We’re at a very important time, for our trading purposes – one that requires some discipline and experience to manage. I’ve always called this moment “riding the wave”.
We’ve done just about everything right in establishing our energy portfolios: Buying only high-quality stocks in the correct subsectors; establishing positions at or very near to short-term, and in some cases, long-term lows and correctly foreseeing the major/macro trends that will drive the fundamental (oil prices) in our favor for a very long time to come.
OPEC remains committed to withdrawing supply and seeing prices rise for at least the next year, oil companies here in the U.S. are now focusing on value instead of breakneck production. Everything points to nothing but good results in the investments we’ve made.
But now what? What do we do for the next – at least 3-6 months – as we wait for the fundamentals to move forward and our stocks to rise further?
There are two distinct strategies you can employ; both of which I’ve used successfully over the years.
One I would call the ‘fire and forget’ strategy. If you’ve actually followed the correct patterns and are nearly completely invested to your risk limits, there is a school of thought to doing absolutely nothing – or at least the absolute minimum with current positions. If our oil thesis is correct and oil is headed back to $100 a barrel and…