As I discussed in Energy Purchases Part 1 and Part 2 I believe there are massive amounts of value in the energy sector during the current downturn. My previous purchases were in October so I’m going to keep averaging in at these valuations and yields.
Past week or so I’ve added to the positions we mentioned previously in BP and Chevron.
BP $38.25 @ 70 shares – Yield 6.25%
Chevron $112.16 @ 25 shares – Yield 3.79%
I continue to keep these shares on DRIP so we’ll keep accumulating and see where we get. This is how you build long-term wealth. I don’t know where oil prices will be in 3 months, 6 months or 2 years, but I feel very confident about these companies on a 10-year basis. Oil is down over 50% this year. No one could have predicted this. I remember in 08 when we hit 30 something a barrel. Simple fact is we can’t predict the short-term price of these major commodities, but long-term these companies will continue to dominate with the sector and aren’t going anywhere. Back up the truck guys.