11/14 Kelly Letter Topics
Weekly market review
The bottom holds
Big bounce volume
Recession projections
The magic midpoint
LevMark Timer holds
Crocs is dying
Hope for Goldman
Importance of retest
Energy is not a fickle industry. It's one of the best developed and best managed on the planet. It's not going away. Your money invested in energy is safe. Do not sell because of currently low oil prices. They will eventually rise again.
If anything, watch the oil sector with an eye on buying.
That was a good call so far.
Oil closed this week at $59.89, near the highest it's been all year and 15.2% higher than its $51.99 close on Jan. 19, the Friday before I posted the oil report. That's quite a rebound in just three weeks.
Exxon Mobile reported 2006 profits last week, and they were the highest that any company in U.S. history has ever reported. That's a pretty good indication of the kind of business that oil provides.
Oil stocks have done well. I suggested in the report that both Baker Hughes (BHI), BJ Services (BJS), and Grant Prideco (GRP) looked like good buys. In the past three weeks, here's how the three have done:
BHI: +6% BJS: +3% GRP: +13%
Three weeks does not a successful investment make around here, but it's a good start to what I think will be successful long-term holdings.
To those of you who were worried about your oil portfolio three weeks ago, I urge you to remember this mini-experience. Investments bought for sound reasons at reasonable prices need not be sold under duress at market lows. If anything, down markets are a swell time to buy more. This is why I am so meticulous in researching and patient to buy. Doing so gives peace of mind when the market moves against you. Trading junk requires extremely good timing, which few people have, because junk doesn't afford the luxury of relaxing when prices move lower.
Oil companies like the ones I mentioned in the report are not junk. They're excellent businesses.
Congratulations if you held or bought more. You must feel better these days than you did just a few weeks ago.
