Weak Oil = Strong Buys?
Answers
2082 points
alanj answered one year ago …
Yes. Oil will be headed back up. And it could be soon. Buy on pullbacks.
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Lobo answered one year ago …
The Oil Bubble seemed to have expanded to prices that cannot be sustained. The bubble may not have bursted, but it has sprung a leak. Supply and demand is certainly a big factor in the higher prices, yet if supply and demand were totally responsible for the recent high prices as opposed to market hysteria, speculation by fortune hunters (as is not uncommon in regard to equity stocks even), then the price has reached its high point because objective statistics show that demand has fallen. Based on hasty retooling or downsizing of autos and more personal discipline about the need to drive as well as widespread cost conscious conservation throughout our culture, I fail to see another fast rise in oil prices in the immediate future. As stocks go up and down, so will oil continue to have its buyers and sellers. Oil may gurgle up and spit awhile and it definitely isn't going away, but is it a good investment for the near term? No one is exactly giving oil away yet nor do we expect them to, but for me I see no reason to rush out to buy oil or oil company stock or ETFs of oil stocks. Sure, U.S. well servicing and drilling stocks might do well if the politicians stop posturing soon, but my price outlook for oil is that it could soften farther or slide around sideways awhile.
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3963 points
MNSL answered one year ago …
As Lobo said there is no reason to rush out and buy oil, oil stocks or ETFs. Similarly we should not rush and buy other commodity stocks, home building and property stocks, financial stocks etc now. There will be plenty of opportunities later on.
For some commodities has come down by more than 25% and bear markets has just begun for those commodities. Oil is also not exception. Sooner than later there will be bear market for oil as well.
Putting money in other sectors specially neglected sectors is safer and there will be great return in the next 02 years through out the world. You must buy those stocks before investment houses recognize them.
Some outstanding stocks initially knowledgeable investment broker will identify before others. Finally when things become better and better all investment brokers will advice investors to buy this stock. Then you will have greatest opportunity to dispose some of your stocks if you see stock has become overpriced. Otherwise you can keep the stocks for ever if you realize great potential in the long run.
If you look at some top investors, we can get some idea about how they shift their investments time to time. Even commodity countries and investors are diversifying their investments now. They are looking for new investment destinations, sectors and countries now.
Commodity stocks, commodity countries and commodities currencies will hit hard in the next 02 year. Currently top commodity countries have the highest interest rate and highest inflation in the world. It is really alarming now.
