Investments of Interest

Ok, first of all, YOU must always do your own research.

I see several opportunities which are present and vary as to entry points.

Pay attention to the news, world events, advisors, etc.

 

Gold

 gld

 gss

 cde

 gfi

...Each have their plus and minuses but there is movement in this sector and entry/exit points reveal themselves regularly.  

Fact. Each company you might consider investing in may, and often does, have hidden dangers as they struggle with cash flow, sales, investors, everything.  Take a small mining company.  The value of their product, payroll, insurance, basic operating expenses, pressure seems to come from everywhere.

So, while some of these stocks are low, and I am involved with them, I could wake up tomorrow and learn of surprise collapse and failure.

 

Take CC, Circuit City. I was in it riding ups and down and was in when they filed bankruptcy.

So, there are risks.  I did good for a while with AIG, as well as FNM and FRE, but now are avoiding them.

 

Basically, most financial stocks seem completely uncertain at this moment and with the change in Presidency.  That uncertainty could extend a few months into his term.

That said, AIG, FNM, and FRE may be positions which I will take in anticipation for a bump at about the day of the change of power.  They will surely fall sometime afterward and become uncertain again for a while.

 

Ok, Gold mentioned a few stocks...

In the Oil industry, I like.

OIH

TDW

XOM

VLO

COP

 

But I am currently very positive about DTO and DXO, Double Long and Double Short, which were created earlier in 2008 and now appear to be good plays.

DTO had a high of about 160 a few weeks ago.

Hit about 110 and is, today alone up about 9.00 to 156!

An expensive stock, but here is the thing.

Oil Dropping, DTO Rising, and doing so by LEAPS.

Oil Rising, DXO Begins to Rise.  Now there is a uniqueness and DXO is not currently rising with oil increases as fast as DTO drops with oil decreases.

But... Here is a point of interest, no matter what oil related ticker you want to play.

 

Oil is about 44

US announced a surprisingly greater reserve inventory than expected, about the same time that a, possibly brief seize fire occurred between Palestine and Israel.

So, Oil Dropped, DTO Rose.

 

The expectation is for Oil to drop further, some targeting as low as 27 a barrel.

About 31 is the point that it seems too costly to pull the oil out of the ground.

 

Also Note.

US Government wants to add a new Gas tax to consumers at the pump.

They seem to believe that gas prices, now about 1.43/gallon are so low, that consumers are capable and willing to pay a higher price.  Thus, we should add a new tax in there.

 

Basically, the Government is revealing the believe that consumers can and will pay more.  This action will ultimately support investors drive the per barrel price UP.

 

Dubai, word is, with all the Massive and beautiful construction going on, the Prince faced a tightened cash flow caused by the reduction of profits on oil and began to BORROW money from the family.  Actually, there has been a lot of squirming in that region.

A recent report also stated the UAE was considering taking on a new investor.  Hmm, sounds like cash flow IS tight for them, and the INVESTOR, if one is taken in, will reap $$ when oil picks up.

 

Iran recognized cash flow issues...  Last year, economist suggested they establish their budget based on a per barrel price of oil of $38.  But, they did not heed the advise and established the budget based on a $55.  When price was high, they enjoyed the highlife.  When the price dropped, they ran into cash flow issues as well.  So, just a few days ago, Iran announced their 2009 budget and went the safe route basing it on oil prices of $37.50.  This year they will be safe, and enjoy any overages without issue.

 

UAE, United Arab Emirates about a week ago met and agreed to REDUCE production in order to halt the drop in prices and begin to increase them.

 

The point is.

While the price of oil may actually drop more, I'm looking for it to do just that, but I am also expecting it to go UP.

Reasons for UP...

Government reveals consumers can afford.

Becomes to cheap to pull out of the ground.

United Arab Emirates, who we buy from, wants to make money again and has the power to adjust production for that purpose.

 

To me, the greater powers require that oil will go UP.  Conservative average of $60 will allow economies to grow and flourish without hindrance by oil price.  $75 is possible, but begins to hurt.  $100 is also possible if greedy investors get involved.  Don't want to see $100, but, it is possible.

 

Lets look at a couple things.

DXO, I would buy in, anywhere below $3, which it is now.

If it goes lower, I'll by more.  Some target it to $1.60.

Buy and hold while oil is around $40 or lower.

When Oil hits $60, my conservative mark, DXO will be a gem in my portfolio.

 

XOM, COP, VLO.

In my humble opinion, 3rd grader look at them.

At any one moment in time, there are X number of barrels of oil, in transit, in storage, in refineries, owned, but not sold.

Those X number of barrels are worth X times $44

If prices rise, X times $60 means the company instantly has greater value and equity on the books and the stocks will rise accordingly.

 

So, I like DXO as well as XOM, COP, and VLO.

 

I also like BDCO(oil pipelines) which is pretty cheap right now and they have confirmed their pipes repaired and back on line since the major hurricane damage they sustained.

Hence, they will be back in operation and moving toward profits again. 

I like BDCO, but as always, be careful.

 

There you have it.

Without addressing technicals, a 3rd grader look at a few of my interests.

-Scott