Oil <$60/barrel, time to buy stock
- Thread starter mr lovah
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overgrowem
Well-Known Member
Solid bounce may not be any more than a relief rally. !st rule in successful investing: DON'T TRY TO CATCH A FALLING KNIFE. U.S. has massive new reserves, I suspect other countries picked up some goodies also.Bolivia will be coming on line fracking shortly.Poor nations can't sit on their resources,more supply to come. Bottleneck now is transport and distribution, short term problems.When we can supply Europe, short term bottom may be seen (Russian production must go somewhere: read cheap). Other massive usage cut -backs coming (combustion engine going the way of old soldiers).Equipment manufs. and service Cos. may work out, rest speculation at this time.
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WHODAT@THADOR
Well-Known Member
Didn't say "solid bounce". Said "solid-looking bounce". Those are two very different things as I am sure you would agree. I know the game quite well and was merely trying to enlighten the OP a bit. That, however, was a waste of time.
As for "reasons" in regards to what is going on with the oil price, there is only one that matters in my view: credit is contracting, globally. In less than six months, the price of oil has been cut in half. I don't see that as a result of production.
Just for fun, I will add two predictions:
1. The coming low will mark the final end of cheap oil.
2. Oil will bottom at < $10 per barrel.
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It got to the point where it was cheaper to buy it on the open market than to dig it out of the ground. That marked the bottom.
There will be a time when gold is once again a hot investment. It is trending down at the moment but cannot be simply lumped in with other commodities due to its monetary usage. There are some derivative situations which could radically affect the price of gold...at any time. Especially problematic is that after the governments of the world have finished trashing their fiat currencies, they may well turn to gold as a backing for reasons of confidence. It has happened before. Such a situation would not be of benefit to most private gold investors.
mudballs
Well-Known Member
regardless of foresight what hurts in hindsight is i could have bought @300 and sold @1300 11yrs later (ballpark). i had a hunch when it was @700 and didn't commit and stopped tracking it. i went strictly dividend yielding i don't like gambling.i feel good about most of my decisions except that one. cyclical industries have me interested in bio/medical but there's no dividend yielding bios i like. staying pat for now.
overgrowem
Well-Known Member
Enlighten the OP a waste, true. You are ,imo, right that credit is the force driving prices for the medium turn, although the Saudis are a factor. I don't think you give enough credit to better dist. and new supply just a little farther out. #2 Oil will bottom very low, I see it hugging the bottom for some time unable to overcome a glut of new wells, etc. #1 End of cheap .........Think about that for awhile.
Well, well bluerock
It's been several months since I made this post
What kind of return did my dad get with the $50,000 he invested in the top lease-holding oil companies of North Dakota?
20% ...in about 8 months
lol at your folly prediction of "<$10/barrel" oil. Oil hit a low of $45 and rebounded slightly to its current price of just over $60
I jjust tossed $10,000 into FBIOX- fidelity's select biotech mutual fund. 33% 5 year average annual returns and up 20% this year so far in only 6 months
you keep schooling me on investing and I'll keep making money, mmmkay?
It's been several months since I made this post
What kind of return did my dad get with the $50,000 he invested in the top lease-holding oil companies of North Dakota?
20% ...in about 8 months
lol at your folly prediction of "<$10/barrel" oil. Oil hit a low of $45 and rebounded slightly to its current price of just over $60
I jjust tossed $10,000 into FBIOX- fidelity's select biotech mutual fund. 33% 5 year average annual returns and up 20% this year so far in only 6 months
you keep schooling me on investing and I'll keep making money, mmmkay?
Did he take profits? There is an old saying on Wall Street "It is easy to make money on Wall Street, the hard part is keeping it."
I also noted that there would be a rebound in the oil price, and there has been one. It may go further yet.
FBIOX - Wow, you are buying the top. Quote as of June 2nd is $262.02....was that your execution price?
I also noted that there would be a rebound in the oil price, and there has been one. It may go further yet.
FBIOX - Wow, you are buying the top. Quote as of June 2nd is $262.02....was that your execution price?
