# Canadian Natural Resources Ltd (CNQ.TO, CNQ)



## marina628

Canadian Natural Resources Ltd. (CNQ-T 40.6 -2.35 -5.47%) 
http://www.bnn.ca/News/2011/1/7/Fire-halts-production-halted-at-oil-sands-mine.aspx
I have been watching this stock and plan to buy some just wondering how many trading days you guys think it will take for this to settle from the fire news.My brother works on that site and he said probably six months minimum to fix this .The Injured workers were 300 feet up when explosion occurred so God was definitely looking after them!
My brother said looking at the damage after the explosion there is no human explanation how they were able to get to the ground except divine intervention.

Marina


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## humble_pie

the charts i follow are showing that short-term cnq was already correcting from downward plunge & gap down on friday. That doesn't mean there's no buying opportunity left, though. Did you read that company happened to have an extra pair of extractor metal drums already on the site, which had been purchased for a planned expansion. If 2 of the 4 burned drums can survive - and early estimates are that they may - then horizon could be back in business soon.

on a distantly related subject, i am wondering about the effects of seasonal Q2 rig stoppages for canadian pressurized drillers. Specifically i'm interested in gasfrac & trican well. As is traditional in canada, both will stop drilling during the Q2 thaw season, when official road bans prevent the transport of heavy vehicles.

i recently learned that russian operations don't stop for trican, because russian highways are built to "float" upon permafrost. And US operations carry on year-round. So it's hard to evaluate the Q2 rig shutdown for these companies.


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## AltaRed

As I understand it, it was the cokers that caught fire, not extractor drums. And it was only one train that was affected. They will be back up at 50% capacity shortly. They also have insurance to cover costs plus business interruption insurance. I suspect stock price impact will be minimal.


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## humble_pie

looks like yesterday was a cnq opportunity.

bt 2013 US $25 calls.
sld 2012 US $50 calls.
cost 15+change.
potential gain is 25 if stk rises towards 50 & beyond.
that would be 66% over 2 years.
there are additional call sales to be made over the life of this diagonal spread which will increase return.
it's reasonable to see stk crossing 50 before january 2013.

other advantages of this option strategy are:

- tax-favoured capital gains;
- no messy US dividends;
- each 2013 25 call contract is 100 delta, ie leveraged to benefit 100% from any advance in CNQ share price but at only 40% of the cost, therefore less capital is at risk in a potential downturn.


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## marina628

I bought CNQ yesterday $41.65 after getting your guys feedback over the weekend and flipping a coin lol


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## Doug2000

Subscribed

Need to get back in.


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## zylon

*cnq.to 37.92*

CNQ’s Horizon oil sands plant shut down Feb 7
http://www.theglobeandmail.com/repo...zon-oil-sands-plant-shut-down/article2329723/

Insider activity
http://www.canadianinsider.com/node/7?menu_tickersearch=CNQ+|+Cdn+Natural+Resource+Ltd


Click on image to enlarge


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## Soils4Peace

With more workers in for shutdown, the camp kitchen will be open longer. Yeah!


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## Barwelle

What are everyone's thoughts on CNQ lately? I had bought some in January at 37.90 because of the price drop after the fire (I figured price should go up once Horizon is up and running again), and because I figured that the share price would go up eventually when these low natural gas prices rise again (since 33% of CNQ's business is in NG).

Now we're down to around 34.00. I told myself that I would consider averaging down once the share price was below 10% of my purchase price, and now we're past that today. As far as I can tell, it's dropped today due to lower demand for commodities in Europe and China. (Like a lot of the TSX right now.)

Just want to see if anyone else is willing to share their thoughts and plans at this point on this company before I put more money into it.


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## Assetologist

Sub-30 for me.
I have some still from 2009.


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## tombiosis

Assetologist said:


> Sub-30 for me.
> I have some still from 2009.


What news or info prompts you to predict "sub 30" price for this stock? Just curious because like others I am thinking of buying more on recent drop...thoughts?


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## zylon

*dumpster diving*

Much as I'm trying to reform my old ways, I just can't help myself.

As I was strolling past the dumpster this afternoon I saw CNQ being
thrown away so I put some in my back pack. 
My average price now $34.67

CNQ insider









From this old article


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## moneyisfornothing

*Cnq*

haircut tomorrow?:hopelessness:


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## Assetologist

tombiosis said:


> What news or info prompts you to predict "sub 30" price for this stock? Just curious because like others I am thinking of buying more on recent drop...thoughts?


I try to invest in good companies (which pay a decent dividend) when they are subject to adversity & herd selling. 
I cannot possibly ever know as much and certainly never more then the big fish traders but small investors can be contrarian and nimble, at least with a portion of their portfolio. I recently bought CHK based on this thesis and will follow CNQ as well as many others. Tomorrow may be 'sub-30' day.
PS CHK is probably my highest risk buy recently but CCO and ECA have responded favorably.


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## Doug2000

I'm buying


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## KaeJS

Thoughts on this?

Anyone buying?


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## marina628

I tripled my position a while ago only down 5% now instead of 28% lol


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## londoncalling

easiest way to erase a paper loss.... :friendly_wink:


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## zylon

*CNQ - long term play on natgas ... not just an oil co*



> CNQ has more natural gas acreage than any other
> company in Canada, including ECA. ~Eric Nuttall


Quote taken from this 5 minute video.
http://watch.bnn.ca/#clip706815


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## KaeJS

Buy?

