So let's talk about "averaging down" --- even though this strategy has been mentioned a zillion times in this thread.... now might be a good time to bring it up again. Particularly as related to OIL and OIL RELATED holdings.
When you're entering a situation where the results are an unknown... such as we are with Oil. And that situation is not under any kind of control - in other words - the market isn't stable and continues to be a volatile and fluid situation regarding the over supply (Thanks to Saudi Arabia)... There is no reason to RUSH to average down or to buy on the dips or to load up the boat with names in this sphere. It's simply time to keep your antenna up.
By that I mean - if you already own this stuff, you have what's going to be called "dead money". Dead money can be resuscitated - but that's going to take some intervention. So until you can see some intervention - there's no reason to rush to own more just because you "think" there's aid on the way. You'll be better served waiting until such aid is on the scene and you KNOW what you're dealing with.
Patience is what I'm saying here. Don't be quick to just load up on more just because it looks good on paper - or because you'll think you're smart to buy some of these great names "cheap" (cheaper than where you bought them). THEY CAN GO LOWER. I prefer to put my money into something that's not in turmoil... and wait until there's some signals that say "all clear". THEN you have plenty of time to average down your position.
We can't see clearly (YET) where this is all going to play out. KMI - ETP - CVX - XON etc just to toss some names out there... They look cheap right now - but we maybe have yet to see the damage surface. So why stand on the tracks of the train? Just stand a little bit to the side and see if the things has brakes.
I'm not saying to sell - I'm saying to just sit a bit (months or maybe a couple years) and let em lay... all the while watching and waiting for better news and then you can pounce.
Some would advocate for taking the loss and moving on... But I don't think this "space" (oil et al) is going to zero... I just think we're in a political war with Saudi Arabia trying to bury our industry in a market share grab. The thing that happens along the way when stuff like that happens is it forces companies to change or find a better way or whatever.... and all of a sudden - BINGO.... we figure out how to pump oil cheaper and become profitable at the lower selling prices. They'll do that half an hour after you sell and lock in your loss. LOL
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