The Most Refreshing Article I Have Read

Pump Rage? Get Even by Buying ExxonMobil

Here are some great quotes if you don’t want to read.

Unless you are a vegetarian city dweller who walks to work, has never let a plastic fork touch your lips and has never bought a cheap Asian-made cell phone, then you need to shoulder some of the responsibility for our consumerist culture’s absolutely extraordinary demand for crude oil and its refined byproducts.

Someone who actually puts a little blame on American culture. Brilliant.

Impossible? Well, hear me out before you click away from this column. Because despite what you may have heard, there really is a shortage of refined oil products in the world marketplace today, and we are never, ever going back to the good old days of absolute abundance when we didn’t need to share. Nor should we.

And there’s the reality check with a small condemnation of the old way of doing petroleum business at the end.

In a situation when solutions are scant, it is easy to just fall back on the easy ploy and accuse service-station operators of price gouging. But that really misses the point. The independent station owner is almost as much of a victim as the consumer, as he faces escalating wholesale costs, rising credit card fees and the enmity of his customers.

Jon D. Markman does a good job of defending some of the more blamed people in this whole mess, the oil companies and the owners of gas stations.

Bottom line is, if you are mad about it, buy some stock. You don’t need a whole lot of money to invest with sites like sharebuilder.com. Here’s some good, sound, reasoning.

In other words, the most profitable company on the planet, which has $5.33 a share in cash and is growing in excess of 10% a year, is getting a commoner’s valuation. If investors were merely to decide to give Exxon the average valuation of the market, and it earns just the consensus of $6.75 per share next year (which I think is way too low), it would be trading at $101, or 20% higher than the current price.

Exxon is not trading at $101 now, because investors apparently believe that oil prices and refining margins have peaked and that its earnings will begin to backslide next year. I believe that is wrong, and I believe you should be loading up on Exxon on dips both for your retirement accounts and to offset your extra costs at the pump.

And there are also frequent dividends.

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