Stock Performance of PetroChina vs. Oil Supermajors

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On Friday Brent Crude reached the $60 per barrel mark for the first time since July, 2015. Global oil prices have been slowly recovering after years after of declines that followed prices reaching nearly $150 many years ago. Though oil majors are reporting strong earnings recently their stock prices are not yet getting investors’ love fo far.

Of all the major oil companies in the world. PetroChina has plunged the most in terms of stock price return since reaching the peak in 2007. According to a Bloomberg article PetroChina(PTR) was the first company in the world to cross a market capitalization of over $1.0 Trillion. Since the peal PetroChina has wiped out over $800 billion in market capitalization. The chart below shows the dramatic decline in PTR share prices:

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Source: The Biggest Stock Collapse in World History Has No End in Sight, Bloomberg, Oct 29, 2017

The following chart shows the performance of PetroChina against the oil supermajors – : Royal Dutch Shell PLC (RDS.A), Royal Dutch Shell PLC *(RDS.B), Chevron Corp (CVX), Exxon Mobil Corp (XOM), BP PLC (BP), Total SA (TOT) and Eni SpA (E) in the past 10 years:

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Source: Google Finance

The full Bloomberg article is worth a read. The key takeaway is that even if the state is the largest shareholder a company’s stock can decline by astronomical levels wiping out shareholder’s wealth in the billions.

Disclosure: No Positions

US Consumer Goods and Services Price Changes 1997-2017

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Price inflation for goods and services in the US vary widely over the long term. Some items such as healthcare, higher education, childcare, etc. continues to go up year after year like clockwork. Housing is back on the rise after the crash during the global financial crisis of 2008-09. In major metropolitan areas decent housing is unafforable for most working people.

On the other hand, prices for consumer goods like tvs, software, toys, cars, etc. have decreased in the past few years.

The char below shows the price changes in select US goods and services from 1997 thru this year:

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Source: TIPS Improve Income Stability For Lifestyle Goals by Jodie Gunzberg, S&P Indexology Blog

The worst item in the above chart is college tuition. We have discussed many times before why college tuition are soaring every year.

The key point is that despite the the stagnation in wage growth some items increase yearly.

In summary, many of the important things for human beings to live such as an education, medical care, child care for families with children, shelter, etc. are expensive in this country. But useless consumer goods that are “wants” for most humans like TVs, cars, etc. are cheap. Most people would agree that it should be the other way around in any country.