More Opinion by The Springboard

THE UPRISING OF THE AMERICAN PARTY "Clearly the voters are engaged right now, at least for sure on the republican side, and what they have concluded is that the republican party has not done their job. Thus, Donald Trump gets their vote."

Thursday, August 7, 2008

OIL'S DOWN AND THE MARKET IS A BUY

I'm sticking to my guns with regard to this market and the stocks I like best. If one thing holds true, you have to believe in your plan and stick to it, and that's exactly what I'm doing. Oil is coming down as I predicted, though its happening much sooner than I could have hoped for. We're now teetering around $119 a barrel and we've seen more declines in the price of crude in the past month than we've seen gains. This bodes well for consumers who get a brief break in the price of gas at the pump, and bodes well for investors who will see their portfolios rise as consumer confidence and spending also rises.

But before we get too excited, I'm not so sure we're quite out of the woods yet. As I see it, oil could simply be taking a little breather before it rockets back up for a little while to then finally take it's fatal plunge back into the $100 a barrel territory. Will it see the $150 or $160 range we all thought it might? Maybe not. In fact, probably not. The recent price hike in oil has been surprisingly effective in actually changing peoples habits. We've reduced driving miles by the billions of miles, and we've seen record declines in interest for gas-guzzling trucks and SUVs. It's by no means an overstatement to say that many of these large vehicles are rottting where they lay on the lots, and in fact just the other day I drove past a sign along the highway offering Dodge Ram's for 40% off. Even at these giveaway prices SUVs and large trucks are far from flying off the lots. So, oil could probably jettison up to around $135-$140 a barrel before we head back down if we see another run up in the price. Of course I'm no expert and I've clearly stated this before. But I do consider myself to be obervant.

What stocks am I buying right now? I'm still a buyer of HQ Sustainable Maritime Industries (HQS) which operates in Hainan, China. They mainly deal in farm-raised fish and distribute both under their own brands and co-pack for other companies as well. With people having a growing interest in the benefits of Omega-3, and with many wild caught fish being riddled with contaminants, such as mercury, HQS has lots of wiggle-room to grow its business. I also like Marcus Corporation (MCS). I'm banking on the premise that in bad economic times people will escape to the movies. Marcus also manages a number of resorts which I think stand to benefit when the economy eventually rebounds.

Western Union (WU) is one to watch as well, and while I haven't bought yet I'm thinking about it. It's currently up 13% since I started watching it back in July and I think it's a $32 stock. I'm waiting for a slight pullback and then I'll start buying.

Target Corporation (TGT) also continues to interest me (though I do not currently own this stock). I think they will have a strong position going forward when the economy does finally break free from its current circumstance as people who have been strapped for cash, and who have been patronizing the discount stores like Dollar Tree (DLTR), Big Lots (BIG), and of course the behemoth, Wal-Mart Stores (WMT), in order to stretch their wheezing dollars, are going to want to treat themselves. Target Corporation enjoys a sort of middle ground between the low-end discount stores and the higer-end like Kohl's (KSS) and Boston Store (BONT). I'll wait to start buying into this one when oil gets closer to $100.

It's my opinion that we have seen the market bottom, right about the time we teetered around the 10,000 territory on the Dow Jones, and so I am a buyer right now, even if we may still have some pullbacks such as today's 200 point drop. The Dow will likely still see shakiness, especially if oil does start to work its way back up, but I don't think we'll see the numbers drop below 11,000 points before the end of the year. A couple of key points here is whether the Fed can keep inflation at bay and whether the credit markets can see a clear path to recovery. Housing prices need to stabalize as well, and in fact I think we may have seen a bottom there also.

Again I stress patience. The best is yet to come.

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