qcomer, I have laid out my predictions and my position. I took Zeal’s advice on the COP, and it bad advice, so I sold my COP, figuring I could make better returns on the inverse fund. Why now? Because I finally got around to it. It was pure luck that I didn’t buy the inverse funds this summer.
I still think that long term, oil will go up to $100, but in a recession, the demand for oil drops and so does its price. I had not considered this temporary drop in oil due to a recession, so I made a bad decision in buying COP right now. All the Zeal recommendations I followed have been duds.
We’ve got a stock market bubble today. The S&P P/E ratio has been around 14 since 1881, but in the last 25 years, has steadily risen to 45 in the .com boom, and now is still at 25. In the most productive years of our economy, from 1929 to 1982, the Dow increased 300%, but in the time of slower and stable economic growth the Dow increased 1000% in less than half that time (20 years vs. 54 years). So the price of the stocks has grown much much faster than the earnings, partially due to the inflow of foreign investment into the US. So we have a stock market bubble, a real estate bubble, a deficit bubble, etc. I am positioning myself to profit when they fall. Thankfully, there are plenty of people taking the other side of my bet, allowing me to profit handsomely.
I appreciate all the charts provided above, but they do nothing to change my mind that this rally is built on a quicksand foundation. So I am firmly in the corner with Roubini and I find myself in good company.