Just for the fun of it, I tried to find a decent treasury fund offering from Fidelity. They don't have one. They do have a short term treasury scheme called FDLXX and it is for capital preservation only, apparently. Get back to me in 6 months and we'll do a performance comparison of FDLXX vs. FBIOX.
I didn't purchase FBIOX for fund appreciation and capital gains. I parked that dough there because they pay good dividends. The relationship between stock price and dividend yield is almost always inverse
In the case of my father's investment, I made it clear to him that ought to be a short term investment for capital gains. The likelihood that oil would've gone below $40 I knew was very, very small so I figured we'd hit bottom.
Stock price means very little to me in the context of this FBIOX investment, because the objective is long term. I don't need to touch that fund anytime in the next 5 or more years
In the case of my father's investment, I made it clear to him that ought to be a short term investment for capital gains. The likelihood that oil would've gone below $40 I knew was very, very small so I figured we'd hit bottom.
Stock price means very little to me in the context of this FBIOX investment, because the objective is long term. I don't need to touch that fund anytime in the next 5 or more years
Don't get me wrong, I am not opposed to biotechs per se. But the coming bear market is going to be tough. Biotechs which may be excellent investments are going to follow the broad list down. When we do hit bottom, they are definitely going to be one of the top equity investments available.
ttystikk
Well-Known Member
What would you buy now?
sunny747
Well-Known Member
I agree that there is likely a play in oil, but I haven't placed any trades.. I have seen in the markets before where there is a major price correction and everyone jumps in. The problem is that the trade gets very very crowded and the instrument doesn't perform the way we had wished. For example, I had brokers calling me to short treasuries 6 years ago because interest rates couldn't stay at 1% for long. They're likely still saying that.
Also, consider the dollar. Oil is priced in dollars. Strong dollar = cheap oil. I'd say this has been a major factor in the current price drop along with other fundamental factors.. Yes, then there is always the theory that nations have conspired to eliminate Russia or to blow out US fracking operations.. Could be. Who knows..
In the trading pits we had a saying "If you can get it you don't want it." The big money always knows better than you so tread lightly would be my advice. Don't be surprised if we see $40 before we see $100.
Also, consider the dollar. Oil is priced in dollars. Strong dollar = cheap oil. I'd say this has been a major factor in the current price drop along with other fundamental factors.. Yes, then there is always the theory that nations have conspired to eliminate Russia or to blow out US fracking operations.. Could be. Who knows..
In the trading pits we had a saying "If you can get it you don't want it." The big money always knows better than you so tread lightly would be my advice. Don't be surprised if we see $40 before we see $100.
As for equities, now is the time for selling not buying. Consensus says that there will be one last market high, but by the very fact that it is consensus opinion, I am wary of it. Yesterday had the look of a bear market rally, which would mean that the secular bear has already resumed.
I trade, so no long term commitments. Otherwise, I'd buy 10yr treasury notes. For capital appreciation possibilities on these, see Japan 10yr government bonds.
WHODAT@THADOR
Well-Known Member
Whys it got to be a bear market? Maybe it just goes into a multi year consolidation? High beta names will get hit the hardest period across the board no matter the sector. So you sold every new high in a the raging bull market? What if it channel jumps the trend and goes parabolic since the market has shown more strength why should the "consensus" of the market matter? Its as fickle as the fundamentals people pretend matter.
Have a look at Biogen. The current 6 year cyclical bull has been driven by fed intervention, which created a temporary confidence. Since the fed is not in control of private property (AKA communism), there is zero possibility that they have "control" over what is still substantially a free market.
The ONLY thing that matters is knowing what type of market we are in. Cyclical bulls end abruptly. There is not yet confirmation that the bull has ended. But the warning signs are popping up like ditch weed in Indiana.
WHODAT@THADOR
Well-Known Member
Im in the camp that we are in the 3rd wave of a monthly elliot cycle that eventually will see a correction. That will have generated technical signals market corrects and drives to even more highs.
The problem with EW (one of them), is which index? They are too overly managed and thereby misleading. I generally follow the Russell 2000 as its composition somewhat overcomes that problem. At the moment, it sure looks like it is going to continue down...whether a C or a 3.