Gregor MacDonald is my favorite energy analyst/economist and he recently posted a brief summary of what he would look for in a long-term position on oil:
[Q.]Gregor--I find what you say very interesting and something I hadn't thought off.
My question is if you want to take a long term position in oil--what would you buy
[A.]On my blog and in my newsletter, I generally avoid giving specific investment advice. However, as a general theme, I regard Canadian oil supply as geographically and politically secure on a relative basis. And, you'll find that most of the Canadian oil and gas companies trade in NY. So, over time, I have pointed people to that space as a vehicle. Of course, Canadian oil and gas cos are indeed "equities". And we have seen that all equities can at any time be taken out and shot. Meanwhile, oil ETFs have myriad problems relating to the vagaries of having an ETF that tries to hold a basket of futures contracts.
Find low debt, high cash oil and gas companies in Canada, and favor the larger cap ones. That's what I do.
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