I haven't pulled the trigger yet. Thinking about it...


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## Young&Ambitious

I bought weeks ago, I'm sitting happy  I'm considering adding on a down day


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## KaeJS

I need to be careful, as this will place me on margin. Don't want to jump in at $28 to watch it go to $26. That won't be fun.


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## Navigate Sensibly

*Bewildered*

I bought CNQ at 34. I don't know why this one fell so much harder than SU. Sure it has a little bit more gas... but just a little more right?  I can't believe where it is now trading.


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## webber22

$34 ? Both US and CDN are around $26 now. But you're right, CNQ has fallen the farthest, but if there's no hurricanes etc disrupting the supply this summer, the bottom could be in October.


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## Barwelle

I'm tempted to average down some more, but each successive dip gets lower and lower....

Webber, I'm sure Navigate means s/he bought when it was at $34, like it was in March.


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## webber22

Ok I see what they mean now. Well, the CMF kiss of death was put on this stock today, with some many posters buying it the last few days in the 'what are you buying' thread.


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## Young&Ambitious

Haha tell me about it :/ I wonder how much it'll slide..it's past its 52 week low.


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## humble_pie

there are some nice low-hanging cnq jan 25 puts for anyone feeling frisky. At the close, 2.75-2.90. Buyers would have paid 2.80 easy.

castor ? pollux ? you are our risk-taking gemini horsemen in the sky.

i'd sell some, except i'm already short 10 of the danged things in a perpetual rolling short strangle.


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## arc

natural gas is sure to rally to $3+ by end of july


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## Navigate Sensibly

Barwelle said:


> I'm tempted to average down some more, but each successive dip gets lower and lower....
> 
> Webber, I'm sure Navigate means s/he bought when it was at $34, like it was in March.


Yes, that's what I mean. I bought it in March. 

New 52-week low today. Why does no one like this stock? Suncor at least has some support. But this one... freefalling. :distress:


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## KaeJS

arc said:


> natural gas is sure to rally to $3+ by end of july


Based on?


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## KaeJS

Navigate Sensibly said:


> But this one... freefalling. :distress:


http://www.youtube.com/watch?v=5gqT6En2O78


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## Assetologist

I'm buying: 1000 today maybe another purchase or two this week or next?!?

This may prove to be a decent swing trade prospect - buy low (unloved, against the crowd & scary = overcome fear) and sell high (=overcome greed). 
Hope really has no place in investing but it's hard to avoid although it can be embedded in mastering fear).

Good luck.


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## humble_pie

sold 5 more cnq 25 puts this am, just as stk was turning up from 25.34.

for years now i've sold US naked strangles in cnq. They are my only naked short calls. Risk is hi but i won't be assigned, i'll dance out first. Returns are $4000-9000 on a cost base of zero, since margin is always available.

however the poor old strangle is so bent out of shape right now, with stk so low, that it's no longer even a strangle.

the june 45 calls expired otm in june but there were no calls worth selling. I'm reluctant to go below a 40 strike price. Premiums are pennies. Not worth doing.

so there was no choice but to increase the put side of the strangle.

if assetolo is right, later on i'll be able to sell the naked calls.


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## maxandrelax

Anyone watching this today. Are we having a turnaround?


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## humble_pie

6-7 days ago.


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## KaeJS

Sold mine today.

Bought on margin, so I chose to get rid of it to reduce risk. Made a small $75 profit.

If it drops again down to $26.25 range I'll buy again.


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## Navigate Sensibly

KaeJS said:


> Sold mine today.
> 
> Bought on margin, so I chose to get rid of it to reduce risk. Made a small $75 profit.
> 
> If it drops again down to $26.25 range I'll buy again.


I thought you were done with margins for the year. What happened?? And why take such big risk for $75 only? 
If you really wanted to trade, why not pick some small caps, which has much bigger beta?
Btw, do you ever hold anything long-term? Just curious.


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## Barwelle

I'm sure he has his own response to questions like yours, but that's just KaeJS' style. He likes to make many small gains with large amounts of money and small movements of stock price. Seems to be working for him, check out the spreadsheet in his sig if you want a better idea of what he does. He's up 14% YTD, beating all four major North American indices. for 2011, he beat three out of four. I couldn't do it like he does, and he gets some admonishment around here for using so much margin and spending so much in commissions for such small gains, and it's not a perfect system - check out his CTEL trades on July 11/12. But you can't refute the fact that, so far, it's working.

Though, I do have some of my own criticism... I have been meaning to ask you (KaeJS), why you hold $24,000 worth of TD mutual funds when ETFs or e-series funds would be cheaper. That's a topic for a different thread or pm though.

Back on topic, I did end up buying some CNQ after posting upthread... amazingly close to the lowest point in the last dip. Bought at 25.66. Sold today at 28.25. That compensates a little for buying at 37.9 and 31.6 earlier in the year :$


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## dhna_1217

Is this stock having a turnaround??

I'm looking for opportunity to get in but can' find the right point...


