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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Sweet Ol who wrote (161766)	12/27/2011 10:28:05 PM
From: Bearcatbob	Respond to of 206191

John - you would be blessed in my mind if you would take that on. Who else thinks it would be a good idea? I am not sure I could bear to look at my guess if it is bad - I would have to sell out tomorrow. Bob

To: Sweet Ol who wrote (161766)	12/27/2011 11:34:04 PM
From: upanddown	2 Recommendations Respond to of 206191

Commodities, including POO, are highly correlated to the markets. So, the Dow is a measure of what is going to happen to energy. Even worse, the energy companies are really highly correlated to the stock markets. John, they are correlated now but that has not always been true. In the early 2000's, energy prices and stocks were inversely correlated to the general market. That is why many of us here who were concentrated in energy issues beat the crap out of market indexes during the dot-com bust in 2000-2002. The conventional wisdom at the time was that higher energy prices reduced discretionary income and raised business costs. It is really only since the 2008 crash and the subsequent recovery that energy has been tightly correlated with the general market. Now the conventional wisdom seems to be that higher energy prices are an indicator of improved economic activity. We can be certain that ,sooner or later, energy prices will decouple from the general market trend. When that will happen is the question but higher energy prices do reduce discretionary income and do raise business costs.