 Good day, fellow investors. Rex Tillerson is out of the White House and Exxon is down 10-11% year-to-date. Let's discuss the company, look at the fundamentals, look at the risks, reward, and look at what is that dividend of 4% that is attractive to a lot of you. Is it worth the risk and the reward? Let's go. So Exxon didn't deliver as expected earnings in February and then the stock price dropped immediately and then it even drifted more because investors the market is adjusting to some things that we're going to discuss today. Those are increased interest rates and oil, electric vehicle trend. The reason for this drop is that production was down and earnings came in at 88 cents, which missed expectations by 15 cents. The revenue miss was 7.7 billion on the 66 billion of actual revenue, so big, big misses on expectations. Further, Exxon announced higher capex spending in order to improve productivity over the long term. Let's look at the long term perspective. Oil prices have rebounded more than 100% since their dip in 2016, so that's very good for oil companies. This is Exxon's expectation for demand. They see higher expectation for oil constant slow growth of 11. something percent over the next 20 years and huge increase in demand for natural gas. They see that if oil prices stay where they are, potential increase in earnings by 2025 will be above 135%. If oil prices go to 80 and stabilize their 200%, if they are at the average 2017 price, we will see 100% increase in earnings. If they drop to 40, just a 35% increase in earnings. The current earnings are 4.62, thus the expected earnings per share by 2025 would be 6.23, 9.45, 10.8 or 15 in case of oil prices at 80. So the price to earnings ratio would then be 12, 8, 7 or 5. So this is Exxon's expectation about what can happen. As investors, we always have to take the management's expectation with a grain of salt. Let's see what's going on against Exxon in this fast changing world. Number one, New York City lawsuit where the city is suing petroleum majors for climate change effects. This might not be a big deal, but it can be a big deal, especially if the story continues, if there is more talk about climate, if there is more talk about internal combustion engines and switching to electrical vehicles. And that brings me to the next trend, which is the electrical vehicle trend. And here there is a big divergence between what automotive companies expect and what oil producers expect. Who will win automotive, electric vehicles or oil companies? Let's dig into the trend. Even the OPEC had to readjust its projections for electric vehicles by 2040. They used to think that there will be only 50 million of those, but they are now quintupling that projection to 266. This will have a big impact on oil sales. If we look at what's going on, who is the forecaster and how they see the electric vehicle situation? We can see the OPEC 266 million, Bloomberg is much more positive, 500 million by 2040, the International Energy Agency 558 million cars by 2040, Exxon sees just 100 million electric vehicle cars by 2040, Stead Toil 30% of sales by 2040, which is huge. Automakers see about 300 million by 2040. My personal feeling is that those assumptions will be all wrong. All wrong. If we look at what the International Energy Agency expected in the 2000s, we'll see how what's going on already blew that estimates away. Now the agency estimated a slow, slow ramp up. That's what never happens. Actually, we are way above the most optimistic expectations. And those trends move exponentially, not linearly as everybody is forecasting it. So what does this mean for Exxon? In the long term, the current daily production demand supply of oil is around 90 million barrels. Electric vehicles, if they just take 10% of that production of 9 million barrels of the demand, you will see a huge drop in oil prices because just 1.7 million overproduction in 2009 made oil prices crash from 120 to 40 something. And that's the risk of investing in oil. You see those stable trend, huge crash. Stable trend, huge crash. Let's see. So in 2008 oil was above 100 going to 140 and then it crashed like crazy to the 40s. Then came the shale oil revolution and then we again saw a crash. What will happen in the next recession? Exxon is doing all linear production, linear estimates, but that's not the case and will never be the case with oil. Especially if the electric vehicle trend, if those batteries become cheaper, it could mean a lot of disruption. So my point is that if we look at Exxon's 10 year stock price, you can see that it went nowhere except for the dividend. The trend is negative, structural trends are changing, the winds are changing and I don't think that Exxon will be the great investment it was as it was up to 2007. So you have to see how long are you going to hold Exxon, what's the impact on oil prices, what will be the demand for oil in the next recession that will inevitably come with the tariffs, perhaps with less global trade? Those are huge, huge impacts on Exxon. On the electrical vehicle trend and the risk to impact Exxon, nobody knows when it will happen. It's impossible to know, but what we know is that when a new technology comes in, when the cost of those technologies become lower than the competitive technology, that adoption is extremely fast. The iPhone came out 10 years ago, but when Steve Jobs presented it, nobody expected that it will change the way we wear watches, the way we chew gum, the way we communicate, the way we pay things, that it will have so much disruption, the way we make photos. Cameras are so old-fashioned now and something like that might affect the oil industry. So when you look from a long-term perspective, this is what you have to watch. What is my orientation, investment orientation? Am I willing to risk everything that's going on for the 4% dividend or is the valuation too high and I should wait for Exxon at a much, much lower level if I really believe that oil won't get disrupted? Looking forward to your comments, these long-term trends are extremely important for long-term portfolio investing success. See you in the next video.