Fly on WallStreet

Hopefully this turns out to be a good call. I joined you on this one (less shares). If it falls further I'll double down. I'm looking at HAL as a similar play on a rebound. Any thoughts on HAL at 28?
 

Be careful. I have a feeling I will need to average down until winter.
 

I am thinking oil gets a bounce soon(days a week or two) and their so wound up the bounce will be great-but anyway all this neds is one move on some event(inventories,demand,outage,upgrade,politcial..etc) and a reversal will be lasting..winters comming..anyway I brought some nov calls in the comples,mro and dvn plus APC common...I also brought OCT puts on rimm...earl.

PS Cramer had a AAPlus this morning where he said he will relpace AL with a new name..can you give the name here? thanks
 

broker a.

Can I just do a friendly double-check on you? Are you sure you want to be long oil....or are you just trying to prove Cramer wrong. Remember that a thesis can be correct EVEN IF Cramer believes it.

Again, just a friendly check. What is your tech thesis and energy thesis for the rest of '06?

best,
homespun
 

I'm noticing open interest in crude contracts dropping off - not just the near-term contracts but all the way out till dec 08 (smaller drop for further contracts, but still...). It's telling me folks are quitting the game. Last week I thought oil might have the big bounce, I'm not sure I see it now with interest declining. Still waiting for equity correction though... sigh.
 

Homespun:

Buying VLO has nothing to do with Cramer. I just poke fun at him because he is such an easy target.

My original thesis was to go long oil--short tech.

Reason being: If tech is rallying due to cheap oil, its because world growth is slowing.

If world growth is slowing, then high multiple tech should slump.

So, effectively, long oil--short tech, should be a good hedged investment.

Naturally, these things take time to develop and I will be pateint.

But,in short,I do not believe growth will slow so much that the oil card will be taken off the table. And if so, my shorts in tech should hedge me.

Until I am sure of the direction, I will make a decisive change.
 

Hey broker whats cramer looking to add to aaplus? and now you own 22,000 vlo?
 

Nothing on the Cramer front.

Yes.
 

Broker A.

Fair enough. As it happens I have the opposite thesis. Long tech & financials and short oil & metals.

Reason being: Tech is rallying because its growing again, and even more important, the street notices. When was the last time that CSCO and ORCL both beat numbers and electrified the street? 7 years? Estimates are way too low for '07 imho. They will come up and with the Fed being done, multiples will expand as well. Also, tech has a long run substitution effect for oil, so the emerging economies will invest heavily in it.

I dont believe growth is slowing much at all. Oil is tanking because marginal supply is increasing and because half the price of a $78 barrel is fear. Gold is tanking because its worth about 300-325 but now selling for 580. These are speculative bubbles and some air will be let out. Of course, the long term demand for commodities by China will continue. That thesis doesnt change. But the "internet growth" thesis didnt change in 2000 either. However it did get repriced.

The PPI suggests inflation is low. Also, consumers are actually spending (BBY). The effect of the housing mkt on the overall economy is, in my view, vastly overblown....a bit like Y2K was. I think the economy is much stronger than most think. Yet...because of these expectations the Fed is pinned. Even if they ought to raise rates they wont...and I doubt they will right in front of an election. Further, the currency problem in Thailand probably freezes the tightening of all other world central banks for a while...just as insurance against a problem. Low inflation, high growth, a flat to easing Fed...and pessimism to boot? Sounds like Oct '98 to me. I like tech. I like it as much as I did in fall '98.

But I could be wrong. Please attack my thesis. If I cant defend it, then I should probably reverse the trade.

Good Luck,
homespun
 

Homespun:

You make a lot of sense.

Let me say this:

I will start heavily buying some of fav tech names shortly. Despite potential pitfalls in the economy, right here and now, this market is going higher.

So, I'll play it.

But, Semico research has stated semi inventories are up 18% and capex will be down 13% in 2007.

If the semis lay bricks, no fucking way the market soars.

Example: SLAB.