Friday, July 04, 2008

Swift Energy
Below is a chart from the Wall Street Journal showing Swift Energy's (SFY) five-year stock performance - a rise of almost seven times. Swift used to syndicate oil and gas partnerships with the objective to provide steady income over a long period. Most, if not all, of these long-term oil and gas investments struggled to return investors' initial capital and produced inconsistent income. I have not checked their status lately, or even know if they are still in existence. (It'd be a nice story if somehow these deals were exchanged for SFY stock.)

You can bet that none of the investors in a Swift partnership made seven times their money over five years. To be fair to Swift, none of the oil and gas syndicators of the 1980s and 1990s had great deals. The oil and gas deals back then were viewed through a prism of their ability to return investor capital. This is a pitiful benchmark for success. The under performance of the oil and gas partnerships from the '80s and '90s offer a cautionary tale for today's investors scrambling for oil investments.

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