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Please refer to the Disclaimer at the bottom of this page
Just to let you
know I am more bullish on commodities especially
silver and oil, than ever before. I feel history is
on my side. In the Great Depression prices of
commodities continued to go up. In the global
recession of the 70s, prices of commodities
continued to go up. So if we are heading towards
either scenario again it would be logical that the
price of commodities would go up. Do you realize that every year since 1988 Saudi
Arabia claims to have 260 billion barrels in oil
reserves? That is a pretty amazing number
considering they have pumped at least 75 billion
barrels since then. When people question them about
that number they say either you believe us or you
don't.
I want you to look at these two graphs. This is an
open book test. If supply and demand matter, which
in a commodities market they should be the
overriding factor, look at what is happening to the
world oil supply. That is correct, it is starting to
decline over the last 3 quarters. Now look at world
oil demand and the projections. That is correct, it
is higher than supply but more importantly by the 4th
quarter next year it should be substantially higher
than world supply.
So while people are looking at the demand side
falling because of this credit crisis, what they are
missing is that the supply side will likely fall
faster. If we hold at this $70 level or go lower it
is almost a surety that the gap between supply and
demand will get even greater. Right now companies
are slowing down capacity because of the price and
the cost to get oil out of tough places. I mean if
it cost you $90+ to get a barrel of oil out of the
Canadian oil sands and it is selling for $ 70, why
would you bother to operate at full capacity? You
wouldn’t.
By the time people come to the rationalization that
even with declining oil demand, supply can and will
drop faster and we will still have a supply v.
demand imbalance that will cause the price of oil to
rise. I predict that China’s hiccup will only be
temporary. Once it comes back on line you can expect
a dramatic rise in the price of oil.
the graphs are from international energy agency.
http://omrpublic.iea.org/
A
Stock Trading Experience
Goal (n.):
the end toward which effort is directed
It is my intention
to make myself an exceptional trader. One that not
only beats the stock market averages but the best of
day trading participants. To accomplish this goal I must
focus on and correct my faults.
That was my original
objective in starting this site.
Discipline (n.):
training that corrects, molds, or perfects the mental faculties or moral
character
It is easily
apparent to me that the time and effort that I have
spent building my stock market knowledge base has
not been reflected in my returns. When examining
this disconnect it always comes down to the lack of
discipline to focus and follow through on the plan,
system or strategy. I have always been able to find
the opportunities in the stock market. It is how I have
traded those opportunities that have minimized my
successes.
Experience (n.): active participation in events or activities, leading to the
accumulation of knowledge or skill
My second purpose
for starting this site was to provide a forum in
which to share the experiences that I encounter and
those which the market provides. It is from this
avenue that my family, friends, acquaintances and
people I have never met will be able to share in the
journey. It should be educational.
Where does our oil come
from?
Here are the top 10
suppliers of oil to the US in 2007 million barrels listed in order
2 of the top 3 are NAFTA
partners and the Democrats want to renegotiate that agreement?
Bring on 4 to 5 per gallon
gas prices. Thanks
READ MORE OF MY
DAILY MUSINGS
Homebuilders -
Amazing
4/3/08 -
1:35 PM
Why is everyone so bullish on home builders when the
builders themselves are very bearish. Does the
investor know more than the people that are actually
in the business? I think not and am looking to add
to my SRS position around 82.
What is in a 42 gallon barrel of oil?
Disclaimer:
None of the information contained on this site constitutes a
recommendation that any particular security, portfolio of securities,
transaction or investment strategies is suitable for any individual. The
information found here is not personal advice concerning the nature,
potential, value or suitability of any particular security, portfolio of
securities, transaction, investment strategy or other matter. Investing
in any stocks listed on this site is risky and speculative. Trading in
such securities can result in immediate and substantial losses of
invested capital. There is a high degree of risk in trading stocks and
other financial instruments. The information that you find on this site
is provided for educational purposes. We are not responsible or liable
to any person or entity for any damage, loss, injury, liability or other
cause of any kind based upon the information provided on this site. We
do not warrant that the information found on this site will be accurate,
complete, or without error. We are not an advisor. You are responsible
for your actions. ©
2008
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