Are there going to be any asset classes moving up this year?
Doc is with us again this time covering the overall investment landscape. Throughout 2016 it will be hard to find any particular asset classes that will garner a significant bid.
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* short-duration I meant.
Apologies for the potential confusion caused.
LPG
I would not touch a junk bond if you had a gun to my head. Once the markets reset now that is another story. Then I may consider.
“junk”….says it all
yeup.
How has the oil stock buying been going LPG?
Did you begin to buy in at $30?
Hello Bob UK,
Hope all’s well.
It was the Oil ETF (USO).
Started a few days ago if you remember – small size.
I added this week in larger size to average cost down incl. ysterday and pre-mket today.
Sold today on this rip toward 8.70 as I expected this to be a topping area for today potentially (I had top zone at 8.64-8.66).
Just re-entered (<8.50), small size again. Giving room to add in the 8.25 zone.
I'll pay strict attention to how it behaves next week on Wednesday as it's "Fed's day".
Best to you,
LPG
Thanks LPG.
Well done on making some profit – and being wise to take it.
I didn’t realise that it was USO that you were thinking of investing in re oil. I thought you were thinking more of selecting certain individual company oil stocks.
As a side note Bob UK,
I decided to not play the oil stocks. I mentioned that in an interview at the end of December I think.
Same as the stocks within other sectors which are being smashed (but not the PM sector).
Reason for that, as I mentioned to Doc/Richard privately, is that this market is, IMHO, a “fixed income boys” market… not an “equity boys market”.
Lemme explain: plenty of companies in the oil patch – as in other sector – have plenty of debt. (stating the obvious here…but bear w. me)
So first of all, you have to be on top of the debt schedule… and figure out if it can be met. That’s obvious too, but please, still bear w. me.
But the larger issue is that most debts have covenants for which you and I have NOOOOO idea about. These covenants can pretty much be triggered at anytime when you don’t expect them. Which means that the debt could see accelerated payment sometimes etc.. etc… Some lenders can decide to forget that covenants are triggered… some lenders can decide to enforce them. Good luck figuring that out in each case.
===> Bottom line: it’s a maze and a mess for us equity boys. And if default/chapt 11 occurs… the fixed income boys will eat before us equity boys. ===> no thank you.
That’s why I just focus on the Oil ETF – USO – coz I just have to think about oil. I don’t have to think about balance sheet, cash generation, debt schedule etc…
That’s also why I prefer to deal w. certain PM stocks: coz for many of those I look at, there’s no debt. So you know, simply, that if cash is running low… then equity financing is just around the corner and you just stay away from the name. More simple to handle – for me at least.
My 2cts.
Best,
LPG
Thank you for sharing your valuable insight. Much appreciated.
Great thoughts on the debt burdens facing the Oil companies and how the equities investors may have their lunch eaten by the fixed income financial boys. I concur and used the UWTI Oil ETF for this rally, so I wouldn’t have risk things on a company that may or may not move on the oil bounce.
It will be interesting to see which Oil companies responded to todays rally in crude, and which ones shrugged it off or went down on the news. I still think we’ll have some great opportunities to take positions in select Oil companies this year.
Another fake rally I think. OK for a day trade but I would not want to hold over night.
Agreed. I averaged down yesterday in UWTI (I had started a position on Tues afternoon) and then sold the whole enchilada today. There still may be a little more upside left, but with the size of the move today, I took the chips off the table.
I appreciate what Doc has just said, and it was interesting as always, but it is a tad disappointing to be still in January and think that perhaps the best thing to do this year, with interest rates so low, is to sit in cash.
Perhaps we should have a KER whip-around and see if we can buy one or two rockets and an air ticket to the Strait of Hormuz? Any volunteers?
Good one. Give me at least one day’s warning before you do that so I can get positioned.
Actually, I was hoping that you could fire the rocket and I would stay at home and watch it on the news.
That’s a lot of bang for the buck in Oil afterwards.
S&P will tag 1500 by April 1st.
Oil is going to $16 a barrel.
Although “hope is not the strategy”, I hope you’re right Tom.
Best,
LPG
Probably best to say March 31st than April Fool’s Day. Some might think that you are kidding otherwise.
yeah, no kidding.
I say we hit 1550 by March.
Well good ole’ Cramer is making analogies back to the 1986 Oil fall from $26.50 to $10.
Anything’s possible….
