May 20th, 2013
Something very interesting just happened at the 2013 MoneyShow in Las Vegas.
The purveyors of doom and gloom were still hawking their services there. But the primary solution they all offer – a cure-all elixir for all that ails markets – was beginning to wear thin. They were lacking in the usual conviction that this one asset is the confident remedy for all investment problems. And the audience seats at these sessions were half-filled.
Indeed, gold is losing its luster.
The erstwhile commodity fix has been under pressure of late. Yet, even while most eyes have been on declining commodities – especially gold, silver, and platinum – something else has been happening.
Crude oil is emerging as a new replacement to reflect stored market value.
That is good for folks like us who invest in the energy sector, because it will provide a floor to downward pressures in prices. It will not counter all forces reducing the price of oil, but it is likely to temper such movements, allowing us some leverage.
Take a look…
May 13th, 2013
For those OEI readers who are not also members of either Energy Advantage or Energy Inner Circle, I always begin alerts for those subscribers with the actions I am recommending.
Here’s what I recommend you do today:
Actions to Take:
1. Buy (or add to your position in) Cheniere Energy Inc. (NYSE: LNG) at market and use a 30% trailing stop to protect your investment and your profits.
2. Buy (or add to your position in) Access Midstream Partners LP (NYSE: ACMP) at market and use a 30% trailing stop to protect your investment and your profits.
3. Buy Sabine Royalty Trust (NYSE: SBR) at market and use a 30% trailing stop to protect your investment and your profits.
(This 30% trailing stop advises you to sell the shares if they decline 30% from the highest value realized during your holding of them.)
Friday’s OEI sketched out what I refer to as a concentric cross-hedge. These are trades designed to maximize return in periods of narrow-range trading by combining investment in distinct energy sector sub-segments.
Recall, as a hedge, this approach differs from the standard variety. It provides bothan insurance move against volatility anda genuine opportunity for higher growth in the underlying share values.
There are going to be hundreds of applications for concentric cross-hedges throughout the energy sector as circumstances warrant. These will even develop into interesting applications acrossenergy types in the not too distant future.
For now, however, I will be suggesting such hedges in oil and gas. The initial hedge I’m outlining here is in natural gas. It is the recommendation I will be making to the MoneyShow at Caesar’s Palace in Las Vegas tomorrow.
You are getting it today.