tag:blogger.com,1999:blog-2986124651030959736.post5139333555364172551..comments2024-03-28T09:42:38.695-05:00Comments on Stocks, Bonds & Politics: Relative Value and Absolute Discounts in CEFs/Added 100 of the CEF GGN at 18.84/WMT and the Large Cap Valuation StrategyTENNINDEPENDENThttp://www.blogger.com/profile/17444227958539559639noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2986124651030959736.post-78164299791519748692011-03-09T09:11:36.967-06:002011-03-09T09:11:36.967-06:00Thanks for your informative and interesting respon...Thanks for your informative and interesting response. I'll continue to hold my natural resources fund for the reasons you outline, which neatly summarize most of my reasons for buying it in the first place. Sometimes the volatility in commodities is unsettling, but I should be used to it by now.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-74049832385923844162011-03-08T10:25:13.197-06:002011-03-08T10:25:13.197-06:00Cathie: On a daily basis, there is no absolute cor...Cathie: On a daily basis, there is no absolute correlation between the price of oil and the price movement of energy stocks.<br /><br /> There may be several reasons why the positive correlation may breakdown. Large cap energy companies have already risen in price before pulling back today and yesterday. As a stock, they can be more subject to supply and demand factors that impact the daily movement of any stock, rather than the fluctuations in the price of oil. This would include profit taking. And as a stock, they are vulnerable to the up and down mood swings of the stock market. A higher oil price might also adversely impact other operation of the large integrated companies that have large refining operations. <br /><br />Another factor is that the market may be reconsidering the recent run up in oil prices. Unless the uprisings spread beyond LIBYA, oil may start to trend back down. I also made the comment in the post that the world seemed to be well supplied with oil for the time being and the price run up was more due to a belief by the Masters of Disaster that a profit could be made by throwing a ton of money at purchases of oil futures. <br /><br />Over the long term, I do believe that prices will rise to $200 per barrel, based on peak production occurring at a time of rising demand. So I am unmoved by the day to day movements in the stocks or the current oil price. I am a long term holder of Canadian oil producers, particularly those heavily involved in the long lived oil sands.<br /><br />I would not be surprised to see in 20-30 years, assuming I am still around, severe restrictions on the use of gasoline powered private vehicles, mostly due to price and availability of the product. The supplies may be rationed to military use and for use in distribution of products and public transportation. The price of oil could easily be $300 per barrel then.<br /><br />Production will simply not be able to keep up demand. Auto purchases in China, for example, are just surging. New sales rose 14% in January 2011.TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-71686665763977856602011-03-08T08:58:28.639-06:002011-03-08T08:58:28.639-06:00Can you suggest a rationale for the fact that &quo...Can you suggest a rationale for the fact that "notwithstanding the rise in the oil price yesterday, many energy companies declined in price."?Anonymousnoreply@blogger.com