Seen on @InvestorJunkie 's twitter feed.
While the it is always debatable whether or not a borrower can purchase a home in their city, I find the below map, published along with an accompanying article by the Washington Post, to be very interesting.
Fortunes have been made and lost (see Harrold Hamm’s billion dollar divorce) during the last 90-120 days with the wild swing and mostly downward spiral of oil prices around the world.
The overall consensus is that the world suddenly has an oversupply of cheap oil. Additionally, prices are being artificially depressed by the middle eastern oil producers as they flex their muscles in the face of US Shale producers.
I dare to ask, how did this price drop happen so quickly? Did the oversupply materialize overnight? Can the middle eastern nations really keep depressed prices much longer or can we assume some excessive declines as a result of heavy shorting of the oil trade?
Of course the answer is a combination of the above factors along with a heavy amount of speculative trades. He who picks the right side of the trade (I did not!) will undoubtedly make a fortune.
The reality is that oil stocks have suddenly become the “IT” commodity in the very same manner that tech stocks were the darling of the mid 90s. The daily percentage fluctuations in prices have become so pronounced (see GDP) that the underlying factors have become secondary to the value of the trades.
I have no doubts that oil prices will rebound. Wall street seems to be betting on a rebound as well, with calls from Goldman Sacks and other investment houses emphasizing the position.
I believe it fair to assume a rebound within the next 6-9 months for the following reasons:
For my side, I am confident (my personal opinion only) that we are currently trading at or near the bottom of the range for the foreseeable future and just like the tech stocks of the mid 90s, this trade offers great risk/reward potential.
Enjoy the lower gas prices and best of luck with your investments!