Folks investing in the markets always hate October. I LOVE Octobers. I LOVE Septembers even more (historically, Septembers have been worse than Octobers).
Now, repeat after me: "Buy LOW, sell HIGH". What part of "LOW" do most investors not get?
My crystal ball is in the shop. That does not stop me from trying to see just a little of what MIGHT happen and how I MIGHT benefit. I want to own stocks of companies in the energy complex at some point. My bet is that after a couple of s**ty earnings seasons the market might have gotten softened up enough to make it safe for me to get back in the ring. That, and a tough analyst confession season (September/October) that the year is not going to come out quite like they said it would.
I firmly believe that the American Energy Crisis is still very much in the offing - this is only a time out on the field. The stock market will bid these companies up in anticipation of the supply crunch that I envision. My bet is that in mid to late Q3 and the beginning of Q4 is going to be a good time to be buying these companies. As always, I reserve the trader's right to change my mind on a dime. I don't stand on ceremony.
This is not to say that the market could not get "there" sooner. (I can't define "there", but I know it when I see it.) Some good signs that "there" is here would be nationalization of the banks, local fuel shortages at the end of pipelines, Dow 5,000, etc... or any other Armageddonish event that makes people sell stuff indiscriminately. We were close to that indiscriminate selling 3 weeks ago. Close, but no cigar.
In addition to energy equities, I am looking to buy Gold on ANY dips, and I have taken positions in Silver recently. (I speak freely about commodities, as I am not a commodities broker, and so am not regulated, and it is impossible to "talk one's book" in the commodity markets to any effect.) I am doing this even though I think the US$ is the best looking of the ugly currencies because at any time between right now and 5 or 10 years a currency crisis of BIBLICAL proportion is extremely likely.
Patience. (I will be buying energy stocks if they break below their lows of 3 weeks ago.) The Fat Lady ain't even got out of her chair yet (IMHO).
Mentatt (at) yahoo (d0t) com
6 comments:
The skill seems to be in judging what constitutes a good low to buy at, and what is a good high to sell at when the highs and lows fluctuate as much as the price does. I guess that's where experience, knowledge, data and a bit of luck come into it. And also how long you are willing to ride out a trade. Where I seem to struggle in my short trading life is with timing.
All of that, and more importantly, the ability to admit that you were wrong. THAT is the most important skill, followed closely by being able to admit that you were RIGHT, that you won't be right forever, and maybe it is time to take it off the table.
Well, sometimes I think I am right, but then the price fluctuations freak me out and I admit I must have been wrong and close out, only to then later have it turn out I was actually right the first time.. Ah the joys of trading...
Live and learn.
(Mish was the only one saying a year ago that the U.S. dollar was going to strengthen while everyone else was badmouthing it over the massive amount of U.S. debt that will have to be inflated away. Mish makes some good educated guesses. :) )
I'd like to remind everyone that last summer (which will soon be one year ago today), a lot of the things Jeffers mentioned actually happened (bidding up of energy companies, running out of gasoline in some places, etc.) The problem this time around is determining if the same phony factors that drove oil up to $147 a barrel last time (Speculation and the weak U.S. dollar, not supply and demand issues) is erupting again. If such events do occur (rise in energy prices), I'm going to bet not, since debt-fueled speculation wouldn't be in the offing during a credit contraction, and the U.S. dollar hasn't weakened (yet) to "one euro = 1.6 dollars" like last last summer. If these summer events do happen, is it truly "different this time?"
Bureaucrat:
I think Oil is heading down in the near term. That is precisely why the supply constraint WILL show up. With lower prices comes disinvestment in productive capacity - less productive capacity, less production (remember depletion) and then...
I did not make the rules... this is just how commodity cycles work.
Yep, has to go down in the near term .. natural gas too .. because of massive oversupply of oil and nat. gas presently. Demand dropped very little in the U.S., and a little more than that worldwide, over the last year. But we're still burning/fabricating close to maximum oil production (86 mbpd) worldwide. Eventually the oil/gas overage will disappear. With constraints to supply from depletion and lack of production money, it is just a matter of time. This deflationary mini-depression may have bought us a couple more years (at a huge financial cost to Americans and the world overall), but nothing has really changed. I can wait. Everytime I walk over the Kennedy expressway watching all those cars and trucks, I think the same thing ... burn, baby, burn.
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