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  • Writer's pictureIshfaaq Peerally



Like I told you yesterday, I am selling my shares of $VLO and $PSX because I don't want to have 40% of my portfolio in the $OIL industry, which is a risky industry. I want to focus only on upstream companies with operations in the Permian Basin, which is the richest oil region of the world right now. That's why I am investing in $PE and $CXO .

Now, let's forget for a moment the Permian Basin. If you will ask me which is the best company in the $OIL and $NATGAS industry, it is without nay doubt $PSX

First of all, the company is medium-sized and has greater growth potential than big oil companies such as $XOM $CVX $BP.L . If a company has 30 refineries and they build a new one, it will contribute about 3% to the existing business but if they have 10 refineries, it will contribute 10% to the existing business. Smaller is better.

But the reason why $PSX is really the best is because is has a very diversified midstream(pipelines) and downstream business. They operate multiple refineries and also petrochemical plants and the petrochemical industry is pretty safe since we always need petrochemicals such as plastics whether oil prices are high or low.

If we look at the numbers of $PSX, they have the best numbers I know of in the industry.

So, why am I selling it and buying $PE and $CXO ? It is all about risk and reward, I see that there are greater opportunities in $PE and $CXO than in $PSX and that's because I have looked at dozens of oil companies all around the world. But for a beginner, $PSX is still a better option. $PE and $CXO are small companies, they have a lot of growth potential but they are also more volatile.

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