Gold, Why not Oil?

Since I'm not inclined to believe that Mad Max days are ahead of us, I too
don't see the point in investing in a lot of gold. But why not mutual funds
based on energy & materials? If even if you're skeptical (which I am, I
think we're on the last leg of the bull market) on US growth, India, China
and emerging markets it appears will sustain their growth and demand for
metals, oil etc..etc...

Plus, I don't know many folks who are predicting that oil will stabilize in
the long run.

Why not some ETF's like OIH (I've held it since 2003).

On the LSE you can actually buy oil contracts in an ETF. Too bad we don't
have that around here.

-Mike

Re: Gold, Why not Oil?

Mike Stone wrote:
> Since I'm not inclined to believe that Mad Max days are ahead of us, I too
> don't see the point in investing in a lot of gold. But why not mutual funds
> based on energy & materials? If even if you're skeptical (which I am, I
> think we're on the last leg of the bull market) on US growth, India, China
> and emerging markets it appears will sustain their growth and demand for
> metals, oil etc..etc...
>
> Plus, I don't know many folks who are predicting that oil will stabilize in
> the long run.
>
> Why not some ETF's like OIH (I've held it since 2003).
>
> On the LSE you can actually buy oil contracts in an ETF. Too bad we don't
> have that around here.
>
> -Mike

Yes, good thinking, probably. However, as even I have been saying this
for some time and a lot of other investors must have thought of it too,
the question is whether the future prospects for energy and materials
are already factored into the price.

What you can do with company shares is look at the p/e, the dividend
yield and the predicted growth rate and see if it seems cheap or
expensive. On this basis some UK mining companies, for instance, look
worth buying and others look over-priced. Both main UK oil companies
look over-priced. Of course this may just mean that the predictions
about future growth rates are wrong and the EMH will win in the end.
Tests on the accuracy of predictions show they can be a long way out.

A sector fund is managed so you are relying on the fund manager to make
the right decisions about which companies to buy and sell. Is there any
sign they do this consistently? Not a lot, according to various books.

Some alternatives....

Oil & Gas UltraSector ProFund will give you 150% of the Dow Jones U.S. Oil &
Gas Index.


ETF options:


Futures:


Good luck!



"Mike Stone" <> wrote in message
news:NSJKe.55348$
> Since I'm not inclined to believe that Mad Max days are ahead of us, I too
> don't see the point in investing in a lot of gold. But why not mutual
> funds
> based on energy & materials? If even if you're skeptical (which I am, I
> think we're on the last leg of the bull market) on US growth, India, China
> and emerging markets it appears will sustain their growth and demand for
> metals, oil etc..etc...
>
> Plus, I don't know many folks who are predicting that oil will stabilize
> in
> the long run.
>
> Why not some ETF's like OIH (I've held it since 2003).
>
> On the LSE you can actually buy oil contracts in an ETF. Too bad we don't
> have that around here.
>
> -Mike

Re: Gold, Why not Oil?

That's a good point. I don't think oil is necessarily good to replace
investing in stocks, but if you're going to invest in gold to retain
the real value of a dollar, you're probably better off investing in oil
commodity.

Re: Gold, Why not Oil?

Mike Stone wrote:
> Since I'm not inclined to believe that Mad Max days are ahead of us, I too
> don't see the point in investing in a lot of gold. But why not mutual funds
> based on energy & materials?

I have been invested in RSNRX for years, and I've been very happy with it.

However, right now is probably not a good time to get into RSNRX. The
demand for raw materials has been driven by the rapid industrialization
of China and India. China is headed for a correction; it's nonstop
growth can't go on forever.

So I would say to wait for a mild recession in China to lead to a
decline in commodity prices--and then buy in!


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.

Re: Gold, Why not Oil?

Steven L. <> wrote:
> However, right now is probably not a good time to get into RSNRX. The
> demand for raw materials has been driven by the rapid industrialization
> of China and India. China is headed for a correction; it's nonstop
> growth can't go on forever.

Completely off topic but I read in the NY times that GM sells $5k
vans in China that are fuel efficient.

Why the hell can't those nuckleheads sell that sort of product
here??

-Mike

Re: Gold, Why not Oil?

"Steven L." <> wrote

> China is headed for a correction; it's nonstop growth can't go on forever.

Do you think?

Thier exchange was at 1778 in April of last year. It fell to 1011 last
month.
That's a 43% drop. I bought some GCH yesterday. Sure, it could go lower buy
it looked like an attractive entry point to me.

Re: Gold, Why not Oil?

"Mike Stone" <> wrote

> Completely off topic but I read in the NY times that GM sells $5k
> vans in China that are fuel efficient.
>
> Why the hell can't those nuckleheads sell that sort of product
> here??
>
> -Mike

They must be building them there. They can't sell them for that here because
the GM labor force here can't live on $50/month.

Re: Gold, Why not Oil?

Ed wrote:

> "Steven L." <> wrote
>
>
>>China is headed for a correction; it's nonstop growth can't go on forever.
>
>
> Do you think?
>
> Thier exchange was at 1778 in April of last year. It fell to 1011 last
> month.
> That's a 43% drop. I bought some GCH yesterday. Sure, it could go lower buy
> it looked like an attractive entry point to me.

I used to own GCH. What is its current discount to NAV? It used to
average about 15% discount to NAV over the long haul.


--
Steven D. Litvintchouk
Email:

Remove the NOSPAM before replying to me.