My Portfolio Is Leaking Oil

This year has been a tough one for the energy sector. I honestly thought we would see recovery in Q4, but it might be another year away. All year I have been buying positions with familiar names – Chevron (CVX), National-Oilwell Varco (NOV?), Kinder Morgan (KMI), ConocoPhilips (COP), BP, etc. I am long oil, but my portfolio is energy heavy. I decided to sell a few positions today to diversify my portfolio. Added up, my energy sector stocks represented 16.2% of my portfolio. Today I decided to sell of some shares which dropped my energy allocation to 14.4%. I plan on making 2 more stock buys this month which should drop my exposure to 10%, which is the level of diversification I am looking for.

Kinder Morgan I sold 100 shares of Kinder Morgan (KMI) today at $17.23 per share totaling $1714.47. I was overly excited earlier this month when KMI was falling off a cliff. I bought 100 shares at $20.52 and 100 more shares at $17.79. These two buys took my KMI share total to 350 shares. Fast forward a few days and a 75% dividend cut announcement. I still like KMI and I am holding 250 shares. I think the company will right the ship and start increasing dividends again. Additionally, the business as a whole will be much healthier which I see as a signal of a stock price increase. Given the dividend cut, I decided to sell my last lot of 100 shares that I bought for $17.79 a share. This sale resulted in a loss of $72.38. Considering all the negative press surrounding KMI, this is in my opinion a manageable loss. I plan on selling covered calls to cut my cost basis over the next 6-months.

Petrobras I have bought and sold Petrobras (PBR) several times this year. This stock has bounced between $4 and $10 dollars this year. I sold my last 100 shares today at $4.88 per share, totaling 967.25. I sold for three reasons, 1 – Petrobras doesn’t pay a dividend, 2 – My energy sector exposure is too high, 3 – I wanted to sell now to protect my gains. This year PBR has netted me $1,632.39 in income.