Less Supply of Chevron

JC Parets
January 27, 2023

We like to keep things simple around here.

When there is less supply of something, and more demand for it, the price goes up.

That's how markets work.

So first it was Warren Buffett aggressively buying shares of Chevron. He now owns over $30 Billion worth.

This has been a very very good trade for us.

Warren Buffett was the smart money. And we listened.

Now this week, you can argue that the even smarter money, the company itself, announced a $75 Billion Buyback.

In other words, with all the money that Chevron is making these days, they believe the best thing they can do with all that cash is to buy their own stock.

And so $CVX is now making new all-time highs, again:

Now, as well as this stock has done for us this year, I think there is still plenty of room to run.

We're buyers of a breakout above these former highs, and all the details of the trade can be found here.

Uncle Warren keeps taking away supply of $CVX. Now the company is taking another 20% of shares away.

All things being equal, what does that suggest for the direction of the price?

Our bet is that it continues to go up.

Clearly that's the bet that Buffett is making. And so is Chevron itself, for that matter.

When you match that up with the relative strength we've been seeing in Energy Stocks, what else do you need?

I'm adding to positions if this move can stick.

How about you?

Are you paying attention?

Or are you going to ignore these recent developments?

Chime in here and let us know what you think!

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