Oil Follow-Up

In the The Case For Oil posted on January 20, I wrote:

Energy is not a fickle industry. It’s one of the best developed and best managed on the planet. It’s not going away. Your money invested in energy is safe. Do not sell because of currently low oil prices. They will eventually rise again.

If anything, watch the oil sector with an eye on buying.

That was a good call so far.

Oil closed this week at $59.89, near the highest it’s been all year and 15.2% higher than its $51.99 close on Jan. 19, the Friday before I posted the oil report. That’s quite a rebound in just three weeks.

Exxon Mobile reported 2006 profits last week, and they were the highest that any company in U.S. history has ever reported. That’s a pretty good indication of the kind of business that oil provides.

Oil stocks have done well. I suggested in the report that both Baker Hughes (BHI), BJ Services (BJS), and Grant Prideco (GRP) looked like good buys. In the past three weeks, here’s how the three have done:

BHI: +6%
BJS: +3%
GRP: +13%

Three weeks does not a successful investment make around here, but it’s a good start to what I think will be successful long-term holdings.

To those of you who were worried about your oil portfolio three weeks ago, I urge you to remember this mini-experience. Investments bought for sound reasons at reasonable prices need not be sold under duress at market lows. If anything, down markets are a swell time to buy more. This is why I am so meticulous in researching and patient to buy. Doing so gives peace of mind when the market moves against you. Trading junk requires extremely good timing, which few people have, because junk doesn’t afford the luxury of relaxing when prices move lower.

Oil companies like the ones I mentioned in the report are not junk. They’re excellent businesses.

Congratulations if you held or bought more. You must feel better these days than you did just a few weeks ago.

This entry was posted in Uncategorized and tagged . Bookmark the permalink. Both comments and trackbacks are currently closed.
  • The Kelly Letter
    A Complete Investment Management System
    The Kelly Letter  every Sunday morning by email.
    Like no other. Many subscribers say this is the best read of their week, astonishing in its ability to distill seven days of noise into one succinct overview of the very few items that might matter. Start your Sundays right!
    A one-page Quick Start Guide
    with page number references to full information in The 3% Signal. You'll receive access to this right away so you can begin transforming your portfolio into a performance machine immediately.
    The 3Sig Calculator.
    A thing of beauty! You'll use it to generate your own personal signals every quarter including exact share amounts to buy and sell based on your account balances. It emails you the results to make later quarters easy by keeping last quarter's numbers at your fingertips. Some subscribers say this tool alone justifies their subscription price.
    The subscriber-only section of this website
    where likeminded investors are commenting on notes and discussing in forums. Jason joins these interactions every day. They're a treasure trove of investing tips and wisdom.
    The archive of Kelly Letter notes.
    It’s a research center, searchable and smartly tagged to make gathering time-stamped material on covered subjects easy.
    The subscriber podcast.
    Jason reads every letter word-for-word. This feature was requested by subscribers who prefer audio learning. They listen on their Monday morning commute, during a workout, or while reading along at their computer.



    $200/year
    Save 17%



    $20/month
    Pay as you go
    Or sign up to receive free email and learn more about the system.
    Do you have a question?
Bestselling Financial Author