[GregWeld]

I've written about watching for "FUNDAMENTAL CHANGES" in the stocks you own. While minor ups and downs and rolling with the punches - is what a business NEEDS to do... Often if not done well/correctly - you'll see a change in leadership... which can be a "fundamental change" (Let's use the example of when Steve Jobs came back to Apple! Or when Microsoft gave Ballmer the boot) Sometimes it's just age and personal issues. Here's the point... (There's a couple actually)

I NEED to pay attention to the companies I invest in. This is one of the reasons I generally urge people not to get spread too thin in an effort to "diversify". You can't keep your eye on that many balls (no pun intended). 20 or so companies is A LOT....

I own Conoco-Phillips (COP). It's a small holding (5000 shares) - bought more recently in an effort to position myself for decent dividends while HOPING that oil stabilizes and makes a come back in the future. I don't know what's going to happen in the future - so when making "bets" like this... I "dabble". I buy a little - if it works - I may buy a little more... etc. Right now I'm 50 grand down in this holding. I'm patient. I can afford to be down and I've been doing it long enough to have gained some confidence in my reasoning. When I buy - I EXPECT my pick to go down. I generally never chase the big front runners (The Allibaba's and GoPro's etc)... I like to pick good companies that might be down due to circumstances that are not of their own making. This is harder for newbies to do - sometimes doesn't work well - and it's not what I'm suggesting for you all to do. It's scary and cause's ulcers. I'm in a much different space than "most" and can tolerate investments like this.

Here's where the "Fundamental change" comes into the discussion. COP reported earnings this morning. I pay attention to such things. I try to find the "nuggets" which may or may not make my thinking change. Sometimes the nugget of info is a ho hum - sometimes it's an OMG REALLY? I'm selling - and sometimes it's an "okay then - that seems like a smart move to me" and I'll add to a position. Sometimes it pays to just be a holder and do nothing and see how it plays out. But KNOWING what's going on is important! And you need to be minimally aware of what's going on with your holdings!

Here's what I liked about the COP "change" today... And I'm not saying anyone should buy or sell -- I'm just using this as an example of what I mean by FUNDAMENTAL changes.


Copy and pasted....

Selling Assets
Lance has reshaped the one-time energy conglomerate, selling more than $14 billion in assets to tap prospects in North America. He is staking the company’s future on U.S. and Canadian oil and gas plays, betting they will generate cash at low prices and allow the company to ramp up or halt output quickly.
ConocoPhillips has said it’s continuing layoffs while it strives to slash $1 billion in spending over two years. The company has cut close to 1,500 jobs since the downturn began in June 2014, according to Graves & Co., a Houston-based adviser that has closely tracked the cutbacks.



Me again....


I would expect the oils to be having a hard time with "earnings" - the collapse in oil prices was sudden and unexpected. It's really a price war between producers trying to price each other out of the market. I get it. It's a battle and there will be blood spilled. There'll be cuts and layoffs and earnings will suffer. MAYBE there's a dividend cut coming down the road... I don't know. And that is why I'll tip toe instead of betting the farm. At some point they won't be able to cut "enough" and will look to save cash expenses.. but most boards are reluctant to cut the dividend - it's usually the sacred cow... but you never know. I'm betting that oil recovers enough to save the dividend - and in the meantime the smart companies will adjust the business and will be better off for it when things turn around.



McDonalds (MCD) has a fundamental issue with having the wrong kind of food for today's consumer... that's THEIR problem. The "industry" is doing fine. Chipotle is growing - Panera is growing etc. With OIL - Everybody sucks... there's just too much production and not enough demand. The trick will be to bring costs in line with the price at which they can sell and make a profit. That is easier to TRY to fix than "nobody wants what you have".