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## Navigate Sensibly

Barwelle said:


> I'm sure he has his own response to questions like yours, but that's just KaeJS' style. He likes to make many small gains with large amounts of money and small movements of stock price. Seems to be working for him, check out the spreadsheet in his sig if you want a better idea of what he does. He's up 14% YTD, beating all four major North American indices. for 2011, he beat three out of four. I couldn't do it like he does, and he gets some admonishment around here for using so much margin and spending so much in commissions for such small gains, and it's not a perfect system - check out his CTEL trades on July 11/12. But you can't refute the fact that, so far, it's working.
> 
> Though, I do have some of my own criticism... I have been meaning to ask you (KaeJS), why you hold $24,000 worth of TD mutual funds when ETFs or e-series funds would be cheaper. That's a topic for a different thread or pm though.
> 
> Back on topic, I did end up buying some CNQ after posting upthread... amazingly close to the lowest point in the last dip. Bought at 25.66. Sold today at 28.25. That compensates a little for buying at 37.9 and 31.6 earlier in the year :$


That's nice averaging down. But did you sell all your shares? Because you still would not have broken even, with inital purchases in the 30's.


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## Barwelle

Oh, no, I only sold the shares I recently bought. I'm hoping it will continue to bounce up and back down so I can make some money off the volatility. Make up for my loss if I end up selling the older shares at a loss.

I could have kept these and hoped it'll head up from here but I'm betting it will go back down. I've got enough riding on that hope already, relative to my portfolio size.


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## logicfirst

I purchased this in June at 27.70.. Had already collected some dividend pay from this (~100). I m thinking that today is gonna be an up day and i should just sell it for about a 1k profit, but i m not sure if i should just hang onto it till december and collect some more dividend and hope that the stock is trading around 33 at that point.. or should i just sell and be happy with the gain, and buyon dips, and ride it out that way? Thoughts?


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## Spidey

logicfirst said:


> I purchased this in June at 27.70.. Had already collected some dividend pay from this (~100). I m thinking that today is gonna be an up day and i should just sell it for about a 1k profit, but i m not sure if i should just hang onto it till december and collect some more dividend and hope that the stock is trading around 33 at that point.. or should i just sell and be happy with the gain, and buyon dips, and ride it out that way? Thoughts?


You could always place a stop at a point that locks in a reasonable profit. If the stock continues climbing you can gradually increase the stop. With this technique you could be stopped out due to short-term volatility but at least you've locked in your profit. On the other hand if the stock either continues to rise without dipping to your stop price or continues to fall after hitting your stop, you will come out ahead of the game.


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## humble_pie

'
stops actually function like option strangles. In essence the investor is setting the price at which he will sell a particular stock & also, if he chooses to do so, the price at which he will buy.

the difference is that setting stops pays nothing. Nada. Not a penny. Whereas selling strangles often brings in 10% of the price of the stock on an annualized basis.


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## Spidey

humble_pie said:


> '
> stops actually function like option strangles. In essence the investor is setting the price at which he will sell a particular stock & also, if he chooses to do so, the price at which he will buy.
> 
> the difference is that setting stops pays nothing. Nada. Not a penny. Whereas selling strangles often brings in 10% of the price of the stock on an annualized basis.


I've never used sell strangles, but it is a somewhat different strategy than setting a trailing stop and somewhat more risky. If the CNQ rises significantly above the strike price, the stock will be called away, limiting the investors profit (from the time the options were sold) to the amount the options sell for. However, in the event of a rather smooth upward trajectory (admittedly rare these days) the investor make significantly more gains with a trailing stop. 

However, that being said, it does sound intriguing if an investor has some certainty of the price at which he would be willing make additional purchases and the price he would be willing to sell at. I suppose, for example, an investor could sell November calls at a $32 strike price and sell November puts at a $25 strike price and pocket a nice premium. However, he would have to be content to see a scenario where he was called away at $32 and perhaps see CNQ continue to rise to $36 or higher. At the same time he would have to ensure that he was willing to make additional purchases if the stock dipped below $25 and the economy looked bleak.


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## Spidey

Double post.


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## humble_pie

Spidey said:


> ... strangles [are] somewhat more risky ... the investor make significantly more gains with a trailing stop.


i do respectfully disagee. An order containing strangle prices can be modified 500 times a day, just like a trailing stop will follow.

the strategies are pretty much identical save & except the strangle seller will collect 7-10% of the market value of his stock while the stop setter will collect nothing.

as for the argument that strangle seller will be called out at 32 yet see stk subsequently rise to 36, the same can be said for the stop seller.

moreover, the strangle seller can precisely set his buy & sell prices, whereas the stop seller cannot.


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## Spudd

I don't really understand options yet, but I like to use trailing stops. How exactly would you replicate a trailing stop using options? As I understand it, if I buy a put that would be similar to a stop, since it means that I agree to sell my stock to the put-seller at a certain price (which is lower than the current price). But that costs money, doesn't bring in money.


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## humble_pie

Spudd said:


> I don't really understand options yet, but I like to use trailing stops. How exactly would you replicate a trailing stop using options? As I understand it, if I buy a put that would be similar to a stop, since it means that I agree to sell my stock to the put-seller at a certain price (which is lower than the current price). But that costs money, doesn't bring in money.


one would sell an otm (out-of-the-money) call. Or an in-the-money call. In CNQ - here i'm thinking only of US prices because i only do US options in cnq - one might think to sell an october 25 or an october 28 or 30, depending on one's outlook.

however, the fact is that cnq in USD could at times rise above 25, 28 or 30 prior to option expiration date - in this case october - but stock would not be called away. Why not ? because at those times, there would have been sufficient TV (time or theoretical value) in the option premium to buffer the stock & prevent assignment. Only at expiration will an itm option definitely be exercised, beyond a shadow of a doubt.


