April 27, 2015

The KGEP Plan

The Kennon Green Energy Portfolio, or KGEP, is a side-project I created in April of 2013. In explained in the first post on the KGEP that it calls for me to acquire a collection of securities, assets, and other property in the energy and natural resource sectors, including, but not limited to, oil, natural gas, coal, generation, distribution, pipeline, refining, and timber. The property is to be held in a custody account at my primary bank, fully paid for, with dividends and distributions direct deposited as another source of income. The time period for the build-up phase is 25 years, at the end of which point, I will consider the program a success if the energy assets, by themselves, are sufficient to keep my family independently wealthy for generations. Like its sister portfolio, the KRIP plan, I may discuss some of the activities on the site from time to time.

Watching Oil Decline 45% Has Made Me Excited

Exxon Mobil 2013 Annual Report

The global benchmark for crude has collapsed an astounding 45% since the summer, with no sign that it will abate anytime soon.  Historically, this is nothing.  To see what a real oil crash looks like, you should read old news articles, magazine essays, and biographies to get some context.  I remember $10 a barrel oil back in the 1990's during my sophomore year of high school, with everyone on television and in print talking about it.  This was around the time I was obsessed with studying the gild … [Read more...]

The Best Wedding Anniversary Gift Ever

Total SA ADR France

Do you know one of the many reasons I know I found my soul mate 12+ years ago?  For our upcoming wedding anniversary, we bought each other shares of Total, SA, the French oil giant.  I'm not even kidding.  The shares have been added to the KGEP. The thought process was, "Why give a gift that will be forgotten in the future, when I can give a gift that keeps paying dividends you can enjoy for the rest of your life?"  That means based on a rough estimate of typical life expectancy, instead of gett … [Read more...]

A 25 Year Investment Case Study of Chevron Stock

Chevron Investment

In honor of the new energy portfolio I'm setting up for my family, I thought I'd do a 25 year case study of an investment in Chevron common stock.  The point is to illustrate how the biggest, most boring companies on the planet are not, in fact, so boring when you look at the remarkable things they achieve for civilization and the huge returns they earn for shareholders. Imagine you wake up back in time, 25 years ago.  It is April 23, 1988.  You have a pile of $100,000 in cash and have to ma … [Read more...]

I Found a Model Total Oil Truck!

Total Oil Truck Replica

I found a replica Total SA oil truck for the collection, which I am planning on keeping in my home study for the new, personal energy portfolio I've setup for my family over the next 25+ years.  It's on its way from Germany.  It is a 1:43 model, not the usual 1:64 model that is more popular in the United States, but that's just a cultural difference.  It occurred to me this afternoon that I shouldn't be using English to find what I wanted.  I switched over to a French search engine and tried to f … [Read more...]

The Oil Tankers Are On Their Way

BP Oil Truck

One of the tricks I use to think of the stocks I hold as real businesses, just like the operating companies we own, is to get a physical representation of the firm, putting it in an investment cabinet.  Now that I am building a 25-year energy portfolio as a personal side project for my household, I already have replica die cast oil tankers on their way from retailers and eBay.  I'm having a hard time finding a comparable quality Total SA tanker, if they are even manufactured. I also bought th … [Read more...]

Energy, Oil, Natural Gas, Pipelines, Refining, Coal and Timber

Example of Royal Dutch Shell Stock Certificate That Has Been Cancelled 640

One of the ways I manage my life is to sit in a room several times a year, staring off into the distance, and trying to imagine 5, 10, 15, 20, 30+ years in the future.  I ask myself what things I wish I had done when I was younger, what things I would have wanted to avoid, what risks I would have wanted to take, and what experiences I would have wanted to have. One thing that has come up several times during these exercises is the concept of energy assets.  A portfolio of energy assets is f … [Read more...]