Oil and The Stock Market

Just a short post on what stocks I bought this week while the market was pulling back. I also sold some losers to raise cash and make these purchases.

Why the Sell Off?

It's all about the oil. Every day and all day. The economy runs on oil. When we have too much inventory oil goes down and the market goes down.

Don't be fooled into thinking this is about the virus in China. That is just a distraction from the macro environment we're in right now. That is, the banks need high oil prices as financial markets need the lubrication that oil provides. The military industrial complex of the U.S. runs on oil and lots of it. An event is coming in the not too distant future to cause oil prices to go back up. OK I don't know if that's true but a false flag might happen under this current tense political environment in the Mid-East.

Remember the assassination and subsequent missile attack? Oil spiked and then oil pulled back. Same as this virus.

On the 22nd of January it was announced that there was a significant 1mil barrel build in oil inventories while the market expected a 1.5mil barrel draw down. We also have over 4mil gallons of gasoline in inventory when a lot less was expected. That's the reason for the market sell off so watch oil price direction and try to invest accordingly. Protect yourself.

Oil and gas prices should really be half of what they are but corporations who run this show won't allow this to happen.

The Market

Stocks are headed higher and I've been buying the dip. Why is that? Well the fed just pumped another $90B into the repurchase market on Tuesday to keep the yield curve stable and alive. All this stimulus when everything and the economy is supposed to be the best in history. Unemployment, low interest rates etc. etc.

If so then why all the money when the fed's balance sheet is at $4T. Ya that's trillions and only going higher with no end in sight.

This is an addiction of the highest order, feeding the habits of this repo market so we don't see a run on the banks like the 1920's.

Lots of this monetary stimulus will find it's way into stocks. 

The worse thing you can do is sell everything and go to cash or bonds in my opinion. They pay peanuts. 1.5% for a ten year Canadian bond. Inflation is at 2%.

You're just falling further and further behind.

Stocks at the moment are where to be. I've been buying incrementally all this week and last.

What I Bought on The Dip 

AAPL, AMZN, MSFT, GOOGL, FB, and Visa.

I raised cash by selling all my remaining pot stocks at a slight loss. (TGOD, WMD). This is a trading account, so nothing is to be held forever like in my retirement account which is flush with dividend growth stocks. This is the account I gamble in. Thursday and Friday were great days to add to stocks as they were all under pressure from the sell off in crude oil.

I also bought BMO's US Bank ETF - ZBK. It's equal weight and I also believe with all the stimulus the fed is pumping into financial markets, I want to own some U.S. banks.

My Oil Bets

Just 3 stocks so far. I'll admit some of my gains have evaporated with the sell off but I'm going to hold for now. If we see further pressure I will sell at the profit I have.

ARX up 9% Div = 8.9%
TOG up 10% Div = 8.1%
WCP up 22% Div = 8.4%

I also own TCW and BDI. I have enough invested in the oil sector. Hopefully crude starts to resume it's upward trend and the market rebounds. Having said that it was a good week for sales on stocks.

The job is to make a profit so cutting losers early is just a part of good money management.

Have you been buying the dip? If so what stocks?

Related Posts:

Should We Be Buying Oil Stocks?

I'm Still Buying Because Stocks Are Going Higher