It feels like the end of the world for the oil sector! Two days ago, OPEC announced that they would not cut their oil production. This was widely expected but people were acting like it was totally a surprise. They simply ran and dumped anything close to oil. Oil itself dropped like a rocket by 10% on Friday and the extremely panic and depressed sentiment also spread to the whole sector quickly. Any stocks that smell like oil would be thrown out and abandoned. What a bloodshed!
For those speculating on oil stocks for quick profit it must be extremely painful. But for long-term investors, this is a great opportunity not coming so often. As the living master investor Warren Buffett said: Be fearful when others are greedy and greedy only when others are fearful. This is the time you should be greedy, not fearful if you really want to be rich. No, I don't in any way suggest that you can be rich quickly by buying oil stocks now. Rather, this is the time you should start to look for quality oil stocks and buy them for long term. One such a stock I have been watching for years is Exxon Mobile (XOM), the biggest integrated oil company with the best management team who knows how best to allocate their assets. I once owned XOM years ago but I impatiently sold it because it was such a slow moving stocks at that time. Like many general "investors", I wanted to see big profits quickly. It was really one of may stupid things I had done before. I immensely regretted later when I started to realize how great XOM is as a business. XOM can easily still make money even if the oil price drops to $10. This is how good it is!! I have been watching to re-enter XOM. I think the time is coming now. XOM has declined by 10% in the past few weeks. It is rather cheap with a P/E around 10 and paying near 3% dividends. You can simply buy XOM and forget about it. More it goes down, more you should buy! Of course, don't forget to reinvest your dividends!!
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