The same reason that made the Covid stocks like $MRNA, $NVAX and others hard to price is what makes oil companies seem cheap.
This is also partially the reason why it is so hard to get the companies to invest into new supply and expand.
This is also partially the reason why it is so hard to get the companies to invest into new supply and expand.
The money is temporary. As we move forward and try to switch to green energy the oil industry will collapse.(even if slowly)
The question is how do you price an assets with longer term negative yield? Does it deserve high multiples?
The question is how do you price an assets with longer term negative yield? Does it deserve high multiples?
Same as COVID, when $MRNA was trading we looked at it thinking it is cheap for current earnings and the next quarters expectations.
Truth is, the more runway a company has, the longer term it is, the more expensive it can become.
Truth is, the more runway a company has, the longer term it is, the more expensive it can become.
The relationship between longevity and multiples is closely correlated.
This short runway is also why we are facing this difficult shortage crisis in oil.
This short runway is also why we are facing this difficult shortage crisis in oil.
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