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Time to get out of US equities
various markets | 08/09/05 | MB Poe

Posted on 08/10/2005 2:59:10 PM PDT by MichaelP

The spike to almost 65$ oil today is a signal to get out of US equities. The last week's drop and the continued upward curve from the dow say we are headed for a big drop in most stocks. If you aren't in energy, you had better be in emerging markets. I made the move today.

Mike


TOPICS:
KEYWORDS: coasttocoastam; deadcatbounce; doomers; dow; emotionalinvesting; froth; marketmanipulation; masshysteria; nasdaq; peakoiltinfoil; russ2k
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To: GOP_1900AD

I think you should check out the facts concerning peak oil. [my degree - physics, 1975]


61 posted on 08/10/2005 4:42:19 PM PDT by GregoryFul
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To: GregoryFul

I have. And when I look at websites such as "dioff.com" (which has lies instead of facts) I see what animates the doomers on this topic. Are you a doomer?


62 posted on 08/10/2005 4:43:27 PM PDT by GOP_1900AD (Stomping on "PC," destroying the"and Left, and smoking out faux "conservatives" - Take Back The GOP!)
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To: GregoryFul

The realm of Peak Oilers and Tin Foilers:

http://dieoff.org/

Now, if you were a commodity frother, imagine trying to resist "tapping into" all the angst and fear resident in places like this "Die off" cult and others like it. Sadly, far too many people have gotten hooked into aspects of this whole Dieoff / Earth Changes / Doom / New Age / Aquarian BS. Probably a number of people here at FR included. Are you one of them? If so, the commodity frothers absolutely adore you! They can manipulate you like a marionette. Imagine it - commodity scammers with an unpaid army of disinfo sowers - helping them to continue the froth! With the dot com market is was irrational exuberence, with the oil commodity market its irrational doom, gloom and fear.


63 posted on 08/10/2005 4:50:46 PM PDT by GOP_1900AD (Stomping on "PC," destroying the"and Left, and smoking out faux "conservatives" - Take Back The GOP!)
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To: MichaelP
Pretty good wall of worry the last few weeks....The trend is your friend....And trends ( either up or down..) are pretty powerful things.

Although sentiment is extremely bullish...which being a contrary indicator..is bearish. So, caution is prudent....But hey...it's the stock market...prudence is nearly always justified. LOL!!

And hey you can always play the "other side" of the market.....

FWIW-

64 posted on 08/10/2005 4:52:13 PM PDT by Osage Orange (Long DEPO)
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To: GOP_1900AD
Theories are often proven by elucidating predictions, then observing whether or not the predictions correspond with reality. Peak oil is supported by many well connected and level headed people in the oil industry - and exponentially increasing prices is its major prediction (diminishing supply + inelastic (and growing) demand = (wildly) increasing prices). Seems to be happening. Now if we watch total production figures, and see that they have leveled off this year, and trend down next year, well, that's sufficient to alarm me.

So what have you got? A conspiracy of oil sheiks moving the price up cause they are greedy? Too much speculation? George Soros? GWB?

65 posted on 08/10/2005 4:55:19 PM PDT by GregoryFul
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To: Phsstpok
They will sell the rope to hang themselves."
spoken like a true disciple of Andropov. Almost 100% out of doctrinaire kant

Who's your handler? Heard from Dzerzhinsky Square recently? Oh that's right. They've moved.

Tin foil hat firmly in place, just in case. But I don't think I'm going to need it, now am I?






What? Why do you write like that? Oh, I see, it's fun! Short choppy sentences. Yes! I can do it, too! Right? But! You see, it lends no authority to what you say. That's right! And, after awhile! It's just annoying. Really. It is.