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## Spudd

Hmm. You would sell the call in addition to buying the put, or would you JUST sell the call?


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## humble_pie

spudd me i would just sell the call.

a short strangle is a combo of a short otm call & a short otm put. I sell naked or short USD strangles in cnq all the time. Have for years.

broadly speaking this stock trades steadily within a band. The strangle prices are situated near the extremities of the band. Call to the top, put to the bottom. Right now, i'm thinking a band fluctuating 25-40. A more bearish person would see a band of 20-35.

in a short strangle, the put that gets sold is a put to *buy* the stock at an historic low price. It is not a long put to sell the stock at any high price.

in general, i think buying long puts to protect stock is, with only one exception,* something of a silly game sold to option novices because it sounds reassuring. The cost of those puts to purchase is always extremely high, just as you point out yourself.

* the exception is professional collaring done in pension or registered accounts to obtain guaranteed risk-free income that is higher than treasury bill income. In cmf forum, lephturn does this beautifully in rrsp account.


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## Spidey

humble_pie said:


> i do respectfully disagee. An order containing strangle prices can be modified 500 times a day, just like a trailing stop will follow.


I appreciate your knowledge. I'm sure I'm missing something but I don't understand the statement regarding an order containing strangle prices can be modified. If you sell an option you are locked into that contract. How can it be modified?


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## humble_pie

spidey we have a difference here between entering an order to sell the call part of a strangle & actually having sold the call part of a strangle.

i thought we were dealing with the former case. An option order can be modified many times before it goes through just as can a stop order.

par contre a call once sold & a stop order once executed are both faits accomplis, non ?


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## Spidey

I get it. Thank you for the explanation.


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## Spudd

I'm really not following the logic here. I can't see how selling a call option is equivalent to setting a stop. If I sell an in-the-money call for a price lower than the current price, there is nothing to stop the buyer from exercising that call and buying my stock from me for a lower price than the current, is there? And if I sell an out-of-the-money call, it's hardly a stop since it is at a higher price than my stock is currently at. 

My goal is to keep my stock as long as it stays above X price. If it drops to X price, then I fear something is wrong and I want it to sell at that price.


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## humble_pie

spidey i'm sorry i didn't explain it very well. The word is not with me this am.


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## Spidey

Spudd said:


> I'm really not following the logic here. I can't see how selling a call option is equivalent to setting a stop. If I sell an in-the-money call for a price lower than the current price, there is nothing to stop the buyer from exercising that call and buying my stock from me for a lower price than the current, is there? And if I sell an out-of-the-money call, it's hardly a stop since it is at a higher price than my stock is currently at.
> 
> My goal is to keep my stock as long as it stays above X price. If it drops to X price, then I fear something is wrong and I want it to sell at that price.



Actually, I was rethinking this as I was taking the dog for a walk. Originally, I thought that one would place a sell bid on a call for a high enough premium that it wouldn't be worth filling at current prices. But then it would only be worth filling if the stock raised in value, not declined to match a stop price - the reverse of what I was contemplating. I'm confused.


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## peterk

I'm with you spud, I don't get it. I just typed out what I thought would respond to your question...but now I've only confused myself further! Below is what I thought would answer your concerns, but clearly shows that it doesn't... I also must be missing something critical in my juvenile understanding of options...



_____________________________________________________________________________________
So CNQ-N is at 28.30 today
Sell a Sept. 22 call, strike 25, for $4.11

The buyer will NOT exercise yet, because he just paid you 4.11 and if he does, he only gains 3.30.

Say tomorrow, CNQ drops to 27.30 The value of the buyer's call drops as well, to $2.80 (which is what he could resell it for at this point) He now has the choice of selling the option for 2.80, or exercising for a 2.30 gain.....

Getting confused!!!
______________________________________________________________________________


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## humble_pie

spidey has a good point. I think it's a good idea to step back from the scene & ask oneself if it makes any sense to be fearful in a stock like cnq. Company is not going to disappear unless the world ends. Merely going through a rough time as are many energy stocks. Trades in a band. Presently at low end of the band.

the stop sellers are so intent to split hairs over selling that they are overlooking & neglecting those nice 12.50% returns (not including dividend) from doing something extremely similar in options. They won't receive that 12.50% from selling on stops.

sell jan 28 3.00-3.10. Possibly sell jan 20P .55-.60. Total 3.55.

i myself would sell a much higher call. In fact, i haven't sold any calls in cnq recently because current prices are too low to be interesting. I'm not fearful. My time will come. each:. In the meantime i've recently sold 15 short jan 25 puts.

a nervous nellie could sell a 28 call which would, i assume, be close enough to a stop loss at-the-money order.

i think the moral of the story is Take Dogs on Walks.


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## Spidey

humble_pie said:


> They won't receive that 12.50% from selling on stops.


