What can Kill the Oil and Gold Bull?

Discussion in 'Commodity Futures' started by chewbacca, Jul 13, 2006.

  1. Regime change in Iran and Syria would do the trick.

    #11     Jul 13, 2006

  2. Disagree - then more Nigerian pipelines would be attacked, and Mr. Chavez from Venezuela would find a way to conspire.

    The only way out of this one is a comfortable and substantial drop in demand (even though supply limitations aren't out there yet), enough to make the markets feel invulnerable to outside stimulus. And the only way for that to happen is a substantial change in political policy and a long drawn out global economic recession.
    #12     Jul 13, 2006
  3. I dont know how realiable by just looking at the number of long/short for commercials, and non-commercials. It is very common for hedge fund to do a swap with commercials to avoid the position limit.
    #13     Jul 13, 2006
  4. can you explains this process? I'm curious specifically how it works.
    #14     Jul 13, 2006
  5. All I know is that there's about $30 of speculation in the price of oil because of this and that bs and it pi$$es me off. That said, as a stock trader, I still don't get the price of a stock being 10-20 times the earnings per share. To me that's bs too. I mean who here is paid 10-20 times what they earn for their respective employers?
    #15     Jul 13, 2006
  6. heh..

    10600 employees, 40billion/year earnings.
    Each employee = $377002 in earnings for xom.

    so to buy an employee at 10x earnings for life, just like you could buy a stock for life, you will have to pay him 3.7 mil for his career. That works out to 123k/year over 30 years.

    I wonder what the average actual XOM employee salary is.
    #16     Jul 13, 2006
  7. SteveD


    Oil has a real demand factor in the real world and is used for very real reasons.

    Gold is a giant scam on the very stupid and gullible. I saw a statistic that 77% of gold is used in jewelry.

    Buying gold is like buying a "dotcom" company with no income.

    #17     Jul 14, 2006
  8. SteveD


    PE's are historically based off of the bank rate:

    a 6% yield on a CD is equivalent to a 15 PE. That is what I could get if I wanted to "park" my money with NO RISK but NO UPSIDE.

    But I decide I want more than that so I invest in a company that has some growth prospects and that's where the "price discovery" comes into play. If the company earns $1.00/share I am willing to pay $20/share because next year I believe that company will earn $1.15/share. Then my share of stock will be worth $23/share based on the same PE multiple of 20.

    Greenspan refers to this as the "risk premium".

    It is all very simple actually. There are all kinds of opinions on how much to pay for what growth rate????

    #18     Jul 14, 2006
  9. Yup, you're right.
    Its an asset with a zero yield.
    Foolish to hold such an asset.
    Much better to hold a 30 year US long bond yielding 5.15%. A "risk free" investment. How could you go wrong?

    #19     Jul 14, 2006
  10. SteveD


    The entire financial world understands that the money is safe in the US.

    The only people that don't understand this are posters on Elite Trader, LOL.

    The money is placed in US assets because it will always be there.

    We have a track record dating back over 200 years.

    Spare me the silly doomsday scenarios.

    #20     Jul 14, 2006