I just read that Cramer went wildly bullish on oil and oil stocks on Friday's show. This is what I read he said: Is this true? Because if it is, man does it ever make me nervous. I cut back my energy exposure on Friday but I still have quite a bit. Anyone watch the show and care to comment? btw its funny how he compares oil to milk and then misses that they are totally similar on the basis he sets out (they're both capital intensive, require multiple processing and packaging stages, and when transporting must be handled with care - refrigerated, hygene, etc.) He truly is the greatest fade of all time!
Steve Forbes, not a favorite of mine, made the case this morning on CNBC for the speculative bubble in crude. It's a persuasive case. I say that for my own reasons, having spent some years reporting legal and regulatory news in that business. Cramer's riff may be more proof of a bubble, although that would be only the second call of his that I've paid attention to for any reason. The first, which was his call that the Texas verdict made Merck a gift to shorts at 29.00, did not hold up in the short term. Does the guy have a track record providing any reason at all to follow, rather than fade, his calls?
Steve Forbes contradicts oil price claim in latest investor newsletter 1st Sep 05 Greens Senator Kerry Nettle today accused Steve Forbes, host of the CEO conference at the Opera House, of playing deceptive games with the Australian public over oil price claims. Steve Forbes told the Prime Minister and media on Tuesday that oil prices will come back down to around $35 a barrel within a year, and that high prices are a speculation 'bubble'. Overnight his investor newsletter has advised the opposite. The subscriber only Forbes Professional Timing Service states: "THE MOST IMPORTANT ADVICE I HAVE GIVEN IN 20 YEARS" "expect to see crude move to $65.00 this summer and to $76.00 by early next year." "..the so-called terror premium in crude prices - which will remain until we see at least three years of peace in the fertile crescent". And, "We are at the point where the rubber hits the road, and the only rationing mechanism for whomever gets the available supply will be higher prices." "What is Mr Forbes up to? It appears he is telling the Australian public and decision makers not to taking the spike in oil prices seriously, whilst telling his investors that the spike is a great profit making opportunity," Senator Nettle said. "Mr Forbes public comments appear to be about discouraging steps to address the coming peak oil crisis, a crisis he admits as real to his investors. "Steve Forbes is treating Australians with contempt. He should apologise for his deliberate deception. "Australians should be worried if the Prime Minister is taking advice from the likes of Steve Forbes on an issue as vital as the looming energy crisis. This embarrassing incident underlines the untrustworthiness of Mr Forbes' advice. "The Prime Minister should be listening to those who advocate investment in renewable energy and energy conservation measures which are in the long term interests of this country." Contact â Jon Edwards 0428 213 146 EXCERPT FROM FORBES NEWSLETTERS PROFESSIONAL TIMING SERVICE OVERLEAF⦠1 September 2005 12:28:37 AM FORBES NEWSLETTERS PROFESSIONAL TIMING SERVICE THE MOST IMPORTANT ADVICE I HAVE GIVEN IN 20 YEARS There are four major opportunities concerning crude oil, gold, stocks, and bonds that will make and break millionaires during the next 24 months. First: Too late to buy oil? Not on your life! A couple of years ago when oil was trading at $16.00 to $20.00 a barrel, I pointed out the ground floor investment opportunity developing in oil. We openly recommended Enerplus Resources (ERF-NYSE) in our publications. It was trading at $17.00 or less then and was paying a dividend of about 1.25% - MONTHLY. That amounted to 15% a year. After a brief correction this spring, crude oil is once again trading solidly over $55.00 a barrel. Enerplus is trading over $35.00, a dynamic double from our original recommendation. It is too late to chase Enerplus, and there are better buys out there that are yet to be discovered by the Street. I will tell you about one presently, but first ... Opportunity #1 â An exceptional second chance to buy energy stocks. The first of four major opportunities you will encounter this summer - which is also the biggest money making opportunity I have seen since crude oil was $20.00 - is to take advantage of the recent correction in the energy sector and buy some energy stocks. You may be skeptical about this - as investors were when we told them to "mortgage the house and buy stocks" in the spring of 1982. Nevertheless, here it is. Oil and natural gas are on their way to significantly higher levels. I expect to see crude move to $65.00 this summer and to $76.00 by early next year. However, you can still buy select oil and gas producers that pay 11% to 15% dividends - and they pay monthly. It doesn't get better than that. There are many reasons to invest now in oil and gas. Unrest in the Middle East and the so-called terror premium in crude prices - which will remain until we see at least three years of peace in the fertile crescent - are two reasons. I think that will be a long time coming. Now, Iran (a major world supplier) is making the news as a safe haven for terrorists as well as a nuclear threat. Venezuela (the fourth largest supplier of U.S. crude oil) is becoming our avowed enemy. There is renewed strife in Nigeria. The lionâs share of the worldâs crude is being produced from wells far beyond their prime, and some sources estimate that for every 2 to 4 barrels a day consumed, only 1 new barrel is being brought on line. There is a major shortfall between supply and demand, and this shortfall is growing on a monthly basis. World demand increased 2.5 million barrels a day over the last year due to increased demand in the U.S. and Asia. India and China are industrializing at a feverish pace, and their energy appetite is increasing exponentially. China is aggressively expanding their infrastructure and their military, and they are developing an enormous strategic oil reserve that will be much bigger than ours. Mushrooming global consumption will easily be 86 MBD or more by the end of this year. On the other hand, global production is very close to a peak, and there is no longer any near term "excess" production capacity left. Knowledgeable sources estimate that world production will never â thatâs NEVER - exceed 90 million barrels a day (MBD). With one exception - which we discuss in our updated special report Oil - Slam Dunk Investing For Income And Capital Gains â Updated - alternative energy of any import is years in the future. We are at the point where the rubber hits the road, and the only rationing mechanism for whomever gets the available supply will be higher prices.
Last two posts are very enlightening and interesting -- first post providing history of Cramer's touts and second on Forbes' bona fides, or lack thereof, on crude oil.