Lightening up on Big Oil
The euro debt crisis has changed the game for companies like Norway's Statoil.
As I wrote in my May 21 post, as hard as it is, I think investors should try not to get caught up in panic selling during this market drop.
But that doesn't mean they shouldn't sell anything. The euro debt crisis will depress growth in Europe, lowering global demand for commodities such as oil and local demand for commodities such as natural gas. That means the crisis has changed the fundamentals of Statoil for the worse.
I still like the company's long-term positioning as a natural gas supplier near gas-starved Europe and its technology edge in exploring nearly opening Arctic waters for oil. (By the way, Norway and Brazil are, to the best of my knowledge, the strictest regulators in the world when it comes to blow-out preventers. The failure of an inadequately tested and poorly designed blowout made it impossible to contain the oil flow after the Deepwater Horizon fire and explosion in the Gulf of Mexico.)
I've waited to sell until the record date passed for the company's most recent dividend: Statoil will pay a dividend equal to about 95 cents a share to shareholders of record on May 19.
And then I waited some more for a bounce. As of May 21, I'm selling these shares with a loss of 14% since my purchase on September 23, 2009.
I'm going to sit on this cash for a while in the belief that some time as early as this fall and perhaps as late as December, I'll want to buy bargains in currently depressed emerging-market stocks. (For more on that strategy, see this post).
Jim Jubak plans to sell his personal position in Statoil three days after this column is posted.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Stocks are facing some serious resistance as the bears tear into the market's respite.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.