I keep trying to undersatnd exactly why the price at the pump seems
inversely related to the value of stocks and funds.
Why is it that when stocks and funds are going down for however brief
period that the pump prices are going up up with two changes per day
in some cases?
How long is slide going to continue? Any conjectures?
On Thu, 18 Aug 2005, > wrote:
> I keep trying to undersatnd exactly why the price at the pump seems
> inversely related to the value of stocks and funds.
>
> Why is it that when stocks and funds are going down for however brief
> period that the pump prices are going up up with two changes per day
> in some cases?
There is some time lag between raw oil fluctuations, stock prices,
processing, and price at the pump. When you hear that the price of oil is
dropping, that is when to look for bargains in oil/gas related stocks or
funds. When I heard oil prices were dropping Wednesday, I looked for a
stock that was over reacting and picked it up near the bottom of a cliff.
It fell off of another cliff Thursday, but bounced back up Friday to close
near its Wednesday close.
Well, the concensus is that the war is winding down, oil has been going
up, so it is due for a pullback. There is minority that think it will
stay at these levels or even go higher. I sold MOST of my energy stocks
funds, sold two of my three oil stocks a month ago. They really helped
my portfolio the last two years. There is plenty of oil, though the
supply isn't increasing as fast as the demand. Bottom line, NO ONE
KNOWS, as usual. It IS well established that if oil goes up in price,
oil companies profits and stocks go up along with it. They can tack on
some extra profit somehow.
I also think interest rates are going up. That one is pretty much a no
brainer. I can't predict stock trends, but I've been able to predict
interest rates pretty well. I bought some bonds back in '82 that were
paying 15%! Boy those did well for a long time. But the downtrend in
interest rates is over, I think we've seen the bottom. I shortened the
term on what few bond funds I hold to average of two years. Probably
ought to get out of them altogether and just stick it in money market.