Every day I drive by the gas station and see rising prices I feel like a moron when I don't go home and invest in Exxon stocks immediately. The money seems too easy. What am I missing?
It's funny that you guys mention Exxon and Baker Hughes. I just opened a TDAmeritrade account last Monday and these were the only two oil company stocks I purchased. After holding each stock for exactly one week, Baker Hughes has returned 13.94% and Exxon has returned 6.22%. My biggest gainer over the past week, however, has been Apple (14.66%).
^ if you guys want to cash in on an energy boom then do it by means of an ETF rather than putting most of your eggs in the basket of a Baker Hughes or Exxon or etc. Also - checking your stocks and charting your gains from week to week is a hideous idea when you are just starting out as a casual investor. It builds unrealistic expectations and leads to bad habits. Remember, you are an investor, not a trader.
which ETF are you looking at....some kind of oil sector etf? Putting your eggs in one basket is fine - if you keep a da** close eye on that basket and know what you're doing. I suspect most on here do not.
I don't see what's wrong with investing in two oil companies, when the oil industry is just a small part of my overall portfolio.
I agree with your latter sentiment. Anyway one of the few decent investment decisions I have made was picking up a little bit of XLE when it was trading around $30.00 a couple of years ago. I've cashed in a bit of it recently to pick up what appeared to be bargains in the battered financial sector but I really wish I had bought a bunch more XLE back then.
Looks like you cleaned up, Sam. My story of investment regret is not picking up AMT in 2001 at $0.60 per share. It is now trading at over $41.00 a share. Ouch!
Because the market isn't that simple otherwise everyone would be a Jim Rogers/Ed Seykota. The key aspect is awareness of market psychology that most amateur investors lack. For example when crude trades down 5-10 points most amateurs will be eager to throw in the towel, but that is precisely when crude resumes its uptrend. Just look at how oil went from 100 to 110 and then retreated back to 99 in a matter of a few days a few weeks back. When it fell to 99, many people were saying oil had its top, but alas we are at such great heights with crude today. Gauging market sentiment and market psychology is in my estimation the most important aspect in regards to any trading/investing plan. It supercedes fundamentals in the short term even. If you want an oil ETF, check out OIH. There are options traded on this ETF as well.
Question for those who are more aware than I've been over the past few months: A lot of the "great minds" are cashing out their winnings in commodities and moving into other sectors, namely railroads. What are some good railroad stocks to watch?
Warren Buffett last year bought into Burlington Northern (BNI), Norfolk Southern (NSC) and Union Pacific (UNP). Where are you hearing that pros are cashing out of commodities? Recently Soros talked about how commodities still have room to grow. Jim Rogers says this bull run will last another 10 years. I personally don't know anyone cashing out of commodities, and I actually work at a commodities/derivatives trading desk. Most consensus of people I speak to within the actual commodity industry say we are in inning 4 or 5 of this boom. Its quite hilarious, that CNBC ignored the housing and tech bubble, but are yet so quick to call a commodity bubble. Bull markets in commodities last a long time since it takes a long time for new supplies to arrive. Short term the commodities may be overbought, but we still will see another decade of growth.
I'm starting to gain interest in investing in stocks, anyone have any suggestions on material to read before getting started?
Here's a hint: Don't buy high Yes oil prices are soaring, but in economics 101 we learned that when prices rise people use less. If we get a full blown recession and the hedged credit markets crumble like the mortgage markets are, demand for oil is going to drop off. You just don't want to be buying in at the top of the bubble. If you bought energy stocks 3 or 5 years ago it's probably time to start taking some profits. I bought a tiny percentage of a small private exploration company in 2005 and I'm trying to get our general partner to start selling off some production assets. But my .778% doesn't carry much weight.
While oil is booming and it is currently great to be investing in it, I do not necessarily believe this is the best time to buy for a long-term investment. Financials and small-caps have been hurt the most by the recent correction and you will find much better buys in those areas. Other areas will be weak in the future and you should then buy into those areas. Before you know it, you will have a good, diversified portfolio. If you really want to buy an oil stock, I would suggest PBR.
PBR is good - as is the idea of investing in any national oil company at the moment. STO is also good, for example. PBR just made the third largest field discovery (carioca).
I agree, if I were making a long term play on an oil company I think it would be Petrobras' American depository shares. Exploiting their new finds may be 10 or 15 years out, but given the chances of the Middle East becoming a war zone, what will their oil sell at in 15 years. http://www.huffingtonpost.com/2008/04/15/brazil-oil-field-could-be_n_96693.html Could be a nice IRA buy and hold for a younger person.
