Emotional speculation behind the high gas prices?

LouBelle

I ask this because I know how emotion can drive the stock market. All a share needs is some small bad/good news or rumour and this can make it rise and fall. Is something similar happening with the gas prices?

Seeker4

Speculation in the investment world with regard to oil is said to be adding at least $1 a gallon to gas prices, and some claim considerably more than that.

I for one am living so on the edge at the moment that it's scary.

S4

LockedChaos

The old rule
Buy on rumor............sell on news.
That's the mantra of the "Day Traders".
A superstitious lot.
That does not make for for good investment or trading.
Though money can be made on it. I don't like the odds.

The market is very counter intuitive.
The truism of "Buy Low and Sell High" seems
logical and simple enough, yes.

See how you feel when your investment thesis is very
sound, you bought in in increments to attain your
desired position, and then WHAM!!!
For no reason at all there is a sell off and your stock
takes a big nosedive.

Your first inclination is to sell this dog, I don't want to
lose any more money.

Or is it a buying opportunity?? Is the thesis still sound?
Are the companies still good?

It's all about your investment strategy, the homework you've
done, and your investment discipline.

I keep a little sign on my calculator next to my monitors,
"Discipline Trumps Conviction".

If you invest remember it.

kurtbethel

Speculation tends to have a long term effect of making the price of a commodity level, though it gets the most attention when there is a short term spike that has winners and losers in the transaction.

There are two other forces driving oil prices up. One is the increased demand of China and India having economic growth and building infrastructure. This has increased other commodity prices, including cement and copper.

The other factor, which does not get as much press as it deserves, is the fall of the value of the dollar. Dollars simply have less value relative to oil, as well as gold and other commodities, so one must offer more dollars to obtain the same amount as before. That is a fancy way of saying "price increase".

LockedChaos

Kurtbethel

Good points. Oil is traded in dollars.
Some say oil is the new currency.
Personally I don't think so.

All indications are that it really is a supply demand issue - primarily.

If you want to trade oil look at the ETF for oil -XLF is
the symbol.

To scary for me. I prefer to deal in the services.
Same with gold. Scares me

LouBelle

The dollar has strengthend this side of the ocean - at one time it was in the region of R 4/5 to the dollar but is closer to the R 8 mark these days - perhaps with other countries it's weaker?

I'm only getting the following from SA news sources - OPEC says that that demand IS being met and mentioned that they've increased output by an additional 200 000 barrels (don't know if that makes a difference) Plus there is no shortage of fuel any time soon.

LockedChaos - my share group invested in two gold companies - did very well! Fortunate to sell when they hit a few highs in a row.

dinah

Just buy alot of K-Y Lou.

Americans don't watch the news.

China and India's demand is BS!! America is trying to own the supply. THAT is what the American government underestimated. Not the demand of foreign nations, but the supply of our pockets, America's ecomony is tanking.

LouBelle

KY dinah - you've sent my mind into the gutter.

dinah

Well, you build a culture on cheap gas, who really gets it in the end?

They marketed these 9 mph vehicles to us for years. Praise the Lord I didn't buy into it.

LockedChaos

LouBelle

The Saudis kicked up their production somewhat with
more promised. The bad part is that they pump "Sour Crude".
Sour crude requires a lot more refining than the highly
desired "Light Sweet Crude". Light sweet is what is used
primarily for gasoline refining.

The US needs to drill more. Since 1969 the US ban and
paranoia on sea drilling has required that they rely
solely on others to provide them with oil.
The US needs to conserve and increase drilling.
That will ease the immediate problem.

Then begins the fun of long term energy planning and
new technology development.

I have dabbled in gold futures and in mining stocks.
I was long at the right time, went short at the right time
and completely left the table when my nerve began to
waiver. To hard for me. I do always keep a bit in my
portfolio as insurance at all times though.

Emotional speculation behind the high gas prices?

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