Flight to quality = buy crude oil

[detective]

Quote from Cutten:


The best crisis hedge is a diversified anti-dollar portfolio - outrights and calls on EUR, SFR, JPY, AUD, CAD and gold. Oil has too many other variables to be a reliable dollar hedge.

We are in a global marketplace. In times of crisis, for example in the US, the governments of the foreign countries will not stand aside and let their currencies strengthen to historic levels when that would jeopardize their export industries. The Europeans and Japanese heavily rely on exports, a further strengthening of their currencies is not in their best interest.

I have never been a fan of holding currencies as a hedge against a devaluing dollar. The other nations' currencies will also be devalued like all fiat currencies have throughout history, that is what governments do when they have access to the printing presses.
Gold is an ok hedge, but its value is really symbolic more than real.

Really, the best asset against a devaluing dollar are commodities. It is no coincidence that they are the best performing asset class.

 

[Mercor]

Quote from scriabinop23:

You're absolutely wrong. Subprime ABX BBB tranches are the best hedge, especially when purchased at AAA prices.

They may be a good investment, but what currency do they pay in?
In a world where paper money collapses this is more paper.

 

[S2007S]

Quote from Landis82:

So why are you still LONG the UYG ( financials ) as it drops another 5% to $17.60 ?

The UYG has been cut in HALF since May 1st.
Did you not purchase the UYG back in May at $29.00 ?
But you just love trying to pick tops and bottoms, don't you?

Ever heard that the TREND IS YOUR FRIEND?

Sold SOME of that UYG position today around $24.00 at a profit, what do you know averaging in paid off again, 1st DUG now UYG......

I did average in as usual and it worked out yet again....

 

[kickboxers]

the money made in in oil is trading oil and finding oil..owning oil as an asset sucks

Quote from detective:

It is official. In periods of crisis, people used to flock to the dollar, to Treasuries, a bastion of safety. No longer. Not with the imminent Fed bailout $5 trillion bailout of Fannie and Freddie.

The dollar is confetti, adding $5 trillion in debt to the national debt just poisons the value of the dollar. Euros aren't worthy either, they will devalue in lockstep to keep from killing their export based industries. The best store of value is crude oil. Its an asset that can't be printed to bailout dumb financial institutions and can't be diluted. It is the real deal. Crude oil has replaced gold because gold is a luxury item, in times of distress, luxury takes a back seat to basic needs like energy. Crude oil is king. All hail to the king!

 

[Landis82]

Quote from S2007S:

I did average in as usual and it worked out yet again...

Yawn.

 

[KINGOFSHORTS]

Americans flock to oil, Arabs flocking to GE

 

[makloda]

Quote from S2007S:I did average in as usual and it worked out yet again....

50% drawdown and you end up closing it with a 2% profit after sweating bullets. Awesome trade, as always. Keep it up!

 

[detective]

Quote from kickboxers:

the money made in in oil is trading oil and finding oil..owning oil as an asset sucks

I don't understand, why does owning oil suck if the price keeps going up? Is there a law that states that oil can't keep going higher? We have oil going down for the past several days and now all the oil bears are out of hibernation acting like it was just one big bubble that's burst.

At current prices, oil is a much better investment than US equities, IMHO. I did think oil acted toppy a couple of weeks ago, and there has been the pullback, but its not the start of a bear market. Not unless China and India stop making cars.

 

[oraclewizard77]

CEO at $ 80 oil is supposed to be worth $ 185/sh. Since oil is over $ 100 and if if China floats their currency, you are looking at a $ 200/sh stock.

I bought it today around the low's of $ 152/sh. So you get a free pick from me.

I will try to post back here when its at $ 185/sh.