Meet Me @ The Gas Pump...It's Going Down

Literally, it may be time to meet at the gas station because the prices are finally going down.  When I thought about gas prices I obviously had the rap song "It's Going Down", by Yung Joc in my head.  It's been going down to the tune of 21 STRAIGHT DAYS with an average price around the country now at $3.60.  Yes I said to the tune...I can get that song outta my head.

Why is this happening??

Economy
 Well, start by taking a look at my last post written almost a month ago that outlined how high gas prices and not enough job creation hurts an economy.  If prices stay high for too long it begins to change the way people do things.  Remember Yung Joc said, "Meet me in the Mall, Meet me in the Club...it's going down"...well when gas prices stay high people start cutting back on buying gas and going to those spots.  As more and more people cut back, carpool, take public transportation or just travel less, the demand for gas will continue to fall and so will the prices. 

Over-Speculation
The other reason is there have been some high profile prosecutions recently of traders who were manipulating oil markets which has an impact on gas.  These traders can at times make the supply or demand greater or less than what the real market demand is for oil and when the fools are removed from the equation it helps to bring gas prices down.

Oil Reserves
Lastly, the US government just released barrels of oil from a strategic reserve that is maintained for emergency situations.  This was a coordinated effort of 28 countries around the world to release oil from emergency stashes in an effort to begin reducing the price and impact high gas is having on the global economy. The group of 28, also known as International Energy Agency (IEA), has taken these steps only three other times in history.

How to Invest - Stay defensive at this point - Dividends, Healthcare, and Energy

What's Up With The Economy, The Deficit...

That is a really good question, "What's Up With the Economy?"!  The best analogy is the economy is sorta like a really nice business train that is slowly chugging along and starting to lose passengers at each stop.  I think this is an accurate picture because the data is definitely mixed, showing corporate businesses are doing quite well and chugging along, like the train.  The passengers being lost at each stop are comparable to middle-class Americans that are being negatively impacted by: 1) high gas & food prices, 2) declining housing prices, 3) still high unemployment numbers.  And the biggest problem is JOBS, JOBS, JOBS, or the lack thereof.  Jobs are so critical because they give Americans confidence that the economy is getting better when they see their neighbors getting up and going to work, coming home with bags of groceries, and investing in their homes.  So who is focusing on getting more Americans jobs? That's the question that needs to be asked of everyone from the president and his administration, to your senators, then your local congressmen, and also of the companies that are doing well.  Every moment should be spent on turning the dismal job scenario around and we've seen our politicians come up with some solutions but not nearly enough.  The formula is not that difficult as it usually comes down to stimulating Americans and stimulating the companies who are tasked with hiring more Americans.  Its a shame the debate in Washington is whittled down to spending versus tax cuts, but that has been the case.  Last time I checked both scenarios cost taxpayers money but are needed to bring this economy back to life.

2nd Quarter 2011: 3 PREMIUM STOCK ALERTS

The second quarter of 2011 has produced three stocks that Urbanomics subcribers will have access to review.  These stocks are consistent with sectors that I believe should outperform in the current economic environment.

1st Premium Pick
STOCK: ******
BASIC MATERIALS
OIL & NATURAL GAS
TIP: This oil & gas play has planned big changes coming by the end of the year. Look for it to double, literally!

Click here for the other two premium alerts.

CLOSE POSITION - International Coal Group (ICO)

I have an announcement to make. My stock tracking portfolio will be closing its postion in International Coal Group, Inc. (NYSE: ICO).  This position netted roughly 258% over a one year period.

The reason why I'm closing the position is Arch Coal, Inc. (NYSE: ACI) has decided to acquire International Coal Group, Inc. (NYSE: ICO) for $14.60 per share. I have to admit that this deal was first announced on May 2, 2011 and since then ICO has hovered at a 52 week high of $14.52. With nothing else to gain, I will close the position in the portfolio.  Note: Your portfolio would hold this stock until the deal is completed and there would not be a need to sell the stock like I am in my tracking tool.
 
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Housing – When will the comeback story be written?

I look at the giant housing market here in the US like a prized fighter that has seen better days. The complacency is easy to see when you compare it to other fighters (like Canada) who’ve trained harder and set higher standards, such as requiring 20-30% down payments. However, all good prize fighters don’t stay down too long and eventually bounce back. I still think that the US housing market needs to see improvement in areas such as jobs and foreclosures but this fighter is getting its feet back underneath him. As usual, I’ll remind you to not listen to the Wall Street hype men out there who are always trumpeting that everything is great in housing, look where that would have put us 2-3 years ago. You have to always do our own research! I have not done a large amount of research but I think the housing market will make a comeback similar to LL Cool J’s return on ‘Mama Said Knock You Out’.

Notes from the Matix - April Download Pt II

Pharma
Pharma is short for pharmaceuticals and this has traditionally been an industry that I have shied away from as I’ve tried my best to incorporate a rule that I have learned from Warren Buffett and Peter Lynch awhile ago: Invest In Things That You Know

This is at odds at times with the strategy that I’ve been harnessing over time and that’s being a MACROVALUEQUANT. Often, my screens lead me select a stock that I believe has positive momentum (QUANT) and I further weed out these stocks if they are not trading at a low valuation (VALUE) and support my general view on what industries and sectors should do well in the current global economic environment (MACRO). My screens recently led me to 2 pharma stocks (See Pharma Premium Alerts Post) and I was very reluctant to nibble at the bait.

May Alert - NOBLE ENERGY

NOBLE ENERGY (NBL : NYSE) - An alert was triggered for NOBLE ENERGY. NBL has recently traded at $86.95, and this is an entry level that interests URBANOMICS


Note: This is an alert that this was triggered for URBANOMICS Alert Subscribers. This is a one-time free viewing of an alert that is viewable to subscribers.