Is Now the Time To Invest In Oil Stock ?

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Stargazer

Stargazer

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With oil prices going up is this the right time to buy oil stock? This would offset some of the higher prices we pay at the pump and them some for a lot of people. The question is, when it will it peak? Or does it have a long long long way to go such as $300-500 per barrel? Will alternative energies come out before it gets that high? Hearing that gas is going to $5-10 per barrel would indicate that oil would have to go up much much more than it is right now.
 
charper1

charper1

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I would say maybe; but I would put more money into buying real estate; property tax foreclosures and possibly mortgage pre-foreclosures. You can turn them or rent them and make as much if not more money; faster. I am choosing rentals over sales at this time though.
 
SatinKzo

SatinKzo

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Stocks in oil is one thing (those companies have revenue streams other than oil and are primed to invest in alternative fuels too). Putting money in Oil as a commodity and playing the futures market is another story.

I have not stopped buying oil STOCKs and even in the late 90's when oil bottomed out, oils stocks still were a nice part of my portfolio.

As a rule, I don't play with futures or commodities cause I don't have enough money to even begin to play around and feel comfortable doing that in those markets. Same goes for Coffee, orange juice, etc. Too much manipulation in those markets and always has been. Unreasonable euphoria and panic can make/break an investment with no solid data behind the trends.

If you don't mind monitor stocks on a weekly basis or have a broker that can do text alerts or does cheap stop/limit trades then maybe you should do something like I do.

I do short term trading, no day trading, but short term. It's hard to sell stocks in lots of more than 5000 shares at a time on the market that the general public has access to. So I take a starting amount say $1000 for easy math and find stocks that I can buy that will appreciate soon and keep me under the 5000 share ceiling that seems to exist when selling to the general market.

Find a stock that you think can go up 20% or in a short time, maybe a week or so (there are lots that do this and no they are not penny stocks). When it goes up 20%, sell it.
Take the new amount $1200 - fees and invest in a new stock that you think will go up. When it does sell it.
etc etc etc
Sure not all go up 20%, but if you buy on a Monday each week and sell when it goes up 20% or just sell on Friday even if it's up 4% or 12% you easily make a good return. Sure some even go down and maybe you sell at a loss or even wait a couple more days to see what happens. On average, I make 40-50 trades a year, little less than 1 a week and I don't get rich overnight, but it does pay the bills. There are other things to be careful when doing lots of short term trading, too many to get into here, but the biggest one for me and most is to make sure you don't keep flipping the same few stocks over and over, gotta make sure you keep looking into new stocks.

My motto in this strategy to keep me from getting greedy is: No such thing as bad appreciation; Never go back to see what the stock did after you sold it.
 
bradb007

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The RIGHT time is hard to say, but my guess is it would have been about 5 years ago. Best strategy is to buy a broad diversified portfolio and try to limit your expenses. Overloading or guessing on this stock or that is just gambling and I prefer to do that in Vegas when you know exactly how bad the odds are against you vs Wall Street when you have no idea how much institutional investors and active traders have stacked the deck against you...
 
Skyhi

Skyhi

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The RIGHT time is hard to say, but my guess is it would have been about 5 years ago. Best strategy is to buy a broad diversified portfolio and try to limit your expenses. Overloading or guessing on this stock or that is just gambling and I prefer to do that in Vegas when you know exactly how bad the odds are against you vs Wall Street when you have no idea how much institutional investors and active traders have stacked the deck against you...

+1

Having said that, the answer to the question depends on why the price of crude continues to rise.

If you believe that oil has peaked and that demand is outpacing supply, then it might be an alright time to buy.

If you believe that the price is rising due to market speculation, then stay away. If speculators are causing the gains then the bubble will inevitably burst (see dot-coms and real estate)
 
HD MM

HD MM

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IMO, the OIL commodity has peeked, if not now, soon. Being "Green" is the current rage. Plus, there are a ton of engineers out there working on alternative fuel and different ways of powering cars. The UAW and American Auto industry is hurting now. Everyone is looking for a new car of the future to regain sales. These industries are scalling back the big SUV productions and replacing with more fuel economic types. You would think that the demand for gasoline would go down as prices at the pump go up, thus decreasing the value of the oil commodity.
 
Stargazer

Stargazer

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The increase in demand in developing countries and hurricane season coming may mean that it may go up a bit more before it would start going down.
 
truckracer

truckracer

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Sep 17, 2004
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I wouldn't invest $hit in an oil company. It has to be the most crooked business on the planet.

Invest in real estate or something more promising. The bottom is going to fall out of the oil market. Just like a wet paper bag full of heavy soup cans.
 
Skyhi

Skyhi

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I wouldn't invest $hit in an oil company. It has to be the most crooked business on the planet.

Invest in real estate or something more promising. The bottom is going to fall out of the oil market. Just like a wet paper bag full of heavy soup cans.

I don't think you're correct, but I sure hope you are!
 
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BigTimMN

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When the masses start buying into something (oil, etc), its time for the savvy investor to get out or stay away.
 
BobMurdoch

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When the masses start buying into something (oil, etc), its time for the savvy investor to get out or stay away.

Truer words were never spoken. By the time the average guy thinks it is time to get in, then that is the time to get OUT. Time magazine has an article this week about a guy who made billions in oil stocks and has now divested himself from all of them as he believes that a bubble has developed which will be popping quickly. SUVs are getting scarcer on the roads, people are using mass transit in record numbers, and people are finally changing their consumption habits. China and India has driven up demand, but they are building refineries like crazy. We are even EXPORTING diesel as prices are so high.

In 1983 prices plummeted after people traded in their gas guzzlers for rice burners. The same is happening now. It may happen in November after the election, it may happen in 2009 or 2010, but prices will eventually come back down to earth. And when they do, it won't be a gentle glide. Speculators have bid up the price, and they will just as quickly bail out to cover their short positions....
 
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