We've written about energy before. Back when it started its recent run to $115 a barrel we said then that there would be a pullback and we've been getting one.
We also said then that hydrocarbons should be a permanent part of your portfolio.
This is an energy market running on what some might call a full tank of confidence. Others an empty tank of fear. At present global oil supplies are plentiful, demand owing to economic concerns about the EU, Japan and China, to name a few, looks anemic and market participants for the most part have blown off the risk of geopolitical supply disruptions for now.
In our last "AROUND THE WEB" we posted a link to a Citigroup report essentially predicting the demise of the hydrocarbon world, another feature we like to see.
These should strike you as all the ingredients one looks for to be taking the other side of that trade. We know that Buffett just sold off a chunk of his energy holding and we say so what. Maybe he's just taking a chunk of big profits? For years he's claimed he's not a macro guy. He also owns Burlington Northern railway, a backdoor play on energy anyway you look at it.
Some would suggest its a monopoly to the North Dakota fracking boon, but Buffett has friends in high places, no surprise either. He's also an opponent of the Canadian pipeline that would run through Cornhusker Land.
Deflation fears are so much in the air one could call it the economic land of the the blind, a place as the parable goes where the one-eyed rule. In another link in that same post we listed another, "WHY YOU SHOULD NEVER TRUST ECONOMISTS," that quotes a Nobel Prize winning economist saying: "Anyone who believes in inflation is stupid."
There are few things more dangerous to one's financial well being than Nobel Prize winning economists. If you haven't learned that by now, well, we again wish you well in your delusions.
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