As we noted last November, oil prices were approaching resistance at $32.25. As we noted, “if prices pop over that level, you could see a clear run towards $36-38.”
So now we read that a Wall Street legend avoided our good (and free!) advice:
“Hedge funds started a year ago by a leading investment strategist, Barton M. Biggs, have been stung by losses this year, partly because of a bearish bet on the price of oil at a time when the commodity’s prices are setting records.
Mr. Biggs, for nearly three decades a strategist at Morgan Stanley, set up his investment firm, Traxis Partners, in June 2003 with two other longtime Morgan employees. He now manages around $2 billion in assets. Mr. Biggs, 71, joined an exodus of scores of prominent Wall Street executives over the last few years who started hedge funds – portfolios managed on behalf of wealthy investors and institutions like pension funds.
Mr. Biggs’s funds were down more than 7 percent this year through July, net of fees, according to a letter to Traxis investors. A majority of the losses came in July, as the price of oil soared. Yesterday, crude oil for September delivery settled at a record $48.70 a barrel on the New York Mercantile Exchange. Futures prices have climbed more than $10 a barrel since the end of June.
In all seriousness, I rarely would want to be on the other side of a bet from Mr. Biggs. And, I expect that right here is where we should see some sort of topping action in Oil.
But that doesn’t mean we are going back to the mid-30s anytime soon; I’d be happy with low 40s.
Here’s an additional excerpt:
Someone had asked for additional views on the 3 Bubbles form the WSJ a few months ago. Here’s IBD’s take on it; I’ll try to post another perspective on it from Jim Stack of Investech . . . Source: IBD http://www.investors.com/images/editimg/feature0817.gif