Wednesday, December 10, 2014

Oil Sentiment Back To Early 2009 Levels Of Despair

For the past two years the most hated assets on the planet have been gold and silver. With a modest sign of a pulse in precious metals over the past few weeks a new champion has emerged as the most despised asset in the world; oil.

The chart below from Sentiment Trader shows oil pessimism has now moved back to levels last seen following the Lehman crash when oil traded close to $30 a barrel.

Readers know I love to purchase assets when they are hated. If they become more hated, I love them more. Oil and oil related stocks have been on my shopping list for years, and I began purchasing again when the black gold hit $68 at the end of November. I plan on continuing to accumulate until it crosses back above $70 or until optimism returns. Hopefully that is years away.


h/t Short Side Of Long

2 comments:

  1. Hi there,

    Any advice on a method of buying oil? Through a fund or shares in oil companies?

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  2. Tuna, would you consider the possibility of a contagion effect from a prolonged period of low cost oil? How low can it go, and for how long? The socio, political and economic implications on oil-producing countries like Russia (remember 1991 when the USSR fell? And the Gulf War that ensued subsequently?), and to the OPEC states as a whole make the present conditions unsustainable for extended periods. .

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