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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: sixty2nds who wrote (8779)	9/14/2024 6:13:13 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 10695

Thanks. I appreciate the info. But I am simple man. When the price of a commodity (or any open auction item) falls, I see it as evidence of more supply than demand. So Josh may claim that Iran won't be able to produce more oil than it already has or some country has less reserve than everyone thought. But I don't buy the idea that demand is rising while supply is falling and yet the price is dropping. Josh (and I think Eric too) have been claiming that it's all "paper oil" glut and no real glut. But I just don't buy that argument. Yes, as a blip you could have forced deleveraging or something moving the prices one way or another. But it can't last for months. The only time I am willing to buy a falling commodity is when its price is below cost of production. Invariably, every commodity dips below its cost of production. When that happens, it's always worth taking a chance on that commodity. For oil, that price is in the mid to low 50s. Barring that, I certainly see value in oil companies. But not enough to dive in head first. Just look at Occidental and how so many oil bulls tripped over themselves when news of Buffett buying came out. The Oxy story demonstrates the importance of timing and time frame and how something can go from cheap to even cheaper and greater value. I am researching oil companies and will buy them when one of 2 things happens: (1) they hit historic deep value, Or (2) The prices stabilize (and hopefully turn around). Just my 2 cents