Diamondback Energy: Bank of America Says Buy, I Say...Believe It!

A Trade War? A Price War? Sounds Like Tuesday.

So Bank of America thinks Diamondback Energy is a 'buy,' huh? Analyst Kalel Akamine bless his heart upgraded them. Says the oil markets are facing a 'trade war' and a 'price war.' Well doesn't that just sound like my average Tuesday? One minute you're up the next you're staring down a barrel of trouble. It's all about managing risk just like in my… previous ventures. This Akamine guy he's talking about 'defense and value.' Sounds like a good product quality stuff. Maybe not 99.1% pure but you get the idea.

Diamondback: Not Exactly Blue Sky But...

Diamondback's stock is down nearly 16% this year. Sixteen percent! Ouch. But Akamine bless his optimistic soul thinks it's temporary a 'share overhang.' I tell you what: everyone has their down days. You’ve just gotta apply yourself you know? But like I said even with a levered balance sheet I'm seeing value. It's about potential Jesse! Always about potential.

Cash is King (and Queen and Jack...You Get It)

This Akamine guy is fixated on near term free cash flow. Free cash flow is good. Very good. It's like having a barrel full of... well you get the idea. You need money to run your life your business your family... even if that family is a bit shall we say *complicated*? I guess the same principles apply whether we are talking about Oil or... other stuff...

Assuming De Escalation: A Dangerous Game

He *assumes* a de escalation in the price war? Well assuming is like... putting on skinny jeans at your age! You're asking for trouble. I never assume anything. You have to be prepared for anything. Still you're in the empire business so I guess you can't be too cautious. Sometimes you just gotta roll the dice right?

My Take: Tread Lightly But Tread

So what's my expert opinion based on… let's call it 'extensive business experience'? Diamondback Energy might be worth a gamble. But remember no half measures. You go all in or you stay out. And always *always* know your exit strategy. Things don't always go as planned especially when you're dealing with volatile markets... or volatile partners.

Stay in My Territory

Remember my words people. Stay out of my territory and we'll have no problems. Whether we're talking about oil or anything else. If Bank of America and this Akamine guy are right maybe Diamondback is a good bet. But if they're wrong? Well let's just say I know a thing or two about dealing with consequences.