Actually, I may have just been lucky but I've found that you can receive this type of return, in this market, selling on stops. The market seems to be like clockwork lately. Down a few days, up a few days, and down a few days again. Seems all you have to do is buy something good that seems to have particularly tanked during the down days and then place stops after you've made a suitable profit. The trick is that different stocks tank during the various downturns, so you have to have a list of suitable candidates. CNQ was a reasonable candidate when it hit the 26ish level.


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## Assetologist

Spidey said:


> CNQ was a reasonable candidate when it hit the 26ish level.


It was and I bought. 
This is a market for swing trading and possibly picking up DG stocks to hold for the lng term on dips.


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## humble_pie

spidey i would imagine it's more than luck in your case, i would imagine you have been trading pretty darn nimbly. It's a good way to manage in volatile but essentially sideways markets.

some option strategies are also ways of extracting profit from volatile up-and-down stock trajectories. The one i mentioned - selling a strangle - does this efficiently.

in cnq, one can note that the 12.50% gain from cnq options was for a 6-month period. Come december or january, the investor gets to sell the same or similar options all over again. Although it's foolhardy to extrapolate a full year return from 6 months, nevertheless 6 months of cnq options do suggest an annual return exclusively from options that is north of 20%.

all these approaches whether stock trading or option trading definitely help. CNQ is a good choice as a trading vehicle imho, whether one is doing options or short-term trading or long-term trading based on cycles in resource markets.

assetolo's strategy is probably the best one, said the Cheshire Cat.


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## Navigate Sensibly

Here is another thought. Just simply hold it. :chuncky:


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## Assetologist

I've done that as well, holding some shares since 2009 BUT as the dividend is fairly low and the share price has returned to near 2009 levels, I have not been well paid to hold. 

I believe in buy and hold but that for cyclical businesses the 'hold' period in not the same as that of mega-cap, dividend-growth, future-income stream businesses.

There is nothing wrong with any equity investment srategies that suit the Investor's underlying and honest belief system, aptitude and most importantly, temperament.

That is one of the cool aspects of becoming a student of the markets and DIY investing!


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## Spidey

I've decided to divide my portfolio, into a portion that I hold and another rather small portion to play the volatility. Often this does involve being stopped out, or selling, only to see an asset rebound. But like assetologist mentions there's the other part of the portfolio to take advantage of a continuing upward momentum. If I've locked in a 8-14% profit within a week or two - I figure that's not too shabby, 

I've been trying to wrap my mind around Humble's sell strangle as an alternative to a stop order, but it seems beyond my poor brain's limited capacity. The best I can come up with is this strategy which involves buying a put and selling a call - which is intriguing, especially as a strategy when the market seems to have peaked or perhaps as an alternative to the "sell in May" strategy. For those interested see, "And Even Better – Let’s Have the Market “Pay” for Our Protective Put Option" in the link below. 

http://safertrader.com/a-better-way-than-the-stop-loss-order/


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## humble_pie

spidey what you are describing ("best i can come up with") is a collar, not a strangle. As you say, it's sell-call-&-use-proceeds-to-buy-put.

the problems with collars are that 1) upside is blocked (not a good idea in cnq imho); plus puts these days are so danged expensive due to low interest rates. It's presently not possible to offset the cost of a put buy with the proceeds of a call sell at the same strike, although this used to be the case. Today a collarer has to drop down a strike or 2 for his put, leaving a risk window open.

nevertheless collars are frequently done but more by pension & other institutional funds looking to lock in guaranteed risk-free returns from dividends that yield a notch or 2 better than treasury bills.

as i've mentioned in other threads, here in this forum lephturn is a retail investor who does excellent professional-quality collars in his rrsp. However, they are challenging to accomplish.

the strangle differs from the collar in just one little detail. The direction of the put gets reversed. The strategy becomes sell-otm-call-sell-otm-put.

what one *could* do in cnq options, if one were starting out, is sell the call only, or sell an otm put only. These are not strangles because the other part is still missing.

the price at which one agrees to sell the call is similar to a trailing stop, although there is a definite time lag.

options are not for everyone. Once one gains some skill, their niggly little details become easier to manage. I for one find options far more peaceful than trading the stock itself, because every stock trade is so black-or-white. It's either right or it's wrong. Whereas the outcome of an option sale is not really known until some time in the future, although the $$ one receives the very next day are real indeed.

personally i like floating in my tiny canoe, feathering & hedging now this way, now that way, paddling with the currents & the tides. I'm happy to go with the probabilities. I think the probability for cnq is that it will trade in a band of USD 25-40, with the upside still a long time off. I'm bullish enough that i have not sold any calls at all - ie no limit yet placed on the upside - even though the old june 45 calls that i'd sold months ago expired 4 or 5 weeks ago.


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## Assetologist

Assetologist said:


> It was and I bought.
> This is a market for swing trading and possibly picking up DG stocks to hold for the lng term on dips.


Reply to self: sold at 31.30. A trading market these days/weeks/months!


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## NakorOranges

Im new to this, but it looks like a lot of the figures in their report were very close to last years at this time. Base on where it was valued then I didnt sell at peak today and still have it (up ~5%) with the thinking it would end up somewhere in the 31-35 range over the next week. Of course it could have been overvalued last year, but I figure stocks probably most accuratly represent a company right around report time.

Is there anything wrong with this thinking or my interpretation that the report was very much like Q2 last year?


