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…
The Kennon-Green Family Energy Portfolio, or KGEP, is a side-project I created in April of 2013. 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.
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.
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.
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. A topic that has come up several times during these exercises is the concept of energy assets. A portfolio of energy assets is fundamentally different in nature than almost any other security, business, or holding.