Oil is still one of the best bets for long-term gains says Greg Guenthner. In the midst of blind market panic, investors are forgetting that crude is a finite resource facing unquenchable demand. It will rise to record highs again. And when it does, oil stocks will soar.
Crude oil prices slipped below $60 a barrel yesterday, taking the black goo to a 20-month low. But that doesn’t change the fundamentals. Oil production is levelling out, and will soon begin to fall. Andrew Gordon expects crude to soar back toward $200 after a short pause. And Big Oil companies that are still investing in new projects will shine.
“It was the best of times, it was the worst of times.” Justice Litle thinks Dickens’ classic line provides an apt description of today’s markets. Sure, this year has been hell. But it has also created some amazing opportunities for contrarian investors. Justice says this is most apparent in the oil and natural gas market, where irrational risk aversion has made most people forget the fundamentals.
The stock market is due a bounce after the election, regardless of who wins. But after that, the voter’s choice will have a big impact on industry winners and losers. Rick Pendergraft says biotech and alternative energy stocks should get a lift under Obama, while defense and oil will benefit from a McCain victory.
One of the biggest collapses this year hasn’t been in stocks. Crude oil has lost half its value since it peaked at just under $150 a barrel in July. Today, a barrel of the black goo sells for just over $80.
Outstanding Investments co-editor Byron King says “it seems like the investment locomotive — energy, resources and related infrastructure — has derailed.”
Does this mean you should sell your resource stocks? Byron says selling now would leave a lot of value on the table. That’s because resource stocks are now priced well below their intrinsic value.
It remains to be seen whether fear takes control of the markets again today. So far, global equities have seen a reprieve from the brutal pounding they suffered last week.
The crash in stock prices has most investors spooked. But it’s worth keeping you head while others lose theirs, says Strategic Investment editor Dan Amoss.
Right now, there are some very healthy resource stocks are shockingly cheap. What Dan calls “screaming bargains.”
Last week I tried to open a savings account for my son. The credit union offered me a 1% interest rate… If I had given my money to the credit union, I would have guaranteed my son a 5% annual loss.
In the energy market Thursday, crude for July delivery retreated, closing at $126.62/barrel, down $4.41. June reformulated gasoline lost 5 cents, to $3.40/gallon.
Buyers of oil stocks today will suffer an enormous case of “buyer’s remorse” by this time next month.
The key to making money in oil stocks this year…Is to sell ‘em. That’s right. The editor of an oil-stock advisory is telling you to sell oil stocks. But before you decide I’m committing professional suicide, realize that selling is how you realize profits in any stock, aside from blue chips you plan on keeping forever.