Nothing wrong with investment right now, what was the saying buy when others are fearful, sell when others are greedy etc.. but those are bad choices. 1) USO is ok at current valuation, despite the major push for renewable energy most industrial operations still require oil. Once things pickup, it is guaranteed to bounce off the current level. In addition, it's a good hedge against the onslaught dollar inflation, as many are predicting (with good reason) that's coming. 2) RSX, not sure exactly what you are smoking here... buying into russia? Do you know what is happening in russia right now..... 3) XHB, again not a good choice in term of risk/reward. Real estate market is not stock market, it has long memories, i dont expect the country to start building real estate again any time soon even after economy starts to pickup. 1) Still tons supply 2) everyone has a memory of what happened, real estate is not the stock market 3) It will most likely be dead money, just not worth the risk/reward. ---------------------- Here's some of the ones i am buying in additional to oil: DBB: mines closing all over, base metal is a core supply for the economic turnaround, current valuation. DBA: same deal as dbb, not so much dependent on economic turnaround but it is a core staple. PBW: pretty clear clean energy will the huge, but as with any emerging technology, it is complete chaos - many companies will go under, some will become market leaders. Way too early to tell, so you better off investing in the index. Current valuation is a gift. NVDA/INTC: both solid companies with complete market dominance, and an almost impossible entry barrier. CAT: solid company that will benefit the most once the turnaround happen. But i am still waiting, $20+ is still a bit too risky for me. ----------------- HIGH RISK PLAYS: below are the ones i fully expect to go bankrupt but with a good chance they might make a lot of money too. ETFC: penny stock now, but market leader with excellent product, core business profitable, excellent management. Bottomline, needs to work through the toxic shit on its balance sheet before going bust. DRYS: needs to not run out of cash before shipping tuns around. AUTH: excellent balance sheet, strong technology geared towards future growths (fingerprint security on cellphones, laptop, etc..) FEED: pig farm of china
I hope everyone is aware of the effects of contango on the USO and the fact that moves in crude oil may not result in commensurate moves in USO, as USO is only invested in the front month and negative roll yield robs the instrument of return as long as contango is in effect. http://www.marketfolly.com/2009/01/how-contango-affects-crude-oil-etfs-and.html
USO isn't too bad but you should have waited for oil to test recent lows atleast. You are very premature. RSX....Russia? I don't think this is a good idea at all....but I am no expert on russia. Way too much uncertainty in their economy and so much corruption. XHB...terrible investment. There isn't going to be much home building going on for quite a while. Many in this etf will be filing for bankruptcy dragging down this etf. You should be Short homebuilders not long.
Agree on oil, think you're rather early on homebuilders and quite insane if you think Russia is a good buy. We could be looking at another default in Russia, so I wouldn't touch RSX with a ten foot pole.
As a native russian (living in canada though) I would NOT recommend buying into russia. There are many reasons but the simplest is VALUE of anything russian = VALUE OF OIL. Period. So USO is the same story with much less political and other risk. ERX - good triple ETF for energy. I would prefer that. Hope it helps
For all of you that are saying Russia or Oil or the Homebuilders are terrible investments, every single reason you cited is priced into these instruments which are down at least 70% from their highs, we all know the horrific problems in Russia, the extreme pressure homebuilders face and the contango in the USO... many of you are struggling to disconnect your trading mentality with any sort of longer term view, which is totally understandable.
Having said everything I already said, with futures getting a nice bounce tonight, if I'm up some money in the morning I will probably trim my positions to only 2% of my portfolio as my mentality is refined as a tick by tick trader, my personality is not suited for longer term investing, but these prices are way too good to pass up.
I totally agree with you in a sense of buying when fear dominates. But my point is just delete russia from you buying list and stick with oil instead. It's virtually the SAME THING
I agree, and if there is somewhat of a bounce tomorrow then I will be selling the majority of my RSX holdings which will reduce my longer term exposure. Russia is my smallest holding by far as it is.