Early this morning Maria asked Bill Browder from Hermitage what the catalyst for higher oil will be (part of Mr. Browder's thesis for Russia).
Regardless of you think about oil going higher or lower the fact is that markets in all sorts of things turn in the other direction, go on to make very large moves in that opposite direction over and over for no reason at all.
If you think about it, its true. Yes, sometimes there are reasons but the exact turning point is usually more about emotion/sentiment than anything else.
I think oil will head higher, I don't know if it will, but it is a fair bet that $80 was an over reaction as will the bottom of this move, if it is still in front of us, be an over reaction.
That markets can turn fast an hard with no warning is yet another reason why I am not a fan of big bets. Being wrong is too easy.
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5 comments:
Ditto. The financial media want folks to believe market prices are wholly driven by news and rationality.
Ditto to the ditto.
Unintended consequences of acts. Ethanol begets higher grain prices begets higher cereal prices begets higher meat and poultry prices begets higher costs of producing ethanol begets another hit on the poor and lower middle class to afford basic foodstuffs and fuels.
Diversification mitigates the risk of unintended consequences to a portfolio . Mid and small cap oil drillers and services might be a good sector to watch now. PXJ is an interesting ETF for that bet.
Almost by definition, the bottom of any move is an over-reaction to the downside...
After the state of the union speech where the President made some calls for energy independence and reducing our gasoline usage by 20%, all of the proposals were ridiculed.
So, I guess that means we won't be curbing our use.
Oil is going up.
MD while I generally agree, another print below $50 wouldn't be a huge shock.
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