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We definitely disagree on this one Len. Everything looks cheap when you look backwards in time, but the oil companies have always placed just the right price tag on their oil... high enough to rake in montrous profits in some years, and low enough to keep everyone thinking that it's "cheap" enough to continue to buy gas guzzlers, and low enough to stay addicted to the stuff for decade after decade... all while they would occassionally raise the price of oil a little too much in order to rake in some extra billions in profits, and then suddently reduce the price back when there would be too much of a public outcry.
I remember plenty of those price hikes, totally aside from the oil embargo (which was more of a political event) that even ended up being investigated because the government had to respond to the public's anger and the media attention, yet ultimately nothing was ever really done, and sure enough the prices came down just in time for people to "forget", which is exactly what people do... over and over and over. They forget about the price spikes and go back to business as usual. They forget about the "windfall" profits that the oil companies were frequently guilty of, all long before the futures market had anything to do with it. Even now... after what just happened, folks are starting to buy the SUVs, trucks and gas-guzzlers again... and the whole idea of energy independence is once again a figment of our imagination, or placed on the back burner.
Truly, we are so addicted to the stuff, that I am convinced it is a matter of National Security that we are so overly dependent on "those people" in the Middle East.
It is a little different this time around, however... there is a more significant number of people in our population now that won't forget the oil company games any more, and they truly understand the importance of becoming energy independent. As a result, the sales of electric, hybrid, and more fuel-efficient vehicles will continue to rise. In addition, the government has now mandated higher numbers for the automakers CAFE, and this means that the manufacturers must turn to the alternative powertrains and fuel-efficient vehicles in order to meet the requirements. It's a step in the right direction, AFAIC.
In a different way we are saying the same thing anyway. The oil markets is not a market at all - it's a place to control prices.
To a large extent, we certainly do agree on this point. It's clearly manipulation... in order to keep us addicted for as long as possible, at the highest possible price that the "market" can bear. When it is smarter or necessary to lower the price, they do... otherwise it's as high as possible without rocking the boat too much... for the most part, whatever they can get away with.
It's exactly why I disagreed with your prediction last year when you said oil prices would swing dramatically lower. Instead I predicted they would maintain unrealistic high price levels, and they did just that. Now, I'm not saying it won't or can't happen, but I certainly think it will take something much more extraordinary, such as a major national or international financial meltdown, which is still a very real possibility. Otherwise, I expect the price of oil to remain high, for the most part, with occassional easing.
TM
I believe the spike in 2008 to $150 was not the oil companies doing. It was speculators like Soros seeing an opportunity to make billions both going up and back down.
Agree about Soros. We've had some brief discussions in the forum about him in the past. Soros could easily be considered as a very dangerous, powerful, and greedy global financial terrorist.
Hell of a guy.
TM
No surprise.
TM
I am more cautious than ever to bring a new speculative stock to the forum, but I absolutely must let you know about this.
I will be brief.
Please Google the recent relationship of INQ and Facebook. You will be blown away.
The way to invest is to recognize that INQ is wholly owned by Hutchison Whampoa Ltd (symbol HUWHY)
Just to be clear, I recently purchased $10K of HUWHY, and the stock is on fire! Again, a very speculative move, but I personally love the upside potential here. This is a very significant global business development that you must read about.
I am very anxious to hear feedback from those of you that actually take the time to look into this.
Regarding other matters... I have sold Citi on it's spike today. I made some gains, thankfully, and have let it go because it is taking too long to move significantly to the upside. (Having said that, it will probably soar over the next few days... hahaha.)
Also, I am not likely to increase my investments during the month of October unless there is some really good economic news, in which case I will jump in with more equities purchases. I do expect, however, to invest a considerable amount before the end of the year... just don't know exactly when yet... I am watching the news carefully.
In the meantime, PLEASE check out the INQ / Facebook business relationship... you may be pleasantly surprised, and who knows... you might actually want to purchase a small amount of HUWHY stock.
Again, I am anxious to hear from those of you that check into this.
TM
Totally agree on that.
Re oil - keep in mind that a lot of the price rise was also caused by dollar weakening. In some currencies oil is almost unchanged in price over very long stretches of years. This is the price you pay when your currency is the benchmark but of course that issue has many great advantages and I would not want it any other way.
It's funny, right when it looks like the Europeans were shooting themselves in the foot, their idiot American counterparts return the favor. Almost too much to be coincidence.
