Oil hit an all-time high of $72.49 on Wednesday after weekly data showed a drop in U.S. gasoline stocks, raising worries that refiners don't have an adequate inventory cushion ahead of the peak summer driving season. That, and an announcement by Iran's King Ahmadinejad saying that oil, even at $72.49 per barrel, is still underpriced. He knows exactly what to say to roil the oil markets, not that it takes much nowadays.
How did my foray into oil stocks fare? In less than 3 days, I made $504 on a $11,032 investment, for a 4.57% gain. I have a feeling this is only the beginning. Based on my earlier projections, oil has a target of $82 or more.
Its a strange feeling to profit handsomely on an issue that's causing everyone else such grief. Trust me, I'm not happy that oil might go to $82 per barrel. I'd much rather profit from shorting oil, making me the same profits, and having everyone rejoice with me. I am a realist, however, who realizes that the forces propelling oil ever upward are out of my control and that I might as well profit from them. This is the same turmoil experienced by a short seller in a bear market.
This logic leaves me with an answer to all those who complain about increased gas costs, etc: They can buy oil futures and oil stocks and hedge themselves. Big companies hedge against increased raw material costs all the time. Thats why the futures markets were created in the first place.
This leads me to an article written by Robert Kiyosaki, called The Coming Oil Crisis, in which he projects "oil at over $100 a barrel and gasoline at $5 to $12 a gallon at the pump."
I personally enjoyed the section where he talked about the "wealth equations" of most individuals and some companies versus that of oil companies and those investing in oil. He detailed how the former's wealth is negatively correlated with oil prices while the latter's wealth is positively correlated. Kiyosaki emphasized that the ordinary person has a CHOICE if they want to be the former or the latter. What will you choose?
How did my foray into oil stocks fare? In less than 3 days, I made $504 on a $11,032 investment, for a 4.57% gain. I have a feeling this is only the beginning. Based on my earlier projections, oil has a target of $82 or more.
Its a strange feeling to profit handsomely on an issue that's causing everyone else such grief. Trust me, I'm not happy that oil might go to $82 per barrel. I'd much rather profit from shorting oil, making me the same profits, and having everyone rejoice with me. I am a realist, however, who realizes that the forces propelling oil ever upward are out of my control and that I might as well profit from them. This is the same turmoil experienced by a short seller in a bear market.
This logic leaves me with an answer to all those who complain about increased gas costs, etc: They can buy oil futures and oil stocks and hedge themselves. Big companies hedge against increased raw material costs all the time. Thats why the futures markets were created in the first place.
This leads me to an article written by Robert Kiyosaki, called The Coming Oil Crisis, in which he projects "oil at over $100 a barrel and gasoline at $5 to $12 a gallon at the pump."
I personally enjoyed the section where he talked about the "wealth equations" of most individuals and some companies versus that of oil companies and those investing in oil. He detailed how the former's wealth is negatively correlated with oil prices while the latter's wealth is positively correlated. Kiyosaki emphasized that the ordinary person has a CHOICE if they want to be the former or the latter. What will you choose?
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