Trader, not traitor. That's what I keep thinking about after the onslaught of criticism I got last night for saying that if you agreed with Carley Garner, our commodity chartist, that oil could run, then you want to own Pioneer (PXD) , Parsley (PE) , EOG (EOG) , Diamondback (FANG) and Chevron (CVX) .
Immediately the Twitteratti long knives were out. Who was I to recommend oil stocks? Am I out of my mind? I thought you hated the oils.
On and on.
From the usual kinds of names. Like Force Majeure. Or King of the Universe. No doubt their given names. Boy the hubris of their mothers to name them these boastful monikers.
You have to understand that I dislike oil. I do not like the fossil stocks. I think that the next generation of investors will avoid them like so many do tobacco.
But there are moments that they make sense as trades, and even though I do not encourage trading, I know a lot of you don't trade the futures yet might think that Carley's going to be right and want to play along with her. So I gave you oil companies that could make a lot of money if oil goes to $40 and can do okay if it runs to $30
Oil's way down. The futures are erratic and untrustworthy because of some shenanigans and a security, called USO (USO) , which is out of control and is pressuring oil down because it can't take delivery when the contract is over. It's insane that there could be a security created in large part for individuals who want to bet on the direction of oil that can't take delivery if it has to. That's an entity you can break by shooting against it because in the end it has to puke the oil up at any cost including paying you $37 for a barrel like last week.
That bit of manipulation that will never be seriously investigated because there hasn't been a serious investigation since the crash of '87, divorced the futures from the companies. If you notice, the out years barely moved. That sets you up for a good trade. Not only that but natural gas, which has been under pressure forever because it's a byproduct of oil wells and with the Baker Hughes of rigs way way down there won't be a lot of new wells so there's less natural gas.
That means, if you want to play it, you can buy the pure nat gas producer, Cabot Oil & Gas (COG) with a stock that's up 17% already this year. There. I did it again, Another trade not traitor.
I, by no means, want to buy the oils. I learned my lesson riding BP (BP) down for the charitable trust, thinking the 5% dividend would protect and the trust could use the income. Well, well, well, now it yields 10%, and it wasn't because they raised the dividend, if you get my drift. The group's in favor because it got oversold. Nothing more. There, I am not a traitor.
Every day there are good trades. Right now the housing stocks are running because people expect a good spring selling season as families, sick of the density of the cities, which they regard as a primary reason for the spread of Covid-19, flee to the suburbs. I come back and say, wait, I don't want to do that, because when unemployment is so high people don't buy new homes in the numbers that are lasting, But for a trade? Sure. Lennar (LEN) , Horton (DHI) , Toll (TOL) , all make sense.
And finally we are getting the tail end of the retail trade. Remember I told you when Target (TGT) put up those great digital numbers and everyone sold the darned thing down to $103 because of margins? NO NO NO. That's wrong. It showed the brilliance of CEO Brian Cornell's business model. It's now back to $112. I told you I liked Estee Lauder (EL) and Ralph Lauren (RL) and PVH (PVH) for this trade, which involves the reopening of America for business. Stanley Black & Decker (SWK) works, too.
Remember the mantra of the show: to teach, to educate, to explain, to put in context and entertain. I know trading. I was one. Jimmy Chill is not a traitor to the cause of the show or to the viewer. Which is why I blocked a dozen people after last night's show.