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First off, I’m bullish on gold but I expected a short term pullback because of the Jim Cramer theory. But my big “I told you so” was my oil forecast, it wasn’t really a forecast just me being skeptic with thin arguments :). I got really happy when common sense ( is that even possible ? ) finally got priced in. I became extremely bearish on oil when it passed $100 a barrel. Well to be frank, it was a particular oil analyst who wrote an interesting article why oil will return to the low 50s/60s that made me more secure that oil was overpriced ( I won’t link because the article is in swedish ).

In the 90s tech was the real deal then real estate 2000-2005. What’s next? According to “energy experts” oil will skyrocket in the very near future. According  to some economists peak oil will happen latter then projected because of the “market”. Here’s a good article about the communication between scientists and economists http://www.econbrowser.com/archives/2005/07/how_to_talk_to.html .

I’m going to buy shares in a russian oil company next week ( I will write about it later ) so I’m really hoping the scientists are right on this one. I like the phrase “extremely valuable in the future” in the above artice

Please note: I’m not buying shares of this particular company because of oil price projections, I’m buying it because of the company.

The average P/E of publicly traded russian oil companies is close to 2. That’s how much respects the market gives. No fundamental or technical analysis works in this market turbulence. I wrote earlier in my blog that I was bearish on oil when it was well above $110 per barrel. I’m still bearish to be honest, I can imagine oil going all the way down to $50-60 per barrel. However the russian oil industry is so low valued that a big drop in oil price is already baked in the stocks.

My two cents on the cheap russian oil:
The market is afraid of the Russian government, that’s why we see a fat discount. The market also anticipates that oil will decline to the low 50s. However, a P/E of 2 offers too big of a risk premium.
Yes I do agree to some degree that russian oil companies deserved the significant drop BUT some of it was an overreaction, better yet the majority of the drop was an overreaction. It’s getting hard for my nerves not to buy russian oil stocks.

Oil is falling and the dollar is on the rise. I’m not going to say “I told you so yet”, I’m going to wait until oil really becomes cheap. Good times are ahead. Oil is still far from its real value. There is a fat premium because of the market speculaton. In my opinion the oil crisis is way overblown, when the real drop comes, it’s going to be a dramatic one!

You regular readers of my blog might remember when I kinda got scared of gold because Cramer was bullish on gold. My advice is to do the opposite of what Cramer does. If gold keeps falling ( currently $800 ) , and we see $600-700 an ounce, my theory might be proven to be an effective way to earn money in the stock market. The thing is that I’m actually bullish on gold, but I’m bearish on Cramer.

So what should I do?

Talk about a good time to start promoting oil and gold when they have already rallied the last five years. It’s almost like the media decides to pump things up just before the big fall come. I myself have some money already invested in gold and I’m scared of the media’s bullish views on gold. That’s usually a sign to get your money out as fast as possible.

I have encountered this type problem before. I was not so long ago bullish about a stock but then when Jim Cramer got bullish, I immediately got bearish. No stock that comes from the mainstream is going to make you wealthy!

Remember that George Soros stated that we were in a growth phase of a bubble, I wonder where we are now…

It sounds scary… OMX halted today because of technical errors, the damages are minimal though. When electricity and technology crashes you better have some gold coins stashed.

If we would ever face a global computer crash, what would really matter? Paper money would be worthless ( like the current dollar ). Would gold and silver make a comeback? You bet yah.No matter what the central banks says, GOLD IS MONEY!

Obama has been under pressure, because of the statements of his pastor.

So what will happen if Obama wins? Since I’m bullish on gold/silver, I hope he doesn’t strengthen paper money.

His private invesments : SkyTerra Communication and AVI Biopharma has amounted to a huge negative return. If he keeps it up all the way to the White House I see no problems with investing in precious commodities.

I personally stopped believing in democracy anyway. Whatever plan the government has is going to happen with any president. If they are going to destroy the US $ and create a North American Union with a new curreny, they are going to do it anyway.

I have to say, I’ve heard alot from both sides. The oil bulls harass anyone that critize and call it a bubble ready to burst. It reminds me a bit when the IT bubble was going on, all the bears were laughed at for saying “I’m not buying a company with a P/E of 100x”.

So how valuable is oil? Well we don’t really know the facts, I for one don’t believe the official statistics. I think there is alot of oil that is hidden by owners. Even if there’s alot of unknown oil reserves that the public hasn’t heard of, the dollar is still crap, and oil trades under the all mighty US $. If we forgot the oil rise which comes from the devaluating dollar, and just focus on the oil bull/bear factors for a sec:

1. Reached Peak Oil? According to mainstream media

2. We don’t really know the facts, there can be alot more oil than we know of. It wouldn’t be the first time oil is manipulated.

3. Demand is growing, China and India are becoming the most serious market players in the world.

4. Transporation is getting more energy effecient. Cars don’t waste as much as they used to. Alternative energy sources might have a break through.

4. The really big boys cash in on a rising oil price, they can manouver a theatre forever.

5. The fundamentals? The price isn’t really decided by supply and demand, the recent rise is speculation.

6. With all the above factors we don’t have a in-between case. We have a very sharp rise in oil price or a very sharp drop in oil price. It’s either $50 or $200-300 not anything between $100-$150!

I think it’s impossible to review the facts and make a skilled guess, it’s a coin flip.

The year was 2007, I bought GLD, a ETF that follows the gold price. I paid indirectly $630 per ounce I sold later on for $670 an ounce. Not that I changed my mind about gold, I just needed cash back then. Here’s to my point:

$630-$670 <- I was in and out

$700 + <- media starts to hype

$900-1000 <- Jim Cramer really starts to hype about gold, major networks follow his steeps.

$850 <- current price, a pullback since the Cramer hype.

The thing is I’m considering buying into gold again. I don’t want to buy anything that Jim Cramer likes though. It’s going to be hard for me to set my attitude towards Cramer aside.