Friday, March 04, 2005


Why didn't I invest in energy stocks?

It was a good week for my portfolio, as I reversed last week's big loss, and my portfolio hit a new all time high. I noticed today that the stock of ABLE energy has been soaring to the stratosphere. I vaguely remember looking at that stock when it was about $1 as a possible candidate for my portfolio. Clearly I should have bought it, as it it's now over $10.

Oh well. In retrospect, I should have been cognizant of the growing craze for energy stocks. Those investors who were either perspicacious or lucky enough to foresee the surge in oil prices are now basking in riches. The oil market has always been difficult to analyze. Part of the problem is that global petroleum supply is dominated by a few major oil exporting countries. In order to maintain stable oil revenues, these countries typically react by increasing oil output when the price of oil declines. This implies that the global supply curve for oil is downward sloping. If you combine this with an inelastic demand curve for oil, it is almost inenvitable that the demand and supply curves will cross more than once, implying multiple equilibria in oil prices, and hence the volailitity that we observe. On top of that, going long on oil future contracts is about the only effective hedge against further terrorist strikes, which is giving oil prices a further upward lift. All in all, it should have been clear that energy stocks would have been good investments last year. Unfortunately, I failed to see that.

Yeah.. tell me about it. I actually bought DVN at $46.50 hoping it would go up. For some freaking reason, it plunged that day and I sold it for a loss. *sigh*.. of course, the next several days, it continued to climb. Overall, lost like $450 on it. Stupid stupid...

Do you think it's getting a tad too high at this point? I am thinking this might be a good time to short?

So far, I am still making some boneheaded moves in my attempts to make money in the stock market. No patience. I shorted SBLK at 19.15 or something like that. And covered at $18.15. If I waited another day... it would have gone down even more. I used a trailing stop because I wanted to get my profits. But one bump and it sold.

I bought TIBX when it plunged last week at $7.50 and some at $7.20 and $7.10. I am hoping it'll come up again in a few weeks or months. Another one I bought today was MOT (motorola) when it fell to $15. I thought that was not a bad price.. so bought some in addition to shares I already own (but losing money on because I bought it at $18).

Sold some ASIA this week when it climbed to $4.70. Still have another 1000 shares of it. No volume on the stock.

How the heck do people make money.. I saw ABLE this morning going up 22% and thought there was no way it could go higher. But it did... so hard to figure out when is the right time to buy or sell. Day-trading... sucks..
MONDAY 3/7/05

Whew.. I shorted $20,000 of VLO last Friday and it freaking actually went down today, despite the news on crude might be going up. Anyways, I set it to LIMIT order so it auto sold at $72.90. Made a few hundred I guess. I am more relief that it frekaing didnt go up. Wonder why it didnt.

Also sold my 1000 ASIA today after it went to $4.99. I got it around $4.72 or so.

SINA is dropping like crazy today! Finally.. I shorted 700 shares of it last week. And TIBX is climbing. So today is not bad.. Also MOT is up (which I bought 200 shares last week for $15).

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