07/10/09 Baltimore, Maryland The stock market registered another dull day of trading yesterday. The Dow finished flat, while the S&P 500 inched up 0.3%. With second-quarter earnings season now in full swing, we fear for the major indexes… it’s one thing to have “less awful” numbers in the first quarter, but we doubt many companies will be able to produce the “green shoots” results the market now craves.
“If you have gains, book ’em,” suggests Byron King. “I’m not issuing any official sell recommendations to my Outstanding Investments readers this week. But if you have gains in your holdings, now is the time to sell and book ’em. Even if you’re down a little bit, you should consider absorbing a small loss and avoiding a larger loss later on.
“Take gains on the industrial and infrastructure stocks. Even if everything were going great for the economy — which it’s not — the industrials and infrastructure guys would need another couple of quarters to get well.
“Be careful about selling out of energy and energy service companies. Yes, they could drift down a bit more, but not as badly as the industrials. I foresee oil in the $50s per barrel, and we’re almost there. Below that price? OPEC will tighten up. So it’s late in the game to sell down your oils and service companies. These stocks could, of course, go lower, but they’ll also recover faster. We could see $100 oil by the end of 2010.
“I’ve seen articles forecasting oil plummeting in price to the $20s per barrel. I doubt it. Why? Well, where will $20 oil come from? There’s a phenomenon called depletion. Most of the world’s daily oil comes from fields that were discovered 30 and more years ago, and those fields are coming to the end of their days. Even at reduced demand, the world is pumping out far more oil than the energy industry is finding. That can’t go on for much longer.”
Sign Up for The Daily Reckoning e-letter and receive a copy of Bill Bonner's The Trade of The Decade report… at NO CHARGE.
We Value Your Privacy.
When are you guys going to stop with this Peak Oil B.S. I know you are smarter than that. The World is awash in supplus Oil and has been for Years. With massive reserves and new discoveries, it has become impossible to keep tis scam going. How come the Russians were able to find it way below any levels where you would find any old palm trees? I guess you still beleive in Global Warming when the World has been cooling since the ealy ninties and only 10% of the World’s Galciers are really receeding and the rest are growing.
Keep up the fantacy.