A stock you have to buy now for 2009

[SBR_John]

USO $28.90 premarket
The investment seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil.

This is basically a tracking stock that tracks oil by the barrel. Oil today is just under $38. I think you can load up the truck at these prices.

[pico]

thinking about the same thing, john. opec will be pissed at USA for helping isareal commiting genocide, so i think oil price will go up

[Boner_18]

I like the play but wouldn't bet the farm on it. OPEC production cuts have been shown to have little effect on DEMAND which remains at an all time low. With the auto makers feeling the pressure to build more efficient cars and the bad taste of $140 oil still lingering the black stuff could be the last item to catch up.

China is predicting negative GDP growth and with the rest of the world recovering from a serious downturn the last thing one should bet the farm on is a growth, and demand dependent commodity. I see all the commodities slow to recover in '09.

My oil play is on oil production and exploration companies that have been severely beaten down. They have all the upside of an oil tracker, they pay a yield, have capital assets, have forward contracts, and are going to be increasingly relied on to establish independent energy regimes. In this order, NE, RIG, HERO.

[SBR_John]

Good post Boner. I agree demand will soften but at $37 that is way more than just priced in. You have to go a long way back to find a year when oil averaged $37. In 09 I would predict a crude oil trading range of $33 to $58. That range prices in a rather severe cut in demand. I dont believe OPEC actually cuts anything or increases. Its a lot more complicated. When prices drop I believe they actually pump more while they say they are cutting.

[Boner_18]

Fair enough. I like the upper bound of your range but I see more discounting that needs to be priced in, I see it going as low as $25 (I know I'm crazy). And you are right about OPEC, it is simply an agreement to restrict the release of crude to the market. The countries all continue to produce.

[RageWizard]

Hey SBR John,

I have been on vacation for the last week or so, so I haven't really been following the markets lately. I did however just check out the chart for this stock, and I will dis-agree in the short term (like until the begining of the year or until the end of January), but in the long run, I think you have a winner. Even today, volume is up above the average volume for the year, that is very significant on a day where very light trading is occuring. I would still wait to buy until it broke through the 50 day moving average, which right now is around $41. If you can take some short term pain, it may work out for you in the short run as well, you know how a middle east conflict can upset the oil markets and they can turn on a dime.

[fiveteamer]

Go long on oil if you want to be rich, this is big buying opportunity.

[RageWizard]

I'm really not that high on oil itself, but I like the oil services, and gold mining stocks for the foreseable future. Actually, the market is due for a pullback in the near future. The S&P 500 is right at the 50 day moving average, which is a level that people like myself will come in and short heavily. Remember the market hasn't been significantly above the 50 day moving average for about 6 months. I would wait for a pullback sometime in January before I would invest in anything long term.

[SlickFazzer]

I'm gonna start a position in Transocean (RIG). Like it under 50.

[SBR_John]

http://finance.yahoo.com/q?s=USO

Good start.

[HedgeHog]

Buy more Walmart. This Recession/Depression is getting worse.