DO says: However, ALL of them got stopped out when they hit -10% of my average NAV after I had completed those positions.
I ask: So if you had your stop at -10% then, I can only assume that you're using a similar stop now. If oil drops to $50, won't you be stopped out of all your positions well before that point? Or are you not using stops at this (low?) level?

Really good thread! Thanks everybody for sharing. Thanks to DlphcOracl for starting. Enjoyed reading all points.
What strikes me is how fast it dropped. During the 1980 oil bust, which turned Houston into a ghost town, I believe the 70% decline took six years ($33/barrel in 1980 to $10 in 1986) ... this time we're almost there in just three months!
Here's a recent article related to Scott's energy debt posts...from the Houston Chronicle no less:
Memories of '80s oil bust keep bank regulators vigilant

If concerned Mike, remember TRP has Saturday hours, so you could call. I'm actually updating my records this morning and TRP's quote of $25.60 on PRWCX appears correct.
I like Marketwatch's tracker which also shows $25.60 for PRWCX.
http://www.marketwatch.com/investing/Fund/PRWCX?countrycode=US
The X-Dividend is always confusing. Has to do with Fed tax compliance regulations imposed on mutual funds. So they're required to do it. Most often, they drop the NAV by a certain amount and than pay that back to shareholders "of record" on the following day (usually in the form of additional shares of the fund). If you're reinvesting dividends & cap gains and if you're in a tax-sheltered account, they have little bearing on when you buy or sell. I recall once I had the opposite situation - sold a fund the day the dividend was declared and there was a big drop or gain in the markets that day. They sorted it out just fine and there were no unusual consequences.

Example sometimes Demo's best:
I had some extra money on Sept.17th bought VHT for $117.80 no commissions from vanguard Today it is 126.47 (+7.3% profit) in three months, after being down -2.53% this week like everything else, otherwise I make 10%+ for short term investing, still might before EOY ......just saying...Healthcare....

hank -
1. I was not implying that investing under these circumstances is a "no-brainer" - it never is. However, I AM saying that investing in sound, well-managed companies at the present time greatly shifts the odds in one's favor. That is all one can do, especially in buying individual stocks. MFs and ETFs are, to some extent, a different story.
2. Regarding Bill Gross: I have simply tuned him and Mohammed El-Erian out. They talk too much and say too little. I have never heard anything from either one that was investable or made any money for me.
3. Regarding my post of September 23 - I was flat out wrong and I lost money on those investments. As posted, I did indeed proceed to average into several energy stocks and complete those positions. However, ALL of them got stopped out when then hit -10% of my average NAV after I had completed those positions. I never dreamed that:
a. the price of WTI crude would drop this far this fast and certainly did not guess that it would drop below $60. I believe the gurus that believe it may fall to $50-$51 are credible whereas those calling for $40 oil are not.
b. Whiting Petroleum (WLL) would lose 70% of its value in three months and now trade at a price:book ratio of 0.8 or that CLR would lose 60% of its value.
c. Well diversified stocks with peripheral association with oil and energy would also sell off as much as they have, e.g. WLK, LYB, GBX, CP, TRN (although TRN has other issues as well). I cannot believe that buying a large-cap leader such as LYB with a dividend yield of 3.8% and price:book of 3.8 when it has lost 40% in three months will not be profitable in 2-3 years.
One final point: I share your disdain for the "don't catch a falling knife", i.e., don't invest as stocks are rapidly losing value, canard. It is the antithesis of "buy low, sell high" and it make little investing sense. If one uses it to mean "don't back up the truck and buy aggressively" in the midst of a steep decline, I agree. If it is used to say "don't invest when the stock market or a stock is going down, I disagree. At some point, one has to use his/her own best judgment and decide when a stock, MF or ETF has reached a value that makes it worth owning if one has a time horizon of years, not months, and slowly average into a position. It isn't foolproof but investing never is.

I bought going down (no Knifes) how long do you think there will be $2.00 gas and 50-60 oil? any bets?
Oil co's are big profit machines that pay big dividends on a "necessary" product, with shares being sold at reasonable/good P/E s
1+1+1+1 ( + my Profit)=5stars in Tampabay

Thanks guys. This is money in 401k.
It is confusing still. The 401k (T Rowe Price) shows a transaction buy cost of $25.60. Yahoo shows yesterdays closing fund value as $25.60. Morningstar's un-reliable data still shows previous day price of $28.53.
I'm guessing as you said Hank, that it gets sorted out.

