Articles

Oil has reached a new record - $93 per barrel - despite plenty of supply. The news will tell you that it's because of geopolitical tension between the Kurds and Turkey but neither of these areas supply much oil. Traders are using that as an excuse to drive up the price of oil and make a killing.

A big headline in the Wall Street Journal today declares "Slower China Growth Suggests Peak is Past." That is as silly a headline as The World is Coming to an End. I don't know what the journalist (Andrew Batson) was drinking, but China's growth in the second quarter was 11.9% and 11.1% in the first quarter. We should all be so lucky as to have quarters like that -- including this last one. Give us a break, Andrew Batson, and start reporting responsibly.

It never ceases to amaze me how volatility plays out in the markets – how easily people forget one day only to rediscover the next. One has to believe that the market movers are all senile – that they can hold an idea in their heads at most for a day, forget it entirely the next, and then embrace it as new two days later. I am convinced that everyone buying and selling stocks these days suffers from some form of Alzheimer’s disease. The symptoms are clinically the same in the market and in the nursing home.

Not surprisingly, China’s wireless telecom carriers are growing by leaps and bounds, far more rapidly than fixed-line operators. Any country developing as rapidly as China cannot wait for the old technology. In fact, wireless telecoms are leading the way for huge economic development throughout Asia, the Middle East, and South America. But, in China’s case, the growth is nothing short of spectacular. Investment in China Mobile, the major wireless carrier in China, is one of the surest bets in the midst of China’s unprecedented growth. And, safer still, is to buy shares of FXI which bundles the best of China and where China Mobile is the ETF’s largest holding.

Amazon reported earnings today that showed the company is finally starting to live up to its potential. But somewhere along the way, Amazon stopped being the poster child for the Internet. The problem is that while Internet companies have PEs of 30+, retailers have PEs of 10-15. What will it be for Amazon?

As I surveyed the carnage from last week’s market drop, I tried to focus on those stocks that actually moved up. Of these, the most interesting to me are CVTX, BSX, and ISRG. I have written about the first two before, so I will be brief here.

It is hard to imagine Google going substantially further and more imaginatively than it has already. It is hard to imagine Google’s shares going much higher. But, Google is on a course that will take it to another level entirely, and its share price – as a consequence – will continue to soar. It is more than likely that we will see Google shares going for $1,000 in the next three to six months.

Municipal bonds used be a clumsy investment for most people, especially when one had to buy them individually, usually at $50K and above, from brokers. Then came mutual funds which offered portfolios and charged, with the exception of Vanguard, fairly large fees and were far from liquid. Now, the EFT phenomenon has come to municipals and it is going to be explosive.

We will never know if Caterpillar's Q3 result caused today's crash, but the stock was among the biggest Dow losers. I can't figure out why everyone is so scared.

October 19, 1987 was the real thing. Today, 20 years to the second, the markets' extreme declines are just the reaction of the children pushing buttons and the superstition of not very intelligent people. Just listen to CNBC and all the talking heads helping to push the markets even further as they join the panic. But, this will not be 1987, and Monday things will be much better after the children party and rest over the weekend.

Countrywide's stock traded very oddly today, as if someone knew something. I bet they did.

How many times have you said to yourself, why didn’t I invest in that when the opportunity was ripe? The kind of thing most of us have said about the internet in general or Google or Microsoft or Berkshire Hathaway. Looking back, with the advantage of hindsight, so many investment opportunities seem so obvious. There is one now, that many have already become wealthy from, that remains an amazingly attractive opportunity. And, it is not a discovery; it is simply one of the best and most obvious long positions one could have at this time. No surprise – it is OIL.

Regardless of whether it is a bubble, it is quite extraordinary to see these kinds of moves.

Should I stick with Canadian oil trusts?