Help; People into oil (no KOM not that type).

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Is there any way to play oil as a commodity investment? Is there any ways to play as a Mutual Fund an aggresive investor in oil not just the big oil company and drillers? Is the only way to play a possible oil shortage the futures and options markets? How far out might coincide with y2k problems?

Thanks.

-- squid (itsdark@down.here), November 06, 1999

Answers

There are many ways to play. None that are safe for someone like yourself. Sorry, no insult meant, but rolling into the most turbulent high risk environment for this commodity (with the exception of the Gulf War perhaps) is not for the faint of heart.

My guess is that once the trading gets interesting, only those with the biggest of balls will show up at the table. Thus far, I haven't seen it. Minor rumblings but no clear battle lines drawn yet. But make no mistake, this game will only be played by those with DEEP pockets and LARGE interests. Try getting in the way of BPAmoco these days and you will get hurt financially. Maybe wiped out.

Those boys don't play. You're welcome to take a shot at oil stocks, but my guess would be you'll be shooting darts their as well.

Buy some food, guns and water. Learn to use them. You don't have much time.

-- Gordon (g_gecko_69@hotmail.com), November 06, 1999.


Mr. Squigley,

Gordo should be along anytime now. He is probably your best advisor-----although those thinking about capitalizing on the obvious potential debacle that oil should be in a couple months or less along with the gossip that brokers are broke and then their is the currency thingy. Man o Man you must have some disposable income to be thinking about oil futures and Options at this time.

As you read this you recognize it is an opinion. The scenario could exist where something happens to a Single entity and usually the entire market will react to that, which would create a huge windfall---if you can collect the money from the broker!!

-- D.B. (dciinc@aol.com), November 06, 1999.


I don't agree. Go for it squid! The market isn't reflecting rollover risks. But Gordon's right. There aren't any easy lay ups. Its gonna be a roller coaster.

Just as important than learning about futures markets is gauging your own constitution. If you're gonna trade in the dycotomy of fear/greed you won't succeed.

-- Downstreamer (downstream@bigfoot.com), November 06, 1999.


Hey Squid, If you think the market is going down, Why not sell short the S&P 500 futures? There is a Mutual fund wherein you can do it. It is called ProFunds Ultra Bear. Just type ProFunds in the search box. Be sure to get the Bear, not the Bull. If you get on the wrong side of the market you can loose big time.

-- Earl (earl.shuholm@worldnet.att.net), November 06, 1999.

Nick Guarino, in his latest "Wall Street Underground Newsletter" states ----- "In this modern world, Big Oil is the only industry that has the luxury of selling its product at three times cost. But oil giants can have all the consolidation they want. OPEC can make all its supply-fixing agreements. With so much oil spread out over the planet, and so many desperate sellers, oil prices cannot stay at this level. A more realistic price for oil is $10 a barrel."

-- thinkIcan (thinkIcan@make.it), November 06, 1999.


Every conceivable play in the market-- mutual funds, stocks, pref. stocks, warrants, put options, call options, (or any combination thereof) have only one result: the player is holding someone else's liability.

If you are comfortable with this, let the good times roll.

-- Tom Carey (tomcarey@mindspring.com), November 06, 1999.


Thanks for the responses. For Gordon's concern about running against BPAmocco, I understand the problems with playing against the big money. But being small is more about being nimble and running with the big boys and letting them squeeze every last penny out.

The stock market is a possible play but again, like gold, you have many interests with big pockets (feds have our collective pockets) on both sides of the debate. There is a real possibility of the major indexes topping back at the previous highs before the turn down. The commodities at some point have a physical entity that in shortage can't be created by serious wishing and hand waving.

A play in anticipation of possible oil disruptions (or concerns there of) is not excluding the market plays.

It is understood by all that investing with play money is serious business with a risk of loss. My thinking with my smaller than normal brain is that a portion of my assets are not liquid and are not going to become liquid. If a Milne 10 hits the concerns become a lot closer to home than paper losses and profits in markets. If there is a medium disruption including a severe depression money was lost and money was made going up and Coming back down.

The thing I see at the pump is when there is a problem the price goes up the oil that was drilled, refined and purchased (monthes, weeks) ago. They seem to make theirs regardless. If there is a shortage with overseas producers couldn't that benefit domestic producers that stopped producing due the uneconomical price of a barrel???? In such a scenario who might these players be?

Best of luck to us all,

-- squid (Itsdark@down.here), November 07, 1999.


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