Saturday, July 19, 2008

What a Week!

That was a roller coaster! Glad I increased cash position lately by trimming Apple. And happy that I made money on quick trade with Goldman Sachs. Looks like now is the time for trading volatility.

Jim Cramer was wrong. Oil can't go up in price indefinitely. After all, even if suppliers can't increase production fast enough, demand destruction works immediately. And parabolic chart is a sign that things are going to end badly. With a sharp drop, most probably. I don't know what happens next (or I wouldn't have to work for a living!), but in couple of years oil is probably going back to 50-70 range. Later on, it will go lower for a while. Maybe 40 dollars a barrel is a current minimum, but I'm not that sure. I still remember oil under $10 in 1998. Which means that all altenergy investments which are not supported by government, are toast. The only hope for oil bulls is the fact that oil industry is getting destroyed in Mexico, Iran, and probably Russia. Which will remove significant part of supplies. But new supplies are coming online in Iraq, Brazil, US, Canada, North Sea and other places.

Current sector rotation is still not clear. Where money is going? It's not tech, judging by reaction to misses by Google and Microsoft, which were not that bad. Financials? That would be interesting. I could say that financials don't deserve investment right now, but it's beside the point. Merrill Lynch reported awful quarter and it's still up. Funny enough, rotation to financials is exactly what US economy needs right now.

Let's see and make money!

Full disclosure: at the time of publication author had long positions in Google and Apple and no positions in other stocks mentioned. Positions can change any time.

Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.

1 comment:

Administrator said...

Thanks for your comments (blog). :)
I'm totally in cash. Parked in AUSD at 5.5%. Sold my China and India funds in June last year (too soon). Will never go back in funds because of their lack of transparency. Saw your post on
Thought you made sense. Cheers :)