Delphi - I think you miss most of my gist.
I have been dollar averaging into both an oil heavy commodities fund (QRAAX) and an energy heavy NR fund (PRNEX) for a couple of months now. I've actually taken some heat on this board for trying to catch a "falling knife" to the point that I won't even respond to Scott's "What are you buying ... selling..." threads any more.
The point I wanted to make above is that "buying down" is not an easy proposition. It's not the "no-brainer" you seem to imply. It's definitely not for everyone. Sorry if I ruffeled your feathers. No intent to do so.
Gross was commenting on recent Fed Governors' statements. That's all.
If he was dispensing any investing advice, I missed it.
BTW: Here's what you had to say about oil prices in Scott's thread on September 23: "The price of crude (WTI) may go a bit lower but not much - perhaps a few dollars..." http://www.mutualfundobserver.com/discuss/discussion/comment/47977/#Comment_47977
In fact, the price of WTI has fallen from around $91 on September 23 to $58 today.
http://www.traditionenergy.com/morning-energy-report/morning-energy-report-september-23-2014

Hank:
1. Bill Gross has been "right" about very little for several years. Not the guru I would take my investing lead from.
2. A 50% drop in NAV is not important in and of itself. However, when it results in a well-managed stock with clearly defined assets trading at or below its book value, it's called an "investing opportunity". If you do not invest under these circumstances, then "when" ??
3. Do not depend upon an MF manager to make the difficult investment decisions for you. Very few have the cajones to invest when good stocks are on sale and are no more likely to do so than you are. Look above at my reply to Derf and see how most MFs did in 2009. Whether or not they beat their bogey, i.e., their sector peer group average, in 2009 will separate the MF manager wheat from the chaff.

There are lies, darned lines, and ... Some of these figures are wildly off if read without the footnotes.
Ms. White's published speech footnote 1 says that the $63 trillion figure came from an analysis that tended toward double counting. That's generous, as the ICI figure (from 2014 Investment Company Fact Book) is less than half: $30.0 trillion invested worldwide, and "just" $17.1 trillion in the US.
Likewise, footnote 2 says "certain entities" were double counted in coming up with almost 10,000 funds. (The ThinkAdvisor reporting omitted "almost".) The number is actually closer to 7500. M*'s database (using its premium screener and "distinct portfolio only" filter) reports 7,353 distinct mutual funds (and 1672 ETFs), while the ICI reports 7,707 US funds, and 76,200 worldwide.
Ms. White talks about the need for "a more comprehensive approach ... to address the risks associated with ... the use of derivatives [by mutual funds]." Meanwhile, Congress is debating a relaxed approach to the use of derivatives by banks with FDIC-insured money.
When funds use derivatives (or any other vehicle) it's your money - you win or you lose. I'm not one to play fast and loose with my investments, but at least it's the same person who stands to win or lose by these risks. (So clear disclosure might be sufficient - investors can dial up or dial down their risk.) With the banks, it's heads they (their executives and shareholders) win, tails you (the taxpayer/FDIC) lose.

Hi Scott: You are are correct. A further 50% drop to the $25-$30 dollar area would signal something very wrong with the global economy. I won't, however, rule it out.
My point was more that percentage numbers can be deceiving. From a purely mathematical perspective, there's always another 100% left.
I liked Bill Gross's comments on Bloomberg Friday. In effect - the Fed appears to have their heads in the sand (my words - not his) on this deflation question.
Added rambling: There would seem to be strategic opportunities in all the service industries you cite for a good fund manager to make you some money if you have time to wait. I'm optimistic and will increase my allocation to the broadly diversified natural resource sector as we near $50 and $40. On the other hand, these funds will be facing enormous outflows as investors panic and flee. So, it will be a little harder for even the best managers to turn their funds around.

