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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (21899)	8/12/2005 5:43:25 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78704

Partially OT. At some point the high oil price is going to lead to recession or depression. Although the economy is chugging along nicely, I am getting nervous with the stock market making new highs together with oil. Even if we don't buy the Peak-Oil doom and gloom (I only do partially), there is an oil price point where the sales and profits start dropping. The old wisdom was that you sold the market at ~$2 gas and bought it back at ~$1 gas. Now, we are past the $2 mark and will close to $3 soon, which might be the new realistic selling mark (although it might be that we will never see $2 gas again). Those are rather random numbers, I don't have simple quantitative metrics, but, as I said, I am somewhat nervous. What to do though? I follow Buffett - mostly, because he has been market timing a lot recently - and don't do much. Since I don't see a lot of buying opportunities, I hold some cash I get when selling. I have some money in IGE (natural resources, mostly oil CEF). And I am still in the period of my life where monthly 401(k) contributions will continue buying the market (S&P) even as it dips. That's pretty much it. Other people may have their own methods to deal with the current situation. Just don't be surprised if we get a dip to ~1K in S&P and similar dips in other indices. Peak-oilers will tell you that the situation is much worse, but I ain't one of them. :) Somewhat cautious Jurgis