But that's not my point. My point is not that capitalism is flawed. It is. Or that communism is better. It isn't. My point. Actually I have two points:

A)Capitalism is enduring despite the traumas.
B)In a world of evil, communism ranks up there, but it is not the worst of it. That said. To relate all evil to communism is juvenile.
66 posted on 08/10/2005 5:02:08 PM PDT by durasell (Friends are so alarming, My lover's never charming...)
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To: GregoryFul

What we've got is very simple. Commodity scammers have learned how to rile up the Peak Oilers who then sow fear of shortages and "the end of affordable oil." On top of this, additional fear is sown about "possible terror attacks in Saudi Arabia" or even, the 18 wheeler towing oil that flipped over on the interstate or any of the typical fires that happen from time to time at refineries. This causes artificial price inflation. Small time investors flock to the market. The price goes up even more due to speculation. Then, inevitably, the market does respond, albeit slowly, since there is reluctance to risk major capital outlays on anything but the surest thing, because the memory of the 1980s oil bust is long and painful, especially in places like Houston and California. As this slow increase in supply happens, the market inevitably starts to soften. Those who got in too late panic - they take to the web, hoping to crank up the fear and worry that initially caused a rise in price. There starts to be a series of dead cat bounces, as the tension between actual supply and demand dynamics versus emotional investing and speculation, becomes more intense. Some of these bounces are remarkable and result in new all time high prices. But lo and behold: At some point, the froth can no longer be sustained. Woe to the late arrivals in this market.


67 posted on 08/10/2005 5:05:16 PM PDT by GOP_1900AD (Stomping on "PC," destroying the"and Left, and smoking out faux "conservatives" - Take Back The GOP!)
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To: durasell
durasell wrote:

What? Why do you write like that? Oh, I see, it's fun! Short choppy sentences. Yes! I can do it, too! Right? But! You see, it lends no authority to what you say. That's right! And, after awhile! It's just annoying. Really. It is.


But that's not my point. My point is not that capitalism is flawed. It is. Or that communism is better. It isn't. My point. Actually I have two points:

A)Capitalism is enduring despite the traumas.
B)In a world of evil, communism ranks up there, but it is not the worst of it. That said. To relate all evil to communism is juvenile.

Well, yes, if you learned English at KGB training school (or any of 1,000 US institutions of "higher education" I guess "short choppy sentences" of the type most Americans use would confuse and bother you.  After all, it doesn't fit your maskirovka.

As to the rest of your confused and meanigless drivel, can it clowny.  Your lame defense of the indefensible by resorting to relativism and accusing anyone who disagrees with you of being juvenile is puerile and sophomoric.

So there. 

Please call Ward Churchill before your next post.  I'm sure your old professor will have more dialectic to offer.  Hopefully he will also include some advice on forming a coherent thought, as you have failed miserably so far.

68 posted on 08/10/2005 5:11:38 PM PDT by Phsstpok (There are lies, damned lies, statistics and presentation graphics, in descending order of truth)
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To: MichaelP

Yes, yes, yes.


69 posted on 08/10/2005 5:33:09 PM PDT by Eric in the Ozarks (Scratch a Liberal. Uncover a Fascist)
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To: Moral Hazard

I don't either. I'd set my sights on nothing less than 50 mpg. Keep that gas money !


70 posted on 08/10/2005 5:36:24 PM PDT by Eric in the Ozarks (Scratch a Liberal. Uncover a Fascist)
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To: GOP_1900AD
Well, yes, it could be a giant conspiricy. But we have observed peak oil reached in regions - the US in the early 70's, the North Sea, in what 1999 or so, and Saudi Arabia (2005)? US proven reserves (and production, lagging) have declined significantly since the 70's, (1980: 30bbl, 2005: 22bbl), Mexico, (1991: 52bbl, 2005: 14.6bbl), the North Sea, some 25%.

Some say that the Saudi fields' production has been pushed beyond sustainable levels for some time now, and as a result production could suddenly collapse, perhaps by the end of this year. The OPEC countries have been reporting essentially constant reserves since 1990, despite extracting significant quantities of the stuff. Since their quotas are based on their reserves, there is a good chance that they are misreported.

There are lots of real world signs that connected decision makers are aware of the reserves/production problem, and have made their investment decisions accordingly.

