A Splendid Example of Short-Term Thinking at its Worst

Don’t be fooled into thinking short term missteps matter.

The Motley Fool

Something that we Fools must constantly be filtering in this age of information overload is what’s meaningful, and what’s not.  Unfortunately, this equation is heavily skewed toward the “not” and this can be harmful as we attempt to achieve our financial goals.

A prime example of this dynamic appeared in this week’s media.

A mid-week article indicated that because of a maintenance over-run of 21 days, Canadian Oil Sands (TSX:COS) is going to struggle to achieve the low-end of its production guidance for 2013.  The article was drawn from the work of a sell-side analyst who has crunched the numbers that surround this possibility.

While this type of coverage has the potential to cast a shadow over Canadian Oil Sands and the Syncrude oil sands project that it’s the biggest owner of, it’s 100% meaningless to the intrinsic value of this company.  Granted, this bit of news didn’t appear to move the stock, but it can change investor’s opinions.  It shouldn’t, and here’s why.

Long-life asset

Canadian Oil Sands owns 36.7% of the Syncrude oil sands asset.  Its partners include the likes of Imperial Oil (TSX:IMO) with a 25% stake, and Suncor (TSX:SU) with a 12% stake.

Syncrude was first introduced to the world in 1964 and produced its first barrel of oil in 1978.  The consortium now produces approximately 100 million barrels of light, sweet crude oil from Alberta’s oil sands on an annual basis.

While this annual production may sound significant, what’s truly remarkable about the asset that Syncrude owns is the size of its reserves.  These reserve figures for Syncrude, as well as Canadian Oil Sands’ share are tabled below:



Cdn Oil Sands

Proved and Probable









Billions of barrels of oil;  Source: Company reports

At its current production rate of about 100 million barrels/year, and assuming only the proved and probable reserves are valid, Syncrude is going to be producing oil for the next 46 years!  Again, this 21-day maintenance hiccup and slight miss on scheduled annual production is small potatoes when the asset is put into perspective.

Foolish Takeaway

Always be skeptical!  Whether it’s a talking head, or a reputable financial publication, most of what we see and hear is meaningless over the long-term.  Though the market schluffed off this bit of “news” relating to Canadian Oil Sands, often times this is not the case.  And as we expressed in this week’s edition of Take Stock, reacting to such short-term related items is one of the worst things that you can do as investor.  Stay vigilant against such items!

Canadian Oil Sands is going to be pumping oil, and profits for years to come.  For a look at 3 other, non-commodity oriented companies that are going to be producing robust results for a long-time, click here now and we’ll send you our special FREE report “3 U.S. Stocks That Every Canadian Should Own”.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler owns shares of Canadian Oil Sands.  The Motley Fool doesn’t own shares in any of the companies mentioned. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

Target. Stand out from the crowd
Dividend Stocks

The Best Stocks to Buy With $1,000 Right Now

Canadian Natural Resources stock and another reliable dividend stock could be best buys for high investment return right now.

Read more »

oil tank at night
Energy Stocks

The Best Canadian Energy Stocks to Buy for Dividends

Even growth investors will want to have these high-yielding energy stocks on their watch lists.

Read more »


Buy the Dip: 3 Stocks to Buy Today for a Big Profit in 5 Years

Here are three Canadian stocks you can buy now at a discounted value and hold for the next five years for big…

Read more »

Businessman holding AI cloud
Tech Stocks

Before You Buy NVIDIA, Here’s an AI Stock I’d Buy First

NVIDIA (TSX:NVDA) is a great company, but one TSX AI stock is a better value.

Read more »

Dots over the earth connecting the world

Canadian Stocks Set to Dominate the Global Market

Here's why I would personally overweight Canadian stocks in my portfolio.

Read more »

stock research, analyze data

2 Top TSX Stocks I’m Considering Buying in September 2023

Bank of Montreal (TSX:BMO) and Canadian Pacific (TSX:CP) are intriguing TSX stocks worth consideration, even as they recover off their…

Read more »

Stocks for Beginners

Canadian Investors: 2 Oversold Canadian Stocks to Buy Now

These Canadian stocks continue to trade in oversold territory, creating a prime opportunity for investors to pick them up today.

Read more »

Make a choice, path to success, sign

2 TSX Stocks to Buy This Month — and 1 to Avoid

Are you interested in buying stocks this month? Here are two you should consider and one you should avoid in…

Read more »