The Oil Drum | Price Spike Open Thread...

73 comments on Price Spike Open Thread...

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Glenn on January 3, 2006 - 3:00pm

My energy / gold portfolio is up almost 3% on the day. Glad to see it working hard for me.

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nulinegvgv on January 3, 2006 - 3:08pm

Speaking of which, if I wanted to educate myself about which mutal funds or even specific energy companies might make sense to role a modest investment into, might someone know where to go? I got a little bit of $ that sat flat in the stock market that needs a new home. The problem is that every time I wade out into the dang ole internet I just get advertised to. I know, I know, no need for disclaimers. I'm not looking to hold anyone accountable.

Unless I lose money. Kidding.

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Glenn on January 3, 2006 - 3:23pm

I made some of my own recommendations back a few months ago on my old blog.

Gold is still a very good safe investment in my book. Rail, alternative energy, oil/natural gas exploration companies, and commodities businesses are good buys still in my humble opinion.

Perhaps we could have more discussion of financial issues here. I'll list off my favorite tickers here, some of which I own, some of which I would like to get at a lower price:

CSX, ESLR, GLD, LNG, PBW, RAIL, SNG, SU, TGA, TXCO

What's everyone else's portfolio look like?

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Oil Trader on January 3, 2006 - 4:03pm

Long CL Nymex, Dec08,09 contracts use to trade the front of the board as well but this market has changed, If you want to see evolution in high speed watch the futures market survival of the fittest playing out at high speed.

Have been long since Dec o6 contracts where $20.00 (2000) used the profits to set up a low energy imput farm. Farm land prices are going crazey and in my region. Bucking the slow down trend in realestate.

Long gold, Long wheat july 07.

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DaveS on January 3, 2006 - 4:04pm

A few others:

Stocks/ETFs: ERF, PVX, XLE, GG
Funds: ICENX

Looking at the new Euro-backed ETF, FXE, as a possible add in the not too distant future. Definitely a great new tool for small investors.

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GliderGuider on January 3, 2006 - 4:45pm

I'm out of all US stocks - all my money is home in Canada. Half is in a diversified portfolio that's being professionally managed, the other half is in about 15 Canadian energy stocks. They're mostly oil/NG E&P's, with some service companies, some oil sands and one uranium stock. It's a volatile ride, but it's showing a ton of medium-term promise.

I figure that we Peak Oilers have about 7 years left to use our insight into what's coming. We should be able to leverage that insight into enough money to get us through a few years of the decline. I expect that as oil/gas supplies get tight a lot of money is going to pour in from other sectors to support Hail Mary drilling programs. Those who are already invested stand to make a lot.

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nulinegvgv on January 3, 2006 - 5:14pm

I've got some metal to hedge against a U.S. dollar crash but as far as energy investments here's my problem. Won't NG stocks have trouble once Joe public/Joe trader understands that the depletion rate looks like a cliff? If I'm in a mutual fund with NG might the same thing not happen? And then eventually oil as well? I mean isn't Ford and GM trouble just a precursor to gasoline companies taking a beating? Or will the increased price of oil make profits soar and make up for the demand reduction? Oil companies have been doing well, very well for themselves. Solar and similar sustainable technologies look good but don't look like they'll have the excellent returns of the hydrocarbon-based companies until we're really slip sliding down the backside. Every time I mention anything like this to my banking friends (Charlotte NC) I get this look like I'm from another planet. I guess I need a financial adviser who's Peak Oil Aware. In line with that last statement any suggestions for someone with modest cash but a will to listen and a want to learn? I mean other than just reading George Ure each morning?

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GliderGuider on January 3, 2006 - 6:20pm

I figure there will be a one to two year period during which everybody figures out that energy is the place to be due to rising energy prices, but haven't grokked the endgame yet. My plan is to watch the markets and get out before that realization hits. I figure that's five years out or a bit more, given that PO happened last year or this year. I think similar rules will apply to NG and oil. I view an investment in uranium mining as a longer-term hedge for the time when the pressure for energy sweeps away our common sense. I think you're right that alternatives will only take off once everyone realized we're hosed. At that point biodiesel might be the place to be, especially algal biodiesel.

As for investment advice right now, I don't have any except for the really basic rules I used for myself. Diversify within the energy sector, pick a range of company sizes and niches, check out their track records and fundamentals, do their charts, but plan to stay invested for a few years. For me the energy sector is too volatile to make it comfortable for day trading, though people who can stand the bumpy ride will make more money than I will.

I found that a portfolio of around 15 companies was the right size. It's big enough to diversify somewhat, but small enough to manage and also small enough not to dilute out from averaging if you make good picks. To ensure that last point, I rebalanced it a couple of times over the first three months to get rid of the dogs. Now that I'm happy with my picks I'm just going to let her ride.

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teemu on January 3, 2006 - 5:03pm

My portfolio:

NYSE/NASDAQ: EWZ, CEE, BNI, NSC, EWC, IGE, CCJ, SUNW
Paris: Areva Group
Frankfurt: EasyETF GSCI (commodity etf)

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bburnett on January 3, 2006 - 7:40pm

I'm also wondering what will happen to energy company earnings as peak oil hits. Guiness Energy seems to be peak oil aware (order their energy report); I am counting on them putting investments in the best companies:
gagex - Guiness Energy
umesx - another energy fund I recently dumped; was consistently underperforming gagex
pcrdx - Pimco Commodity Futures - Isn't as heavily energy weighted as Oppenheimer QRAYX but pcrdx is no-load
PBW - Powershares Alt Energy
bni - Burlington Northern
cmc - Commercial Metals Corp - metal recycling
can't bring myself to buy a coal company directly

With the yield curve inverting; the beginnings of a bear market are likely upon us. These might be the best for a while
bearx - bear market/gold
dodix - intermediate bonds

Some traditional no-loads that I've done well with:

brsix - ultra small cap
braix - aggressive
brlvx - large value
brsvx - small value
RISIX - international

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chasbuddy on January 3, 2006 - 5:48pm

Try McDep.com.....I have never lost a penny on his recos. Been in the biz for many years and knows the various mangements. I buy his deep value plays.

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Bubba on January 3, 2006 - 10:46pm

You may want to check out this post

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Glenn on January 4, 2006 - 12:09am

Thanks Bubba! UTS was a great buy last year. I kind of feel like I missed the boat. How do you Buy Canadian?

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Bubba on January 4, 2006 - 8:23pm

All of the Canadian companies I mentioned in my post are also either traded on the US exchanges (Suncor, Canadian Natural Resources) or are traded over the counter in the US in US dollar denominated securiteds (UTS, OPTI Canada, etc.)

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wkwillis on January 4, 2006 - 5:25am

Worry about the dollar collapsing more than anything, and what it will do to the metrocoastal area property values. That's the big one.
Think 1% of your money in physically possessed silver and gold as temporary emergency funds, 4% in actual cash, both in your home where they can't get grabbed by the government (as happened in Argentina and Russia recently), and one third each left in the stock market (diversified), residential property, and bonds (diversified maturity).
Don't buy commercial, forest, or royalty real estate. You don't know enough to pay a sensible price unless that's your business.
I wouldn't mind buying land that has just been lumbered, though. It's value is very low so it's hard to go wrong.

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wkwillis on January 4, 2006 - 7:12am

Oh, the reason you would buy it is that we are eventually going to be telecommuting and somebody will want his cabin in the woods. Lumbered areas are pretty quickly full of low growth saplings that deer find more attractive than full growth timber. Likewise wildlife in general for the back to nature types.

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73 comments on Price Spike Open Thread...

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