My reasoning is as follows:
- Shell is a fundamentally sound company and also important: it's an integrated energy company. Lower oil prices are obviously bad for upstream business (exploration and production) but margins for downstream operations (refineries) are increasing.
- Management seems to be doing a good job with unloading assets at times with higher oil prices and buying back shares when prices are low.
- Oil prices will fluctuate. They have so done in the past and will do so in the future. I still see future potential in the oil business (like for 20-30 years or so) before alternatives are economically feasible and provide enough (and stable!) energy. The world's population is growing to 9 billion people and these people need energy. Shell can and will provide these needs.
- The dividend yield of 8% looks awesome!
- I wanted to strengthen my EURO-denominated part of the portfolio. About 75% of my stock portfolio is listed in US dollars. I am not too uncomfortable with that right now, but it still provided me with an extra argument to purchase RDS.
What do you think of my purchase? And my reasoning?