A Little Something About The Price of Crude Oil.

I was going to do a lot of writing about gas prices. Instead I’m going to do a little writing and provide you with a few good links to follow up with.

 

The United States is not the center of the crude oil universe. As soon as we understand that, the better position we will be to manage our consumption and use of petroleum products. This is turn will lead to stability in the price of a gallon of gas. The relative supply and demand for a product will determine its price in the market.  We are not in control of the global supply or the global demand of a global commodity (crude oil). It’s going to be a real challenge for the US consumer, but we are a tough bunch and we will get through it.

 

CNN Topic Gas Prices - http://topics.cnn.com/topics/gas_prices

 

Petroleum Industry - http://en.wikipedia.org/wiki/Petroleum_industry , http://en.wikipedia.org/wiki/Petroleum

 

Speculators affecting the price of oil - http://www.chron.com/disp/story.mpl/front/5800462.html

 

Oil Executives Testifying to Congress - http://www.nytimes.com/2008/05/23/business/worldbusiness/23oil.html#

 

Congress Votes to Stop Stockpiling Oil - http://www.nytimes.com/2008/05/14/business/14oil.html

 

What Does Gas Cost in Other Countries? - http://www.msnbc.msn.com/id/12452503/

 

Oil Price History and Analysis - http://www.wtrg.com/prices.htm

 

 

 

Yes I can back it up.

I got an e-mail directly from someone who read my last blog post. He asked me to support my position regarding stock analysts not being all that smart. Check out this article “The New Math” by Jack Hough from the May 2008 issue of Smart Money magazine. His objective is to show how a new formula can predict stock prices. He has some great comments on what it takes to be a stock analyst.

 

So, bobbytwotimesgetthepapers@aol.com, take that!

I'm calling out the professional stock brokers ....

Here is my great revelation on the stock market. Nobody has any real clue what’s going on.

 

During my time working on my MBA, I realized a great expansion of my understanding of financial markets. I started actively watching the stock market. I expanded my financial education so that my own investments in the markets would have positive returns. I started investing this year with my own brokerage account.

 

My revelation is not shocking to the people similar to me: small individual investors. The professional investors will tell you otherwise, but I know better. Here are my reasons why I believe I’m right and most of the paid professionals are wrong.

 

ü      Analysts are not interested in the same metrics as executives. I believe analysts are interested in one main metric: net income.  However a company makes that bigger, so be it. Reduce expenses, grow sales, and increase prices.

ü      Expectations are the measuring stick. Watch what happens to a stock price when a company releases record earnings, but didn’t meet “the survey of the industry analysts.”  You try hitting a moving target.

ü      Investors want good news. Keep an eye on the Dow Jones Industrial Average on days when there is what investors would call good news. An example would be positive earnings report from a major company. A vast majority of these days the DJIA goes up.

ü      Stock brokers make their money when you buy. Seen anyone issue sell recommendation lately? Seen anyone issue a second sell recommendation? Every year there is at least one article about how lopsided the buy recommendations are to the sell recommendations.

 

What did I do? I grew my financial knowledge and developed my own style of investing. My theories are borrowed (if I like the person) or stolen (if I don’t like the person). I took inspiration from various other investors.  I recognized my own risk/reward level.

 

So far I’m a genius. My portfolio is up 13% in four months. Of course there is winner and a loser in the pile. I’m okay with that. It’s my call to buy, sell, and hold. I don’t have the boss standing behind be saying “The minute I laid eyes on you, I knew you were no good.”

 

Hopefully I’ll score big on my speculative play. Then I can update the blog every day!

 

I have a story for everything, the first one in free.

I have been told the following three things:

Recently by a manager at work:  “You do an excellent job effectively using stories and analogies to emphasize a point.”

Previously by friends: “Dude, you have a story for everything!”

In my past by my mother: “Would you get to the point already?”

 

So, I’m reading a small blurb in the Travel section of the Star-Ledger this week. Yankee Magazine’s 2008 Special Travel Guide has come out with its list of the top five New England Diners. Among the eateries is the Modern Diner, East Ave, Pawtucket RI.

 

Here is my story.  

 

NFL history shows the game between the New York Jets and the New England Patriots of November 28, 1993 as a final score of Jets – 6, Patriots – 3. It also shows the weather as a rainy, windy, 63 degree day.  Let me tell you the parts I remember. Fourteen years will erase only so much.

 

ü      The big weekend in Boston turning into leaving the night before because somehow no one on this trip was actually able to leave when we said we could.

ü      It was raining the night we left

ü      Leaving late because I went to “Joe’s house” instead of “Joe’s house”.

ü      Sitting in the back seat of a 1993 Ford Thunderbird with two other guys, my head on the speaker, and very loud Metallica on the radio.

ü      A fried shrimp platter at the Howard Johnson in Mystic CT (it’s raining while we are having dinner)

ü      Checking into a Days Inn in Pawtucket RI, where the key didn’t open the door to the room and the security guard had to let us in whenever we left the room.

ü      A lot of keys on the security guard’s key ring.

ü      The bars in Rhode Island closing before we checked into the room.

ü      Playing touch football in the hotel parking lot the next morning (still raining).

ü      Going for breakfast at the Modern Dinner. The greatest breakfast I ever had in my life.

ü      Arriving in the parking lot at Foxboro Stadium (still raining).

ü      The kickoff, when the rain suddenly morphed into freezing monsoon.

ü      Two field goals.

ü      My big winter coat I wore in preparation of the 30 degree snow storm that should have arrived in New England that day

ü      My water logged “Michelin Man” winter coat when the game was over.

ü      The waterfalls on the stairs and lakes in the concourses in the stadium

ü      Going back to the car when the 3^rd quarter was over.

ü      “Don’t get the inside of the car wet!”

ü      The rain stopping as soon as we pulled out of the parking lot.

ü      Making the trip home from the game in about two hours because the driver had a date that Sunday night.

 

You might think I didn’t like that trip. It’s more memorable to me than other trips and is discussed quite frequently among the attendees. Every time I’m out in a storm I’ll say “I haven’t seen a storm like this since my trek into hostile Patriots territory in 1993”.

 

Here is my free piece of philosophy from this story:  if you can take one lesson out of an adventure, it was an adventure worth having.

 

The next piece of philosophy will cost you fifty cents. I’ve got hosting charges to pay.