is left with a tremendous amount of cash. Historically, extra cash could be used in oil exploration, which could take 5-15 years. In a global warming economy, that doesn’t make sense since we don’t know where oil prices and demand will be in the years ahead. The better option is acquisitions. One of the companies Exxon is rumored to be targeting is Pioneer Natural Resources (PXD) for their assets in the Permian Basin. Chevron (CVX) is in a similar position as Exxon and you can expect them to be in the market for Permian companies as well. Other Permian Basin companies that are ripe for being acquired are Devon Energy (DVN) and Diamondback Energy (FANG). I already have PXD and DVN in a portfolio in my JubakPicks Portfolio, and I’ll now be adding FANG as well.
April 6, 2023 | Daily JAM, DVN, GDX, GOLD, GOOG, Jubak Picks, Long Term, MSFT, PXD, SCHW |
I will add this post to the end of my post of the entire Special Report today. I’m also posting it here, however, as a stand-alone so you will get notice in your email box that Move #4 has gone up. Here’s what I posted for Move #4.
April 5, 2023 | Daily JAM, Dividend Income, DVN, Jubak Picks, Volatility |
Just in case there are readers who don’t watch my videos, but do follow my picks. Today, April 5, I added Devon Energy (DVN) to my Jubak Picks, Dividend, and Volatility Portfolios.
