Some of you may be sick of me writing for the third time in five days about PetroChina ADR (NYSE: PTR) -- unless you own it. But, it is on fire, so it is news. This morning as I type, PTR is up another $30 a share, passing $260. Many readers know why I invested in the company and may know that Warren Buffett did as well. His company Berkshire Hathaway (NYSE: BRK.A) ... has been selling of late, and has left a lot of money on the table.
I thought if there were any readers that would be willing to share when and why they bought PetroChina, their perspectives would be interesting. It would also be interesting if there is anyone that has been following this stock and feels they missed the boat, or on the other hand, thinks it is going to start falling for any reason. Is it time to sell or do some trimming? This post is meant to give readers a platform to discuss oil prices in general, and whether they believe energy should be excluded from the government's inflation figures.
From my perspective, I think energy should be included in the Consumer Price Index, perhaps as a rolling average, to account for volatility, but it should count. As far as PetroChina's sky-high stock price, I am skeptical when anything goes up this much without any earnings news or something about earnings.
Disclosure: I own shares of BRK.B and PTR.
To find potential opportunities and verify my track record, read Chasing Value or Serious Money.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.
Investing in Ontario: Research in Motion (RIMM), Nortel Networks (NT), and IMAX (IMAX)
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Reader Comments (Page 1 of 2)
1. after visiting china a year ago I bot PTR LFC and chl as the growth their is unreal but where do I get off the train as the rise in the stocks is outasite...
Posted at 1:53PM on Oct 17th 2007 by ed samuels
2. I missed the boat on this one completely. Had this on my watch list for a while (since your recommended it the first time), waiting for a drop, and it never came. Oh well. I've come to learn that it is better to miss the boat on such stocks than lose money by buying stocks in haste! :D
Posted at 1:59PM on Oct 17th 2007 by Zaphodbee
3. I bought 1,000 Petro China in early 05 at 53 and sold it in early 06 for 76. Since the late 90s I have bought into non-U.S. companies in countries (Mexico, Peru, Brazil, Russia, India and China) BEFORE it became "the thing" to do. Right now I'm buying in Africa.
Posted at 1:59PM on Oct 17th 2007 by Tom
4. Tom, Where are you investing in Africa. I know of one ETF, but it is country-specific - South Africa.
Posted at 3:21PM on Oct 17th 2007 by monty
5. Zap,
I'm sure you will be studying my 2008 picks even more intently. Last December when I encouraged readers to add PTR to their watch lists ($142.12), the opportunity did present itself between $110 and $120 (where I bought more) and it may present another opportunity if oil prices dip.
Ed,
I do think it might be time to trim some shares in Chinese stocks but not this one and not if your playing with "house money". However, if you own a lot I would trim this one back as well, and take some profits to rebalance. I myself do not always rebalance my portfolio. My ISRG is now the largest holding and I have not sold a share sticking with it from $7.70. to now because all the reasons I originally bought it remain intact.
Peace and good fortune to all.
Posted at 4:00PM on Oct 17th 2007 by Sheldon L
6. I went long in the low fifties and have been watching the chart. I sold 20% of my holdings today at $257.50 to collect my original investment.
PTR is a perfect storm play. Energy, declining dollar hedge, emerging growth market, and a story stock with an amazing chart pattern.
If google is a buy at $600 PTR is undervalued even if it hits $300.
Posted at 4:24PM on Oct 17th 2007 by Vera Capto
7. I am selling most of my holding in Petro China. I still think that the stock will contine to rise in the future however i think it will go down in the next couple weeks. A correction has to be made. When this correction does happen then i will buy more.
Posted at 6:56PM on Oct 17th 2007 by Mark Blitzer
8. Mark,
I like Vera's strategy better; sell some hold some. PetroChina is going up because:
1) Oil is going up.
2) Dollar purchasing power is going down.
3) China is expanding (still)
4) Chinese investors are just getting a taste of equities and there are not that many to choose from and PTR is a "blue chip" stock here and there.
Also remember the market can do irrational things and while I agree the greater probability is that PTR takes a dip "a correction has to be made" is not a certainty.
Finally you must consider your tax situation when selling stocks.
Peace
Posted at 6:58PM on Oct 17th 2007 by Sheldon L
9. I made the move into Petro China at $95 about two years ago on the recommendation Hillary Kramer. The last couple of weeks I've been very excited about the huge surge in the PTR price although, I'm beginning to think about where I should place a stop loss order at to protect my profits and at the same time stay on board PTR and enjoy any future increases in the share prices.
225 to about 230 seems to be where I think any stop loss should be placed here.
Dale
Posted at 10:57PM on Oct 17th 2007 by Dale
10. I bought 50 shares around $ 130 per share sometime back in January. I bought it because I heard from "Financial Sense news hour" that peak oil is coming and countries like China will do better.
Posted at 12:06AM on Oct 18th 2007 by Peter
11. I bought my shares in 2005 at $60 and sold half after returning 100%. I am pleased with the recent returns but think they are irrational. I have placed stop loss orders at 15% below the current price for the last 2 weeks and been adjusting up daily. If you look at their earnings they are trading with a PE greater than 20, nearly double that of XOM and other comparable companies. They also now have the second largest market cap in the world and in the long run I wouldn't expect it to grow much faster than world GDP + increases in demand for oil. Once it falls I do not think I will repurchase. I know there are many different opinions on the subject but the matters in Darfur are disturbing and there are simply too many good investment opportunities to need one that may be causing someone else harm. It is something I have considered this for some time but my personal choice once the stop loss is executed is to happily take my gains and move on.
