Sunday, September 6, 2015

Trading OIL



In 2015, I have been lucky in trading oil. Here is my summary as of 9/4/2015, the day I am writing this summary. The ETF is OIL. It could be my luck, my insight or most likely a combination. Even if I lose, it is not a big deal as I do not expect all my themes work.
Buy Date
Sold Date
Return
Annualized
03/17/15
06/02/15
32%
154%
03/16/15
05/15/15
29%
180%




08/24/15
N/A
23%
757%
08/24/15
N/A
25%
815%





Annualized returns are used for comparison. When the holding periods are less than a month, they have no meaning. “N/A” indicates I am still holding the stock.
As of 9/8/2015, YTD return of OIL is about -27%. Hence, market timing on OIL is more important as it fluctuates quite a lot.
The $40 of OIL must be close to its bottom. It would take at least $60 to produce a barrel of oil. If it goes down further as predicted by many experts with supply from Iran to the world market, then they deserve to be called experts and I will buy more.
I can tell you it will come back to the $60 range as a simple case of supply and demand but I cannot pin point when. There will be less drilling / explorations. Some companies will be out of business if the oil price stays in the $40 range. The supply will be reduced in the future. The Middle East countries will find it is a stupid strategy by dumping oil to bankrupt the shale oil producers. The recovering economies and the growing population will guarantee demand. I recommended folks to buy oil when it was $30 (higher at today’s dollar) at the time. It went down further but shot up back to $120. 

----My books related to the topic. Click the links for more information.
The Themes in Investing. More info on my trading experiences and the techniques behind.
Profit from 2016 Market Crash. How to prepare and why the market is risky.  
The Art of Investing. Kindle version is over 700 pages (about 3 books of average size) and it covers most topics in investing.




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