________________________________________________________________________
Cramer – Oil could go to $10
Thu, Jan 21, 2016
http://finance.yahoo.com/news/cramer-oil-could-10-233409708.html
Tom,
Two years ago 16 would seem so nuts. But I believe it’s going to happen.
Sorta looks that way Tom, Alberta oil sands could get to less than 10.
I read that in N Dakota people are being paid to take it, its cheaper than the cost of storage, barrels are more valuable than the oil right now.
I guess fossil fuel could get cheap enough to prevent a move to “clean” energy.
Ravi addressed this exact topic on Palisade radio recently. He mentioned that there is carbon taxes and legislation coming down the pipe that will shore up some of the disparity of the energy input costs. He also covered the other side though in how Coal or Nat gas or Nuclear can run 24/7, but that Geo thermal is only 4-50% of the time, Solar about 25%, and Wind about 20% on average. Those companies are charged a fee as a result to handle the uncertainties. Energy is a complicated sector.
Here’s that interview:
Ravi Sood: Renewable Energy Yield Companies Provide Unbeatable Returns, Despite the Oil Crash!
By Collin Kettell On January 13, 2016
Precious Metals Video Market Update: Gold’s Relative Strength. 1/20/2016
Jordan Roy-Byrne January 21, 2016
http://palisaderadio.com/precious-metals-video-market-update-golds-relative-strength-1202016/
I like how Jordan seems to be surprising himself by what he is actually saying (up trend in gold relative to others)
Ha! That is really funny. I’ve been listening to him for years and he’s always done that.
I used to blow him off at first because he didn’t sound polished or have that swagger that some of the “experts” have, but over time, I realized that he was much more accurate than many of the fancy pants. He makes mistakes, but quickly will adjust to new data, and at least he is real and gives you his rationale.
His bewilderment and surprise with some of his own slides and charts does make me wonder if he is doing the analysis & discovery for those segments in real time.
“Energy is a complicated sector”………ditto……….
Beware……..on the high yield renewables…..especially when they need the TAX CREDIT
Agreed. I am only looking for select companies in the space that can generate real revenues, have low input costs relative to their peers, good pipelines of projects, and good management.
Many of the renewables will implode for sure, and are counting on the tax credits to survive. That is not a good business plan, because that can change in a heartbeat.
bb…..ditto on the N. Dakota……Koch Brothers charging .50 per barrel (zerohedge), read and posted that one the other day.
Sorry guys, March 31st I’ll go with so you all know I’m not kidding.
With nobody stopping production and Iran joining in now I just don’t see any end in site. Lots of bottom catchers here who might get lucky with a small bounce but it won’t be the end of the selling.
Tom, I have been on I-hub calling for $30 SPXS by March which should correlate to about $1550 in the S&P.
general time frame I believe is correct.
Market lost all the big gains but came back up or we would have been looking at another big drop.
I keep an eye on Tullow Oil listed in London. It rose almost 10% today by the time London markets closed – which was basically before oil took off in the US.
I think it will go back down and reach new lows though as oil gooes back down.
Interesting observation Bob UK. I’ll add Tullow Oil to my watchlist. Much appreciated.
George Soros has just let it known that he has shorted the S&P 500 and gone long treasurys – that sort of info is bound to have an affect on the markets surely?
I guess he read the notes at DAVOS……
Nice article at zerohedge……remarks by William White….ex BIS president.
that should be top economist not ex pres.
Are you still thinking of running for president you wacky Russian?
We’re waiving birth certificates and encouraging relations between our two countries so the oval office is yours. I may claw you in on the ballot…..
Must have been on my subconscious mind. Or the one that is OOTB.
Bob UK,
As per his filings, Soros had been long S&P puts for ages….
Nothing new here, IMHO.
Best,
LPG
Ah, OK. Thanks LPG.
Ronan Manly: As Deutsche Bank exits London gold, Chinese bank enters
2:18p ET Thursday, January 21, 2016
Dear Friend of GATA and Gold:
Gold researcher Ronan Manly today examines Deutsche Bank’s withdrawal from the London gold market, the potential sale of its spanking-new London gold vault to a Chinese government-controlled bank, and the possibility that the Chinese bank will be admitted to the secretive cabal that works with the Bank of England to manipulate the London market. Manly’s report is posted at Bullion Star here:
https://www.bullionstar.com/blogs/ronan-manly/g4s-london- gold-vault-2-0-…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Very interesting……………thanks Markedtofuture……………………….ootb
I suspect short-term corporate bonds is better than cash…
My 2cts.
LPG