Posted at 6:33AM on Oct 18th 2007 by matt
12. I bought my shares in 2005 at $60 and sold half after returning 100%. I am pleased with the recent returns but think they are irrational. I have placed stop loss orders at 15% below the current price for the last 2 weeks and been adjusting up daily. If you look at their earnings they are trading with a PE greater than 20, nearly double that of XOM and other comparable companies. They also now have the second largest market cap in the world and in the long run I wouldn't expect it to grow much faster than world GDP + increases in demand for oil. Once it falls I do not think I will repurchase. I know there are many different opinions on the subject but the matters in Darfur are disturbing and there are simply too many good investment opportunities to need one that may be causing someone else harm. It is something I have considered this for some time but my personal choice once the stop loss is executed is to happily take my gains and move on.
Posted at 7:10AM on Oct 18th 2007 by matt
13. I thought I was being clever writing some Oct calls at 160, ha! I am still bullish on oil stocks (demand up, supply down), but I will not be buying back into PTR right now.
I also own SNP and CEO; I think these offer more value. I plan to add to these positions instead.
Posted at 7:22AM on Oct 18th 2007 by EF
14. Just diversifying internationally a bit. Was looking into Chinese stocks. Bought PTR at $115 not even a year ago and GSH (yes, rail) as well. Now looking at TTM (India cars) and may buy if dips a bit.
Posted at 10:54AM on Oct 18th 2007 by CG
15. I bought Ptr about two years ago - it was a WHOLE lot less then - also bought Huang Oil at the same time... Petrochina paid a good dividend and I was and am, a BIG believer in the power of China and the needs they have which can only be fulfilled by manufacturing. Huang Oil hung around (pun) and Hung around doing very little, so I in my idiocy moved on to something else (should have moved THAT money into PTR) as I is - I bought more about 4 months ago - on a down time 112 - and am I ever GLAD.
Posted at 12:36PM on Oct 18th 2007 by Ellen
16. CG,
I wrote about Tata Motors (TTM) and bought it at 15.99 see:
Chasing Value: Tata Motors LTD - patience, patience, GOT IT!
http://www.bloggingstocks.com/2007/06/12/chasing-value-tata-motors-ltd-patience-patience-got-it/!
I agree with you it is one to watch for a long term hold.
Posted at 2:22PM on Oct 18th 2007 by Sheldon L
17. I bought Petrochina years ago when it was trading at around $18 a share and yielding 8-9%. I bought this because it was cheap and had a big yield and no one wanted Chinese stocks because of concerns with Communism and concerns with Chinese accounting practices. Also, no one wanted oil then because it was felt that Iraqi oil would be coming back on world markets. Not long after I bought this there was a report that Warren Buffett was buying shares and sources as distinguished as the Wall street Journal were wondering what in the world he was doing. I bought more on this news. I ended up selling too early though.
Dr. Michael Schneider runs several investment Web sites including http://www.Barrelomoney.com and the international investment Web Site http://www.Barreloworld.com.
Posted at 4:22PM on Oct 18th 2007 by michael schneider
18. PetroChina is allowing people, particularly the
chinese, to benefit from oil in the Sudan, whose
government has been responsible for the atrocities and genocide in Darfur. Everyone should divest from this now.
Posted at 9:39AM on Oct 19th 2007 by zotta
19. I agree with matt. There must be some other commodities you can buy. For more info look at:
http://www.savedarfur.org
Posted at 9:44AM on Oct 19th 2007 by merlinaut
20. I'm shocked that only two replies so far spoke of anything but money. Don't you people ever get your head out of your wallets and read a newspaper? Sudan's govt. is getting rich from oil profits and using 70% of its revenues to fund military activities, which means dropping bombs on primitive villages, burning them out, and sending militias to kill, rape and burn in order to either destroy or terrify the survivors. Over 2.5 MILLION SUDANESE PEOPLE FROM DARFUR are now homeless, living in miserable displaced persons camps, and still at risk of murder and rape if they set foot outside the camp - which they must do to gather firewood. These facts have been known for some time, people! China's oil companies (PetroChina, CNPC and Sinopec) are enriching Sudan's govt. so it can run this military campaign. Also China, as major ally/financier of Sudan, can make a big impact on the Darfur crisis if it pressures Sudan to stop its Nazi tactics and make a reliable peace settlement in upcoming peace talks. The divestment movement is trying to add economic pressure to the on-going political pressure, to get the Darfur crisis to end.
The best argument in favor of divestment is that Sudan's govt. actively opposes it. Last year Sudan spent $1 million on a NY Times supplement to attract foreign investment.
Thru private investment firms and public funds such as pensions, US investors hold billions in Sudan-related stocks. If one large investment after another is sold off, with Darfur stated as the reason, is it possible Sudan won't feel the heat? That govt. has no moral scruples and tells inane lies to avoid diplomatic pressure, but money is something they definitely care about. Divestment could make all the difference.
More info: www.sudandivestment.org
Posted at 7:14AM on Oct 20th 2007 by eshkolit