Wednesday, March 11, 2015

Cleaning House, Diversifying Portfolio

I really need to diversify my portfolio away from oil and gas. However, doing so at a time when oil is so low really is bad timing. I'm remaining in some of my more levered plays, such as Linn Energy. I'm also holding on to the royalty trusts.

However, I got out of GasLog (NYSE: GLOG). Lower oil prices have made mid-east associated gas much more competitive, and that bidding has substantially eroded margins for North American and Australian providers. Not only that, but a mild winter in Asia brought dry gas prices down to where the long-distance LNG contracts are hardly profitable. As a result, the LNG trade is going regional and distances seem to be shortening: Not a good sign for the LNG charterers.

I believe that the 'golden age' of LNG shipping will not come, or will at the very least be delayed for awhile. I got into GasLog on the premise of riding that wave, but that just didn't seem to work out.

So, I sold all my brokerage shares and bought into AT&T (NYSE: T) instead. AT&T is now the fourth-largest holding in my brokerage portfolio. This will give me added diversification and an income boost.

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