Thoughts on Oil, BRK and stuff!
Traders worry gasoline demand will outstrip supply
Oil will have a toll on this market. Whatever President Bush does in his talks with the Kingdom of Saud might have some impact, but the bottom line is - no amount of diplomacy will override the fundamental supply-demand curve.
I dont want this to sound as if oil prices will continue to affect the market forever, but might do just the amount of damage enough to push us into a recession. Hopefully I am wrong. I for one seriously do.
Well, the lil bird on the wire tells me that there will be a run up in the DOW till the mid 10000's after which I would move into cash - and into only those equities which dont get affected by Energy. You might think there are many - but you will be surprised to know how few sectors there are that are not touched by energy prices at all.
Berkshire Hathaway - To Buy or Not to Buy
I am contemplating on buying a couple of Berkshire Hathaway shares - but I am worried on how volatile the stock might become in case either Munger or Buffet cease to run the company. The fear is well founded since both of them are 81 and 74 respectively. The only other reason I cannot get myself to make up my mind is that I dont understand exactly what BRK does. I know it is a conglomerate and I guess I better re read the company info section once more. But I do take comfort in the fact that Old Man Buffet has hedged against the dollar and diversified a lot internationally by investing in Petrochina (PTR) and buying more and more insurance companies - the one sector of companies which never lose money - ever.
Oil... Oil... Oil... Were people as worried and pessimistic as I am in the 70's when the oil shock happened? I did not look hard, but there was no ready documentation on the general sentiment of people there.
A couple of more things, I have been truly flattered by a couple of things - Barrons published an article called "A Bi-Polar Market?" just a day after I posted my post titled "Market Schizhophrenia?". Secondly, the topic of "Stagflation" was in this Weekend's Barrons again just a couple of days after I wrote about it. I know I ain't that good, but surely the guy at Barrons who is reading my blog can be my friend.
On another note, I got an email from New Zealand from an Old Gentleman who told me that my blog was refreshing and wished I would update it regularly - not daily , but regularly - as he could come to the blog to see something new when he visits. I did write back to him saying that this is a hobby and that I would do my best to have something up every 3 days, if my wife does not throw my computer out of the house