What they are making huge profits in the last quarter and why are the stock prices falling? Yes, check the chart; they have been falling down for a long time. Their P/E are cheap!
What's wrong with production level decline? Why must the level go up and up? Would someone tell me why. The global economy is slowing down and data indicate that the US recession began in the last quarter of 2007. Decline in production level may be positive. As long as the profits are there and the business fundamentals and prospects are unchanged, the stocks are worth buying or holding. What do you want after all? Good profits, good sales, good dividends and share buybacks, what else do you need? Much better than holding our cheapy financials when you are paying fat checks to fat cats who made a mess of our housing and credit markets.
Then why are the stock prices falling? I really don't care. If you allow market speculators, manipulators, short sellers and crocodiles to guide you, you will inevitably become their victim. Please go back to fundamentals again.
What worries me is that costs may be increasing and that is a problem that big companies like Exxon and Shell must solve. However, if you look round the world, you will see all costs are rising. Why? We have currency depreciation everywhere particularly in US and we have inflation flying over our heads. Well, we must do more R&D to find cheaper and more efficient ways to get oil, to get crops, fuels and other basic necessities. This is the way to help humanity to continue survival.
By the way, isn't true that crude oil's retreat is a good sign for refining business? Why are the critics ignoring this trend when they assess the value of Exxon and Shell? The market manipulators will certainly hide away the good news and exaggerate the negatives if they want to short!
Lastly, disclosure: I hold shares in Exxon and Shell but I am not recommending anything.
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