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## Assetologist

The reported figures reflect the business and it seems stable. 
Unfortunately, or fortunately, they don't reflect investor sentiment and behavior.
Investor psychology is what I try and bounce trades off of (with a few personal caveats).
If 'bad' news breaches the lower range of investor comfort then the price will fall next week. If 'good' news is interpreted positively by the mass of investors then stock(s) will rise.
I try and pick large themes that makes sense to me and buy to hold and/or trade businesses within that theme, making purchases when other investors create opportunities.
Sometimes it works and sometimes it doesn't which is why one of my caveats is to only 'trade' the shares of businesses that I would be content holding for many years waiting for the theme to play out whilst collecting dividends.


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## zylon

*Investing for the long term*

_Canadian Natural Resources_ and _North West Upgrading_ project to refine bitumen gets thumbs up.



> In hindsight, Ian MacGregor thinks it was an error tacking the word “upgrader” on to the name of the company he helped found in 2004. “We should have called ourselves North West Refining,” he says over the phone from his ranch outside of Calgary. “We’re building a refinery. We’re not building an upgrader.”
> 
> [...]
> 
> “People tend to make decisions on a very short-term basis. What we are building will last 50 to 100 years,” MacGregor says. “You have to look at the long-term underlying economic forces when you are making these kinds of decisions. I think the future is bright – if you make the right things.”
> 
> http://www.albertaoilmagazine.com/2...albertas-value-added-dream-for-the-oil-sands/





> The first 50,000 barrels per day phase of the bitumen refinery has a cost estimate of $5.7 billion and is expected to take approximately three years to build, with above ground construction starting in spring 2013.The facility is expected to be operational in 2016, with phases 2 and 3 to follow upon separate sanctioning.
> 
> http://www.industrialheartland.com/index.php?option=com_content&task=view&id=130&Itemid=160


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## zylon

> Based on the latest reports from analysts in Canada and the U.S. who track the trading activity of corporate officers and directors, insider buying is up sharply - particularly in Alberta's beaten-down oil and gas sector.
> 
> With the shares of many Calgary-based energy companies trading at or near the bottom of their 52-week ranges, insiders have been loading up, says Ted Dixon, CEO of Vancouver-based INK Research.
> 
> In his latest weekly report, Dixon notes that the buying-to-selling ratio for Canadian energy stocks leads every other sector on the Toronto Stock Exchange.
> 
> Dixon's list of top-50 stocks that have been heavily bought by insiders of late include Penn West Petroleum (a stock I own), DeeThree Exploration, Superior Plus, Zargon Oil & Gas, Cequence Energy, Pen-growth Energy, Sure Energy and Baytex Energy. ~Gary Lamphier, Edmonton Journal
> 
> http://www2.canada.com/edmontonjour....html?id=4d812c36-565c-4585-b9a5-275bbcf38695


CNQ: Nov 28 / 150,000 bought
http://www.canadianinsider.com/node/4

- via Twitter @Canadianinsider


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## Butters

Like oil needs more bad news....

TORONTO, Nov 30 (Reuters) - A Canadian Natural Resources pipeline has leaked about 60,000 litres of crude oil in northern Alberta after a "mechanical failure", the Alberta Energy Regulator said on Sunday.
http://www.reuters.com/article/2014/11/30/cdn-natural-rsc-leak-idUSL6N0TK0JK20141130


This is one name I might be looking to pick up in a couple weeks, see how the markets like it tomorrow


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## AltaRed

377.4 bbls of oil (assuming 60,000 litres) on frozen muskeg will not be hard to clean up. There should be no market reaction to a spill of that size in that situation. The bigger issue is what was the failure and why.


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## GPRickard

CNQ is starting to look real attractive at these prices. The yield isn't as high as many other energy players but their low payout ratio hopefully allows for many dividend increases moving forward. I am hoping the price drops a tad more while I accumulate some more funds. It seems everyone these days is giving SU all the love, and neglecting this stud.


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## gibor365

I hold both SU and CNQ...as my CNQ position was much smaller, I already started to add to CNQ position


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## My Own Advisor

Once I have more money saved, I will be buying SU and CNQ. Hopefully going to make the plunge on some shares next week.


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## Canadian

I started small positions in su and cnq last week and plan to add more this spring with the tax refund.


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## banjopete

AltaRed said:


> 377.4 bbls of oil (assuming 60,000 litres) on frozen muskeg will not be hard to clean up. There should be no market reaction to a spill of that size in that situation. The bigger issue is what was the failure and why.


It's interesting that the "terrible oil spill" is always reported in thousands of litres, I suppose a few hundred barrels of oil doesn't have the same shock effect.


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## gladaki

CNRL slashed their budget again today by $2.4B.


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## leeder

No mention that it would hike its dividend, which is somewhat disappointing. I was hoping, with CNRL's low payout, that it would increase the dividend to give shareholders confidence. I suppose, with CNRL's excellent management team, that it's best to retain the capital for future acquisitions or at least wait till oil prices bounce back.


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## AltaRed

Sheesh! What a load of crap from talking heads. Don't they read financials before embarassing themselves? $30/bbl at existing oil sands mines? Also, operating expenses are only one (albeit the major) component of cash costs......