Tag, I see that the stock is a lot closer to its 52 week low than to its high. If you are right on your thinking about this stock, it has a lot of upside potential. I may buy some tomorrow. Thanks for the tip. Let's hope this tip is as good as the one from GS (QLIK). If not, I will hold you accountable.
Regarding other matters... I have sold Citi on it's spike today. I made some gains, thankfully, and have let it go because it is taking too long to move significantly to the upside.
"Patience [non-permissible content removed], patience" cried the master to the master to the donkey.
LOL... A tip like QLIK is rare, and so much appreciated.
Looking back, I personally think one of the best tips I offered here was my very strong recommendation to buy FORD, way back when it was beaten up so bad. Citi was so much better earlier on, but as you say, it now shows no sign of life. Long term, Citi will be OK, but I have admittedly lost my patience, like your funny slogan suggests.
There were some other good ones I mentioned, including American Tower, IIRC. And, I will never forget my amazing AIG grand slam, and just in the nick of time. Without a doubt, I definitely made some good calls and recommendations as well as warnings to all of you on market timing in general. My bet on Corning may have been too early, for which I apologize, and I dumped it right after I bought it, but it's hard to say if it will finally come to life, even though there are good reasons. Also, I mentioned a number of mobile internet stocks, which performed very well, and many still have further potential, IMO.
But unlike my passionate FORD recommendation, I am being much more cautious about recommending HUWHY, because it is speculative. I truly believed FORD was a slam dunk, and it turned out to be true. But, let's be clear that HUWHY is not a slam dunk. The INQ/Facebook relationship will have to be very successful in order for HUWHY to continue to gain. It was up another 3.23% today, so I'm feeling good about it, but who knows. There is risk here. But, I like the situation, and it feels right somehow.
BTW, I am so sorry that I forgot to tell you that I also recently bought $10K worth of shares of Netflix (symbol, NFLX), and so far I am glad I did. It was up 5.42% today. There's been a lot of buzz about this stock, and I think nearly everyone has been talking it up at some point or another. I like it a lot, and do recommend it, especially buying it on dips.
TM
I am not very familiar with video companies. We don't watch many movies at all. We use to pick up a movie from Blockbuster once in a great while (3-4 times a year), but lately, on the rare occasion that we do watch a movie we just order it through Directv since the cost is the same and it is SO much easier.
So, hat has made NetFlix so successful? Is it the fact that you can order Online? Doesn't Blockbuster offer movies Online? I didn't even know that Blockbuster was going bankrupt. Like I said, I know very little about this industry.
Yeah, Netlfix destroyed Blockbuster. I was a Blockbuster member until '99 when I started using Netflix for DVDs. I haven't been to a video rental store since.
Unfortunately, in '00 or so, I told myself if Netflix were to go public I wanted in ASAP. Well, I wasn't paying attention and completely missed out. Talk about missing out on a huge opportunity.
For me it was convenience. Being able to setup a movie queue online, have the movies mailed, then mail them back w/o worry of late fees was a huge convenience, plus Netflix service is inexpensive if you routinely use it.
Blockbuster did try to compete with Netflix online for a while, but they whad a brick and mortar business model. That's expensive. Netflix doesn't have thousand's of store fronts to support. Add the fact that Netflix is doing great with streaming content and Blockbuster was just a out of it's element and didn't have the ability to adapt.
Netflix has improved their delivery system immensely. When I first started using Netflix, it took almost a week to get a movie through the mail as they were all shipped via California. Today, nearly everyone can get a movie in a day or two. I imagine the days of physically buying/renting DVD content are over. Streaming/downloading is the obvious next step. But streaming/downloading HD content require significant bandwidth, and server support. That is where network infrastructure and Cloud computing comes in.
http://www.netflix.com/HowItWorks
Tag, I see that the stock is a lot closer to its 52 week low than to its high.
Ah..unless it's a typo, MSNBC shows the stock close to its 52 week high, not low.
And there is the beauty of the subscription service. I read an article a year or so ago about Netlix that many pay the subscription, yet don't get many movies. Sure, you can keep the movie for a month, but doing so just cost you the monthly fee. Since we have kids that are 8 & 12 we get at least 4 movies a month. Not bad 10.99/mo, I pay a little extra for BluRay rentals. That keeps me from having to drive somewhere and quite frankly it's priceless considering I don't have to endure a rental store with two girls fighting over which movie to get;)
But regardless of his posting error, there is absolutely no doubt that HUWHY is closer to it's 52-week high, and it has actually gone ABOVE its 52-week high in early trading today! So far it's continuing to climb very fast.