I wrote a thread with some concerns regarding the fracking theme in June: http://www.mutualfundobserver.com/discuss/discussion/13960/some-concerns-with-the-fracking-theme
I didn't think that the concerns would quite lead to this end result, but I do think that:
A. You still stay away from small, aggressive and over-leveraged. Oil feels like it has no bid and it could easily continue lower. If it does, you are already seeing distressed debt for smaller companies. You have $550B in energy debt and many of those companies weren't making money - now they REALLY aren't. There are values already for those with a longer-term time horizon, but I'd really stay with the more mid-to-large players and away from the speculative, smaller, highly indebted ones.
B. There are companies that are not oil companies that have gotten hit because of this. Railroads are down. Obviously, oil by rail is a big story, but railroads aren't going anywhere and oil certainly isn't the majority of what these railroads are carrying.
C. The pipelines have gotten hit but they are not price-sensitive, they are volume sensitive. Many of the pipeline companies that I follow have been positive - Interpipeline (IPPLF) had a great quarter and raised the dividend. Doesn't matter, stock still gets obliterated.
"Oil's lost 50% this year. Next year it can still lose another 50% .... and another 50% on top of that if it wants to."
If that happens, what does the market as a whole do, as that's saying something considerably worse than mere oversupply issues.

FYI: Securities and Exchange Commission Chairwoman Mary Jo White says the Commission is taking a magnifying glass on the regulation of the asset management industry and mutual funds in particular, pointing out that in 2013, 57 million American households, or 46% of those households, are invested in one of the 10,000 U.S. mutual funds that hold more than $63 trillion of assets under management.
Regards,
Ted
http://www.thinkadvisor.com/2014/12/12/secs-white-vows-to-get-tougher-on-mutual-funds?t=portfolio-construction&page_all=1

Hmm ... Very difficult to pull off. Markets can remain irrational longer than most of us can remain solvent. The time needed for a bounce-back can be painfully long as those of us who thought Japan looked cheap in 1997 learned the hard way. It looked even cheaper a decade later. Percentages are funny things. Oil & some producers have lost 50 percent this year. That might imply some kind of floor? Nope. They can still drop another 30, 40, or 50 percent next year if they want to.
It's very hard to time incremental purchases going down. Tendancy is to buy too early, than to throw good money after bad, than to get frustrated and bail at a loss before rewards are realized.
However, rewards can be phenomenal if one gets it right.
Delphi - I've been doing what you recommend with the "play money" segment of my portfolio (less than 30% of total assets). And it hurts. I believe that 3 or 4 years from now I'll be pleased with the results. However, that's not for certain. Get into a serious deflationary spiral and all bets are off.

Reply to Derf:
1. I cannot say or recommend what you should do with regard to buying individual stocks because I do not know how it fits in with your current investment portfolio and temperament. You certainly can purchase or average into some of the ETFs or ETNs that have been beaten down and increase your exposure to the energy sector.
2. Regarding your MF managers: Your MF managers SHOULD be looking for bargains and unjustly beaten down stocks and scaling into them . However, most will act as if they are "deer caught in the headlights" and do nothing until well after the fact because they are seeking a false "margin of safety". AFTER these stocks have bounced back and gained 25% to 50% in a few months they will THEN have their security blankets and begin nibbling. How can you tell which of your MFs have managers that are investors or deer?
Very simple. Take each MF you have and look it up on Morningstar (M*). Click on "Performance" and then click on "Expanded View". This will show your fund's performance year-by-year for the past ten years. Now, go to the year 2009, which is when the bear market ended and the market reversed violently to the upside, and see how your MF did compared to its peers, i.e., compared to the average for its M* sector. If your fund did not outperform its peers in 2009 then its manager was asleep at the switch or frozen with fear and did not buy stocks when they were extreme bargains.
As an example: WSCVX (Walthausen SC Value fund) returned 42.39% in 2009 compared to the M* SCV average of 31.32% in 2009. Clearly, Walthausen scooped up value stocks and the fund lived up to its name. OAKLX (Oakmark Select) is another example of a fund whose manager, Bill Nygren, bought aggressively at the bottom, returning 52.46% versus the LC blend average of 24.29% for that year.

A 50% decline in the price of WTI crude over the past three months without any fundamental change from what has/had occurred throughout the first half of the year, and the extreme selloffs in many energy stocks and other stocks with peripheral association to oil is a gift from the gods. In any given 1-2 year period there is a stock market black swan event that is totally unexpected and unrelated to the fundamentals. Rather, it is an emotion-driven event that takes on a life of its own, overshooting to the upside or downside.

