Wednesday, November 12, 2008

If you want to go long something...

...take my hero Nouriel Roubini's advice:

"I would buy stock in antidepressant firms."


Konrad said...

With the recent increase in pirate ship seizures and tanker owners planning to go around the Cape of Good Hope instead of the Suez canal, this adds 12 to 15 days on the time it takes a tanker to move oil to the US. For a slight period of time, one would expect oil prices to increase for a slight period of time. Is there a play here?

Rick said...

Great question! My response is that I wouldn't consider myself knowledgeable enough to make a short-term play because I'm not sure how much oil is coming in on tankers on any given day and how much buffer they have with new deliveries waiting to be offloaded. I'm also not sure whether decreasing demand would swallow up any perceived shortfall in supply. I would prefer to just make the longer-term play that oil is headed downward as economies collapse and lose both demand and dollars to fight over current supply.

I'd also go short pirates. There is only so much money you can steal from Saudis before you have problems!