Wednesday, May 28, 2008

"The Oil Bubble"

About a week ago I wrote a post to remind folks that NO market moves in a straight line - there are rallies and corrections along the way, enough to make you sick.

The absolute worst place to get your investment advice is CNBC.  Folks, they are in the ENTERTAINMENT business, not the investment business.  As "journalists" (give me a break - Woodward and Bernstein are journalists, Joe Kernan's a pompous jackass) they feel the need to present the many sides of a story.  I would like to point out that there is only 1 RIGHT side, the winning side, of any trade.  For every trade, you have a buyer and a seller.  The commodity market is a "zero sum game", for every winner there is an equal and opposite loser.

When you should be buying, you won't want to .  When you should be selling, you won't want to.  Trading is a contact sport.

On another note, the data keeps coming in regarding economic contraction caused by declining fuel availability.  Read this from Bloomberg re the number of commercial flights.  Remember, the jerks in the media keep telling you it is because of the PRICE.  They are truly intellectually challenged, or intellectually lazy; price is merely a symptom, a means of bringing demand down to meet the decrease in supply.  The U.S. economy is using ALL of the petroleum products it produces and imports, unfortunately that aggregate volume is falling and there is nothing ANYONE can do about it.

There is much that you can do to better your personal situation, better your investments, and improve the chances for success in your business.  I wrote this post 2 1/2 years ago about the never ending battle with distance we would all be facing in the future.  Everything will be measured in "how far" and "how much energy" from now on.  Be the first to take this into consideration among your competitors and you will enjoy a significant advantage.  Ignore it, and they will be passing you by as you head for disaster.

The price of Oil will fluctuate HARD.  There will be times when the "bubble headed bleach blondes" tell you that the bubble is over, go back to your SUV and your 6000 square foot house (for a family of four).  That will be the bottom in that energy correction.

Be young, have fun. Ride a bike.


Yours for a better world, 

Mentatt (at) yahoo (d0t) com

3 comments:

fallout11 said...

Another stellar post, sir.

Greg T. Jeffers said...

Thanks, dude.

billm said...

Questions:
Are crude oil, heating oil and gasoline necessities, or just ordinary speculative commodities? If they're the former, how can they be the latter?