The stock market is a forward discounting mechanism - not backward looking. This decline might be overdone. But, the oversupply/storage and production are real as is the weak economic projections for many countries.
So, there may be a bounce, before continued decline.
"Don't try to catch a falling knife." Dex

A 50% decline in the price of WTI crude over the past three months without any fundamental change from what has/had occurred throughout the first half of the year, and the extreme selloffs in many energy stocks and other stocks with peripheral association to oil is a gift from the gods. In any given 1-2 year period there is a stock market black swan event that is totally unexpected and unrelated to the fundamentals. Rather, it is an emotion-driven event that takes on a life of its own, overshooting to the upside or downside. This is an extraordinary investing opportunity and you should have already made your Xmas shopping list and be averaging into the best of the stocks and ETFs that have been decimated.
Examples:
1. Mid and small cap energy stocks: WLL, OAS, CXO, CLR. These are NOT stocks with extraordinary debt or leverage within their sector and they have declined between 50% to 70% in just 3-4 months. WLL already trades well below book value.
2. ETFs: energy exploration & production (PXE, PXI).
MLPs (MLPI, MLPX)
3. MLPs: EPD, MMP, PAA, WPZ. These are companies that transport oil or natural gas and are involved in various aspects of the energy infrastructure. A high percentage of their revenues come from long-term, fee-based contracts with built-in price escalators. They will get paid regardless of the price of WTI crude and the energy demand in the US shows little sign of abating. The U.S. is not in a recession nor does anyone really see one on the horizon based upon recent employment data, retail sales figures, corporate profits, etc., These stocks have sold off about 20% in three months and they pay dividends between 4% to 8% (WPZ).
4. GLOG (GasLog): Off nearly 50% from its high this year, price:book ratio of 1.5 and a nearly 3% dividend. This stock is involved in liquid natural gas cargo transport and the price of WTI crude should not logically result in a loss of 50% NAV. Do you really think the demand for inexpensive natural gas by emerging market countries and European countries that are totally dependent upon imports for their energy needs will evaporate for the remainder of the decade??
5. Transports: Specifically, the railroad stocks: GBX, TRN, CP, CNI. Railroad stocks with ANY exposure to transport of oil have also been dragged down, even if oil transport makes up a small fraction of their total business.
6. Chemical stocks: WLK, LYB. Both stocks are involved in oil refining and production of gasoline additives although this is not a majority of their businesses. Both have lost 45% in the past three months and LYB sports a dividend approaching 4%.
I could go on but the point is obvious: if you are not slowly buying ETFs and top quality stocks that are now on sale by averaging in you need to ask yourself what you are waiting for. Are you the same "investor(s)" that would not buy stocks or ETFs in March 2009 after the S&P 500 had lost 55% of its value because you were waiting for it to decline another 20% ?? Because the CNBC "experts" said the S&P 500 was going to decline to 400 or 500 and the world's financial system was going to collapse and vaporize??
FWIW, I am slowly buying into many of the above names with the understanding and expectation that my initial positions will lose between 5% to 25% over the next month or two. However, that is why one slowly scales into a position. When the turn does come it will literally happen overnight and these stocks will gain 5% to 10% a day for several consecutive days and then you will say that you've missed the turn and it is too late to get in.
These are not dot.com stocks or biotech stocks with promising Phase I or Phase II trials for a single drug. These are established, well run businesses with very real assets and earnings. You will not catch the precise bottom but 2 or 3 years from now these will be very profitable investments and you will ask yourself why you missed this investing opportunity.

ACDJX was down 7.11% and ARYVX down 5.86%. I'll have some extra shares for the future so as always its not the big loss it seems.

Hope nobody's fund decides to declare X-Dividend today (on top of the already formidable drop).
Might be too much for some.
Oil sure looks like it wants to go to $50 fast --- or maybe $40 or $30?

FYI:
Regards,
Ted
WSJ Slant: http://www.wsj.com/articles/u-s-stock-futures-drop-along-with-oil-prices-1418390833
Bloomberg Slant: http://www.bloomberg.com/news/print/2014-12-12/u-s-index-futures-fall-after-s-p-500-rebound-as-oil-outlook-cut.html
Reuters Slant: http://www.reuters.com/assets/print?aid=USKBN0JP1DA20141212
MarketWatch Slant: http://www.marketwatch.com/story/us-stocks-end-with-biggest-weekly-decline-in-years-2014-12-12
Markets At A Glance: http://markets.wsj.com/us
Sector Tracker: http://www.sectorspdr.com/sectorspdr/tools/sector-tracker