Who would’ve guessed that King Dollars would rise 30% vs the euro in just one year? Who would’ve guessed that oil would keep going lower, after a 60% decline? Gentlemen, we are in a different market now, one that is adjusting to a new paradigm of cheap oil and strong King Dollars.
On the surface, this spells doom for oil and gas companies, as well as all of those bozo companies who prided themselves on international growth. To be domestic, depending on fuel to run your business, is now a net positive.
Fuck The Habit; but this is very boolish for any restaurant play, or companies who deliver things. FDX, UPS, DPZ, PZZA and GRUB come to mind. Small companies, like air freight plays, rails who do not deliver crude, airlines who aren’t hedged, automobile companies with favorable forex dynamics (FCAU!) and rubber for the win too.
Nevertheless, a fresh move lower in crude, coupled with a continued move higher in the dollar, will eventually jar markets and result in lower prices. At 15% cash, long quality free cash flow generating machines, I am in a good spot to defend my 13% year to date returns. If you aren’t cash heavy, still long oil and other high beta names, I strongly advise you to play a little defense until the oil barrels and king dollars stabilize.
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Are you still long $SLCA? I have a small position at an average cost of $24, so I figure I can afford to hold a little longer. Is this horribly wrong?
I sold much of it two weeks ago
On Feb 27th you were very bullish on black gold, what happened?
The geopolitick news over the weekend is straight fuckery. Form a new IMF pay the price. 2015 is looking more and more ‘The year of the Shakeout’. Pulling in horns and hibernating makes sense until Granny goes full dementia with new QE or the Chinaman steps up with ‘Opium for the Markets.
Seems like TA will continue to benefit. The chart looks a little extended, until you pull back 10yrs… With approx 8 trips to El Paso already, I’ve been a regular patron of the TA in Las Cruces, NM this year. Their bathrooms are exceptionally clean, and all dispensers & faucets are automatic. Auntie Buccs insists this be where we stop.
MUSA too
UncleBuccs – If you haven’t try La Posta in Mesilla (Las Cruces basically), great restaurant.
Wouldn’t a strong dollar also play into OA’s prediction of the Russell 2k going higher? Aren’t these mostly domestic companies?
2000 companies is a lot.
https://www.youtube.com/watch?v=CMNry4PE93Y
is that Rob Lowe, Uncle Sam in the graphic?
Pyro – thank you. I’m writing this one down.
oh and should have mentioned, if you ever stay overnight in L.Cruces the Hotel Encanto is pretty nice.