There are other things that don't make sense, for instance, why do crude prices go up when a refinery stops? One would expect the price of crude (the input to the refinery) would go down, and only the products, gas, kerosene, etc. would increase in price. That is curious, and probably a second degree affect from ill informed "investors".

The ME has always been an unstable area, an investor would discount current uncertainty against the historic backdrop.

How much would you pay for a gallon of gas? It's real world value is much higher than the price we pay, is it not? Demand is relatively inelastic, and growing due to economic expansion in US and China.

Discoveries of large deposits of oil are rare, and the last one was a long time ago in Saudi Arabia, despite lots of people looking. The some 30 major fields of Saudi Arabia are 20-30 years old. But despite large extractions of oil, Saudi Arabia says its reserves are about the same as they were some 15 years ago - believe that? They say they have huge reserves, but are tapping them at a very low rate. Believe that? (In 2003, Russia had 4x the production rate per reserves, the UK some 13x).

71 posted on 08/10/2005 7:03:04 PM PDT by GregoryFul
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To: GregoryFul

There is essentially no exploration or new drilling right now in California. A number of offshore fields are completely untapped. There are others here on land, that were slightly tapped by wildcatters during the 1930s but have never been fully developed. One of these is where I live. This scenario repeats across at least 20 other oil areas in the CONUS.


72 posted on 08/11/2005 11:20:13 AM PDT by GOP_1900AD (Stomping on "PC," destroying the"and Left, and smoking out faux "conservatives" - Take Back The GOP!)
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To: GOP_1900AD
US reserves are around 2-3% of world reserves, a tiny fraction of reported reserves, so anecdotal reports about what the US activities are at the margin of the supply problem.

As pointed out by peak oil alarmists, the development of the infrastructure or capital investment to support/deliver energy from alternative sources requires a large input of energy, currently oil, and so some projects may never be cost effective. We have the fact of cheap oil built into the fabric of our economic life, and soon it may become very expensive.

People say we can use coal - but coal is a very low grade source of energy compared to oil.

Oil shale? Billions have been spent on trying to achieve a laboratory scale process for efficiently converting oil shale to an energy source. And failed, the energy input is more that that recovered.

People say we can use nuclear - but by some accounts, the energy budget is also negative for constructing and running a nuclear energy plant. Perhaps a new design would provide, the pebble-bed reactor, but it would require a Manhattan Project type effort to build the infrastructure to head off what seems to be coming.

Solar? The silicon for solar panels, shipping, and installation of same is more expensive in terms of energy than the lifetime output from the panels. They are good for some purposes - remote from the grid applications, but for the most part, a loosing proposition - and considering the energy input required, will always be.

Bio fuels? Oil stocks feed fertilizer, pesticides, farm equipment, transportation, etc. A looser.

Wind? Good for some fortunate locations. Unlikely for most.

Cold fusion of one sort or another is about the only possible solution, but if tomorrow it were announced that a 10 to 1 return on energy is achieved in the lab, it would take 20-30 years before the infrastructure were up to providing that to the common folk.

But what do we do with the multi-trillions of dollars of investment in infrastructure that depends on oil? It becomes scrap, and we go back to the bottom of this great 150 year super-cycle powered by cheap oil. It is a scary scenario - but that doesn't preclude it from happening.

73 posted on 08/11/2005 6:49:30 PM PDT by GregoryFul
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To: MichaelP

Still happy you did this? Today 11/23/05 oil at $57. Dow at 10,932 as of 2:00pm est.


74 posted on 11/23/2005 10:58:44 AM PST by loreldan (Lincoln, Reagan, & G. W. Bush - the cure for Democrat lunacy.)
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To: loreldan

My Fid Canada and Promark Emerging market eq and international equity are up from 10-20 % since I made the move. I left 40% in small cap value and stock. I'm completely happy.

Mike


75 posted on 11/23/2005 11:43:55 AM PST by MichaelP ("Opportunities multiply as they are seized." Sun Tzu)
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