Sweet.
TM
Crap! I looked up HUWHY on my cellphone stock page and it comes up with "HUWHY.PK Hutchison". Is that the correct one? If so, it shows a 52 week high of 64.25 and a 52 week low of 38. There is very little volume. The current price is $46.35, up $1.63 for the day.
:surprise: :confuse: :surprise:
TM
:surprise: :confuse: :surprise:
TM
edit:
Charlie, did you ever figure out what the problem was with your cellphone stock page?
No I haven't. I told you above what it shows for a 52 week high and low. So, where did it settle today?
That's what I show. Up 4.14% today.
Meanwhile QLIK has been getting hammered recently, down 5.28% today. Also Netflix took a shot today, so I bought more... yikes.
Also bought more AAPL today, and a long list of other stocks.
My gut feeling on the market is to expect a roller coaster... just a feeling.
TM
So TM, I take it that you are now once again loading up on stocks on your own and not just having your broker trade the account at his discretion. Right? BTW, I also bought 20 more shares of AAPL in the low $280's. I am convinced this stock will reach $325-350 by early next year if not sooner.
Agree on AAPL.
TM
I am still sticking with HUWHY (for now), and the biggger surprise is that we agreed to bail out on QLIK for a little while, be happy that it provided gains once again, and then keep a close eye on it as we move forward.
That's the latest situation... always subject to change... and probably will... lol.
TM
I don't blame you. NFLX has had a huge run this year, I would expect a pull back at some point.
This paragraph in the story shows how dangerous the high frequency trading has gotten.
Startlingly, as the computers of the high-frequency traders traded contracts back and forth, a “hot potato” effect was created, the report said, as contracts changed hands 27,000 times in 14 seconds, but with eventually only 200 actually being bought or sold.
http://www.nytimes.com/2010/10/02/business/02flash.html?ref=business
http://www.nytimes.com/2010/10/01/business/01tarp.html?_r=1&emc=eta1
2013 LX 570 2016 LS 460
Just as a side note. If I was given a $1 billion to invest in the stock market when TARP was being handed out I would now be worth $7 billion. I put all my IRA cash into "F" stock when it was at $1.76. Today it is worth $12.26. So TARP was not what you would call a stellar investment by the Feds. Though there have been investments I would have been happy to break even on. :shades:
... almost as fast as TagMan.
Seriously, great article Len... thanks for posting it. Shocking, to say the least. Somewhat disturbing, too.
TM
+1
TM
I love the way the market in general has been acting. I bet that some folks yesterday were thinking that "here it goes. This is the start of the October meltdown". My rule of thumb says that when the talking heads (media and some others) think that we will have a big correction, the opposite is usually true. Thus, I was not at all concerned about yesterday's little sell-off.
I think it's funny that after soooo much waiting on Citi to advance, you and I posted about it being lifeless, and I finally sold it, and then BAM, it started moving up quickly. Go figure.
I did sell QLIK, but I am not likely to buy more of it, no matter what it does. There are other stocks that we are focusing on, and I like the mix very much, and I think my portfolio is going to do just fine without QLIK.
That said, I sure do hope QLIK does great for you if you buy more of it.
And lastly, I am glad that we are all in this market in spite of what the media says. As you know, I follow my own compass anyway, and it usually guides me well, although not perfectly... that's for darn sure.
TM
I understand what you are asking, but in my opinion, Crude Oil, Gold, and the Dollar Index are all very much manipulated in any way the big boys want. I am not concerned about the $dollar heading south. I bet, THEY (big boys) will prop it back up when they feel it is time to prop it up. And, if by some chance the $dollar goes to near zero, then everybody will be in the same boat. Who cares at that point? Therefore, in my opinion, it makes no sense to worry about the $dollar.
I was going to sell my C shares but my broker talked me out of it. I don't have much invested in it (1000 shares), so I will wait it out.
As far as QLIK is concerned, I may buy 200-300 additional shares. You know me. I don't bet the farm.
Well, as I replied to TM, I am thinking of buying 200-300 additional shares. I will probably pull the trigger tomorrow. Is everything still in great shape with the company?
So long as my own nest egg isn't deflating, I should be happy.
I did dump some silver last winter, thinking it had peaked. D'oh.
I would probably invest a lot in the stock market. I don't have the record TM has. My two best picks were Ford and McDonalds. A few others did ok, and several went broke. I am ahead and can be thankful for that.