The Unescapable Evils of Debt

A reader said yesterday: “I think our federal and state governments should spend some effort educating people about the evils of borrowing money.”

Another reader responds: “That’s like asking Satan to teach Sunday School. 

“Our various governments (local, state and federal), are completely debt-based… and we’ve learned well from them. 

“A population that is enslaved to debt is also enslaved to their jobs and thus extremely easy to manipulate and control — what more could a government ask for?”

Sad, but likely right on point.

Another reader: “I try not to borrow money. I don’t believe in dealing with interest. My last car note was 1970. I always try to save for the rainy day.”

Forget the government for a minute. Governments obviously abuse debt. Let’s talk about real people, like us.

Debt is a tool. Like any other tool, used properly it can help you. Used foolishly, it will hurt you.

Why do you think people, knowing the risks and pitfalls, misuse debt?

We’ll share more of your thoughts on Monday.

Your Rundown for Friday, November 1, 2019:

Exxon… Remember Them?

Investor’s Business Daily this morning says Exxon (NYSE: XOM) beat Q3 earnings but missed on revenue. Chevron (NYSE: CVX) also missed on revenue.

At writing, XOM stock is up $0.51 or 0.78% at $68.10.

Six months ago, XOM was at $77.50. A year ago it was $82. Three years ago it was $87.

Granted, energy generally has been a tough slog the last few years. And you could make a case you own XOM for the 5%+ dividend yield.

But a strange thing has happened for the energy majors the last few years. As technology has given them more access to more unconventional oil deposits, they’ve recovered more oil at lower prices.

Consider, as IBD reports this morning, XOM’s Permian Basin production increased by 70%.

A generation ago, the Permian was an oil recovery ghost town. Today, it’s leading the charge toward complete American energy independence.

CVX, in their earnings release, reported a 35% increase in Permian production, now up to 455,000 barrels a day.

A Forbes estimate suggests unconventional production in the Permian can be profitable for the oil majors as low as $40 a barrel.

We are lightyears away from a decade ago… the fear of Peak Oil… a scarcity mentality when it came to energy.

The ground has shifted beneath our feet in the last ten years. It is one of the most underappreciated, under-reported, and amazing economic transformations of the last century.

Yes, XOM and CVX aren’t the profit generators they were ten years ago. But they helped secure America’s economic future for the next 50 years.

Long term, you could do a hell of a lot worse than owning XOM and CVX. This story has decades yet to run. Now let’s check in on the markets…

Market Rundown for Mon. November 1, 2019

S&P 500 futures are up 16.40 at 3,053 this morning.

Oil is up $0.79 to $54.97.

Gold is off $4.10 this morning at $1,510.

Bitcoin sits at $9,170.

Have a good weekend. We’ll catch up Monday.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown and has been with Agora Financial / Seven Figure Publishing since 2005. He's been covering technology and markets for over a decade.

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