Milan Momirov

USO: Death by a Thousand Contangos

PowerShares DB Oil (DBO) also invests in monthly WTI futures but the rollover is done at the discretion of traders who choose the time and month into which to rollover, rather than mechanically like USO. This has benefited DBO considerably over the past three months relative to USO. Up until that time, though, the two funds were similarily affected by contango.

I am not aware of any way to directly go long crude (renting storage at Cushing aside). However, the smaller oil producers (for example ARD, APA, SU) have near-perfect correlations to spot oil, so you may consider a basket of these stock. Also, DBO and USO work when oil is in backwardation.

On Feb 24 10:59 AM tomatden wrote:

> Thanks for the info Milan. Is there another ETF or equity you would
> suggest for someone wanting to go long on crude?

Potash Corp.: Poised to Soar Once Hedge Fund Worries Subside

" We also noted that George Soros had been purchasing Potash Corp. "

The same article notes that Soros also purchased $180m Lehman Brothers!

A Simple Momentum System for Beating the Market

Like many other discussions of momentum analysis, this article makes broad assertions of the virtues while skirting the difficult details. Of course momentum exists in individual stocks – few people subscribe to the pure form of the random walk.

The underlying economic principles are readily understandable. For a single company, steady earnings growth over the past few quarters is in most instances the result of circumstances that won’t change on a dime, so, all other factors being equal, betting on a continuation of a good trend is better than betting on the reversal of a series of bad quarters. An ETF approach is simply the single company approach applied to a sector.

The difficult details are the choice of entry and exit points. Most trends are interrupted by breaks, and all eventually reverse. All momentum-investing systems rely upon rules that purport to filter out the noise, cut the losses, hang in through the head-fake breaks, and exit before the true reversal, rolling the investment into another stock’s uptrend.

Most such systems will make some money some of the time. If any system exists that makes good money all of the time, its inventor isn’t going to be writing a book about it.

Investment Strategy: Be Prepared to Take Advantage of Tomorrow's Sunshine

The author writes "I am a big believer in cycles.". That's faith-based investing. The markets, though, are agnostic. Anyone can safely make five-year market forecasts since nobody bothers to check them five years later.

Oil, Gas, Electric Cars, the Market and the Economy

It’s a little late to be signing up to the Armageddon notion at this point. On July 11th, the S&P dropped to a level it first crossed (post dot.com bubble bust) three years earlier. It's just the fourth three-year S&P pullback in the last four decades. The most recent S&P earnings estimates produce a 2009 P/E of 11.6. This palpably implausible number indicates that investors collectively disbelieve the estimates. In other words, everyone agrees the outlook is very lousy.

Certainly one can imagine the global economic condition getting worse, much worse. But absent more solid evidence I think it more likely that the credit-bust pig is indeed passing through the python. It is a bigger pig (and a longer python) than was imagined at the first swallow in July 2007, but that’s par for the course.

Recovery will come in six months. No, I don’t mean in February 2009, I mean six months from today, whenever today is. That’s the standard prediction, which, repeated often enough, eventually comes true.