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Thank You, Grandpa

Posted by kdadmin on January 11th, 2015.

My grandfather was in the oil business decades ago. He worked for Apache. He was a VP of something or other. I was too young to care at all about his job title, but I do remember his comments about the movement of oil. He was a pessimist for sure.

He preferred hard facts; things that could be measured; but was in an industry bent on hyperbole. This was part of the reason he was such a hit at parties, he could be a total crank, yet would come off so ironically satirical that everyone thought he was a master of subtlety. In actuality, he was a slave to hysterical timing. I loved him for this.

This recent article from the WSJ would have summarized his position on oil prices exactly. Specifically, the comment that the cure for low oil prices, is even lower oil prices. I can still hear him muttering, “That’ll teach ‘em.” SO funny.

Here’s the rub; it might not be far off. Look, nobody knows where oil prices will go, and/or when they will tick back up. But when LOTS of people are betting on a sharp recovery, that’s an EXCELLENT time to reconsider your assumptions about the market. Maybe trying to catch a falling knife (buying a falling market that cuts you on the way down) isn’t really the best idea. I mean, oil (brent crude) IS down 19% in one month, and OIL (the ETF) is down 6% in five days. THAT really isn’t a buying signal, my friends.

Brent & Oil

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