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## zylon

I don't claim to know a lot about call options, but don't the *$37 20 Jan 17* look tasty if one doesn't mind being called away?
Open Interest is still a mite skimpy, and I don't understand implied volatility - more homework required.
How would the options pros here play this?


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## humble_pie

zylon i'm hoping to not discourage you. Please don't even think of discourage. There's a silver lining to my discouragements!

(encourage #1) CNQ is an excellent stock to sell options on. There's enough volatlity to provide good premium in the options while - even more wonderful - this stock has traded in a fixed band for many years, between lo 25ish & hi 45ish. So if you sell options near the outer edges of the band, there are good probabilities of never being assigned. In other words, one coasts along year after year, selling an extra income stream, one that's favourably taxed to boot.

(encourage #2) you've gone to US options, definitely the place for CNQ.

but why would you be preparing to let CNQ go for a mere $40.10 (37 + 3.10 call bid) some time between now & january 2017?

ottomh i feel that 40.10 going out 2 years is substantially undervaluing the potential in this stock.

parts of the problem are a) you've picked an unpopular strike price, b) open interest is therefore too skimpy, as you remark yourself, & c) imho you are going out too far in time. No one except the truly desperate will flee to the 2017s.

in the option chain below, you can see my picks. Going out only to jan/16 here, because 11 months is plenty of risk time.

the large open interest in the 35s & 40s means that it will be much easier to roll out of the position as expiration approaches, ie there will be enough counterparties. Whereas, with the 37 calls, there are so few counterparties that the trader in these will be left to deal with the one-eyed market maker as expiration approaches.

myself, i'd sell the 40s. As a matter of fact, i did sell exactly these 40s, a couple days ago, as part of a short strangle.


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## zylon

Many thanks h_p for the excellent feed-back; it's much appreciated.

Was thinking I'd get bigger bang for my buck with the calls I highlighted as my broker charges 9.95 + 1.25 per contract. That's okay for a bit of experimental dabbling, but if I were to do this on a regular basis, I would most definitely look for another broker – IB probably.

Also, RBC-DI selection is quite limited. Right now, the highest strike price I can find is $38 Sep 18/15 last 0.95 no bid.

This is likely not a good time for call writing anyway; isn't price weakness a better time to write calls?

For someone with your experience, you may want to check out CSIQ calls. I haven't sold any myself, but last time I looked, they appeared to me to have potential.


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## humble_pie

zylon said:


> Was thinking I'd get bigger bang for my buck with the calls I highlighted as my broker charges 9.95 + 1.25 per contract. That's okay for a bit of experimental dabbling, but if I were to do this on a regular basis, I would most definitely look for another broker – IB probably


i know what you mean but probably best to not worry about the commish at this point. Even with only 100 shares + 1 contract in a covered call minimal position, one is only paying 11.25 pennies per share to sell the option. Paying far less, of course, when the number of shares & contracts involved is greater. So one wants to go where the $$ returns from the option trades will be higher & forget about the commissions for now.





> Also, RBC-DI selection is quite limited. Right now, the highest strike price I can find is $38 Sep 18/15 last 0.95 no bid


this is not good. I can't imagine why RBC would not show the full option chain, i believe every broker worth its salt will do so. Are you sure about this, zylon? perhaps look elsewhere on the website or ask an RBC rep to help locate the full chain?

overall, alas i do have a negative view of options at RBC. They are known to have zero interest in developing any options business. As of a year ago, they could not take spread orders. I don't mean the web platform, i mean the agents themselves had not been trained to handle these.

i was so surprised by this lacuna that i phoned back the next day to double-check with a manager. Was the nice licensed representative possibly making a mistake when she told me that RBC doesn't take spread orders, i asked.

the manager laughed pleasantly. It's true, we do not take spread orders, he said. I can see we'd never have your business, he added.

where a roybank client will have difficulty is with the option rollover, towards the end of the life of the option that has been sold. Here, one normally puts on a spread in order to avoid assignment. But a spread order usually requires cooperation from the broker. There are different helpful modalities, some web-based, some human-based.

RBC, however, is only going to be able to offer the most basic choice of all: Either buy back that option or else be assigned.


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## zylon

> this is not good. I can't imagine why RBC would not show the full option chain, i believe every broker worth its salt will do so. Are you sure about this, zylon? perhaps look elsewhere on the website or ask an RBC rep to help locate the full chain?


My mistake - I went back and had another peek.
I had only been looking at FEB calls. There are also MAR, JUN & SEP with much higher strike prices.

Thanks again - back to studying.
Have been interested in options for many years, but always found them way too complicated, and it seemed that even the most simple question was always answered with a barage of "if this then that - unless in which case - on the other hand" et cetera. Now I've stumbled onto some videos from Allan Ellman who makes it simple enough that a person can at least get started, and getting started is what it's all about. The rest can come later if I find this is something I'm capable of learning.


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## AltaRed

Finally a clear winner in the oil production sector (as compared to infrastructure). Their 4Q results http://www.cnrl.com/upload/media_element/880/04/0305_q414.pdf and http://business.financialpost.com/2...uction-almost-triples-profit/?__lsa=893d-01f7 were pretty darn good. Write offs due to reserve writedowns (uneconomic reserves at year end prices) were restricted primarily to the North Sea and there was minimal share creep (due to repurchases). That management team has got its act together and does not abuse the shareholder. 

