Purchased Noble Energy (NYSE:NBL) today with 3% of portfolio. Bought at $66.89. Had to balance last week’s purchase of Carnival Cruise Lines (NYSE:CCL) with another energy stock. Intrinsic value of Noble Energy is north of $100 per share.
So now my portfolio is full again of energy stocks, a sector which is notoriously cyclical in nature. Should we get a double-dip recession, lower oil prices could cause these stocks to fall hard. I like how the portfolio is sitting though. I’m in at very good entry prices on companies that know how to generate cash. And in most cases I’m following Insiders – Including the Noble purchase. As the saying goes, Insiders sell stock for many reasons, but they buy for only one – they think the price will go up. We’re joining Noble Director William Van Kleef, who purchased $665,000 worth of Noble stock recently.
For two simple reasons, I believe my energy stocks will work out well for me.
1) Inflation. It is coming. I won’t rant about it here. Read iTulip or Jim Rogers for the story.
2) Peak Oil (or, “Peak Cheap Oil”) as iTulip phrases it. This time, its real.