too much capital stuck in USD cash. which idle capital. as far as i'm concern, these gov'ts will kep interest rates at 1% until the economies improves or pump up cash into the economy and get som inflation just to get the economy going if they are force to. so two years of 1% on cash basically cash can be making nothing in interest. that is what you call unproductive capital when you no returns on capital. right now the US has 1 trillion in defict, 1 TRILLION deficit.....that new money will be circulating in the economy.
This kind of disagreement is what makes a market.. simple as that. It's very nice to see a thread with disagreements that are civil, hopefully it can be kept that way so we can evaluate and possibly help each other without the useless bickering.
I read this line and didn't read any farther. If you had been to a developing country, you would know that we are at least 50 years away from fossil fuels being 'banned'. They won't be banned in America for 30 years, much less Mumbai. Even that's a stretch. Cars will be running off of propane for the next 50 years at least. Having said that, I am not yet biting on the long side of oil.
I hope it goes well for you. I have been shorting the USO puts myself in the thought that oil may not go higher soon but that its starting to hit the floor. Bob
It doesn't matter how cheap it is. It can always get cheaper. The trend is your friend, until it ends. I just talked a friend out of putting $50k into USO yesterday. It went down 9.5 % today! I know so many people who are bottom-fishing USO right now, figuring that it has to be near a bottom and is going back to $75-100 again in the next few years. They don't realize that oil never got above $45/barrel until 2000 and that with our economic turmoil, it could stay less than that for some time. I will definitely buy oil eventually, but not until the commercials are long according to the COT report and not until it starts making higher highs and higher lows. USO may also have it's own problems: http://ftalphaville.ft.com/blog/2009/02/25/52879/a-self-propelled-pyramid/
When I did used to trade stocks and ETFs I would use PnF charting to analyze the security and to determine my potential price targets. Looking over your selection here: USO is a downtrend and currently in O's (selling) with a price objective of 15 and resistance is at 64. RSX is in a downtrend, currently in O's (selling) and has a price objective of 4.5 and resistance is at 35. XHB is in a downtrend, currently in O's (selling) and had a price objective of 9.0 (which has been met) and resistance is at 12.5. I hope you're ready to scale into your trades, AND hold them for the medium-to-longterm.
I respect many of the responses in the thread thus far, but all of you are looking at this from a traders mindset and living by the rules of trading which is terrific but catching a falling knife is what is done when seeking extreme value, and also this is a very SMALL portion of my portfolio and I am fully prepared for these securities to fall by another 30-50% and I will buy more but I will never let these investments become more than 13% of my overall portfolio, my bread and butter is still very much intraday.
In your friends case it sonds like he was throwing $50k on red and hoping for a lucky roll, and his real luck was that he had you there to talk him out of it. Whereas the OP has already told us that these ETFs represent an extremely small (almost negligible) part of his portfolio and he is ready to hold on to them for a few months (at least). Completely different situations, you're comparing apples to oranges.
Correct, it's an extremely small part of my portfolio (the % will likely grow if the downtrend really does continue and I leg in a bit more) and I'm willing and able to hold for years although I expect a bounce in which I can sell into.
Feel like I've seen several of these posts each month since October. Maybe the ~11th post is the charm? Bottom fishing is an interesting sport to watch, but never understood the fascination in blind anticipation of bear market bottoms and bull market tops. You do realize the indices just made the next leg down into open air? Good luck, you will need it. "The market can often remain irrational longer than one can remain solvent."