Disclosure: The only O&G company I now own and then only a partial position.


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## Janus

No comments in here for a while - is nobody scooping this thing up right now? Looks like a bargain for a company run by such a great management team.


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## thepitchedlink

does seem like a good time to get in doesn't it? Just not sure I need more oil sand exposure right now......


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## AltaRed

thepitchedlink said:


> does seem like a good time to get in doesn't it? Just not sure I need more oil sand exposure right now......


I've been in with a partial position since late last year at prices considerably higher than today's price. That said, I see no reason to invest in more commodities of any kind and will just let my current position ride out the storm. There is no question in my mind this company is oversold and part of it may be because of total silence out of the company and that rattles shareholders. 

I don't expect them to say anything until 4Q reporting when they will lay out their financials, likely provide another cut in 2016 guidance (capex and reduced production projections). They've been double whammied with low oil and gas prices. They may even cut their dividend but I see that as a more remote possibility.


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## My Own Advisor

Same AR, although at these prices it's really, really hard not to buy in. I'm trying to wait myself since I have no idea how much farther things can go. I mean, oil can't go to $0 but geez, I never thought I'd see it at $28 either.


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## doctrine

CNQ's Q1 report was remarkable. They not only didn't cut the dividend, they are producing oil at their maximum mandated provincial cap and will for the rest of the year. Their break-even point is around $31 WTI, one of the lowest anywhere and where prices are already trading later this year. They will maintain production at current strip prices in an environment where everyone else has to cut because their costs and/or debt are too high. They did not have a single asset impairment across their entire base.

Just amazing. CNQ is perhaps one of the best managed and most underrated businesses in Canada with a low cost moat that leaves them thriving when most companies, including super majors, are leaving drills to rot in the fields. They picked up a ton of world class assets as those same super majors were fleeing in the last 5 years at a fraction of cost and it is paying off big time.


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## doctrine

CNQ buys Painted Pony for $460M.









Canadian Natural buying Painted Pony Energy in $461 million-deal - BNN Bloomberg


The combination of the Calgary-based oil and gas companies for $111 million in cash and the assumption of $350 million in debt is expected to close later this year.




www.bnnbloomberg.ca





CNQ are picking up the equity for 20 cents on the dollar. The debt they can refinance for less than 50% of Pony's interest rate. This is cheap. But no one else can come up with $460M to buy it. This company traded at $14 a share in 2014 and now is gone for $0.69. CNQ gets a major addition in some of the best parts of a world class field and can probably double output or more if they choose for not that much additional investment.

Very impressive. CNQ has been outperforming SU fairly consistently in the last 3 months and continues to be one of my favorite stocks to hold. Up 20%+ in the last 3 months, ahead of TSX index return of 13%+. SU down 4% (I also hold some SU but less than 1/2 of CNQ).


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## AltaRed

One difference of course is CNQ doesn't have the legacy assets SU has in their own base operations and Syncrude. Nor does SU have the amount of more 'conventional' production that CNQ does. Nor does CNQ have the downstream and retail assets SU does which is a steadying factor in SU's case. The two companies really cannot be compared.


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## m3s

One of you here mentioned CNQ back in March when I was looking for something to flip my oil losses into. Bounced back nice and now I have the capital losses in my pocket


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## m3s

Up 22% today?


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## doctrine

CNQ is killing it. They can fully fund $2.7B in capex and a $2B dividend as low as $30 WTI. They made a profit last quarter and an additional $500M in free cash flow at $40 WTI, above and beyond their dividend. Pretty solid.

CNQ has largely replaced SU as the first choice of institutions getting back into the energy space. But SU is probably oversold and over 2-3 years out may outperform. I see 60% upside in CNQ and 100% in SU from here, especially for 2022.


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## m3s

Yea SU up nearly 30%


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## james4beach

m3s said:


> Up 22% today?


Didn't you hear? They fixed COVID

XEG is up 17% and XLE up 16%. All travel stocks up tremendously, airlines and cruiselines up 20% to 30%


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## m3s

Either they fixed COVID or they printed so much fiat to fix COVID that equity is just valued more in fiat as a result of fiat being worth less (imho)

Meanwhile $60B transactions on ethereum last month alone while decentralized exchange volume growing faster than exponential rates of COVID..


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## james4beach

m3s said:


> Either they fixed COVID or they printed so much fiat to fix COVID that equity is just valued more in fiat as a result of fiat being worth less (imho)
> 
> Meanwhile $60B transactions on ethereum last month alone while decentralized exchange volume growing faster than exponential rates of COVID..


I was trying to be funny. There's some positive news on vaccines but I'm more inclined to call it market volatility overall.


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## doctrine

james4beach said:


> Didn't you hear? They fixed COVID
> 
> XEG is up 17% and XLE up 16%. All travel stocks up tremendously, airlines and cruiselines up 20% to 30%


Although this is certainly COVID vaccine pop, and likely lots of money caught short, I will just reiterate that SU and CNQ are profitable at current strip prices, and CNQ is actually quite profitable and at close to a 15% free cash flow yield. Even after this pop, XEG is very cheap.

XEG/CNQ and others may pull back as COVID is still real and here, but 9 months out it is realistic to think approved and effective vaccines and as we get closer, that new reality will start to be reflected in stocks which are very forward looking by their nature.


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