Oil has come a long ways, in really short order, rising from $26.21 on February 11 to over $38 as of March 31 (a 46% increase).
Hedge funds have become “as bullish on crude as they’ve ever been, according to the latest CFTC data,” said CNBC’s Melissa Lee on Wednesday.
Is the bullishness justified? Let’s try to sort all this out.
To start, here’s video of a Lee’s and Timothy Seymour’s CNBC interview of PR Advisors founder Robert Raymond. To me, Raymond’s analysis makes a lot of sense. See what you think. I’ve excerpted several statement from Mr. Raymond, followed by my comments (labeled Feik) to give you my view.
Raymond: “(The bullishness) is actually part of what has us concerned.”
Feik: I agree. John Templeton provided a favorite investing maxim of mine (and of many others) when he said, “Bull-markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.” With so many people trying to bottom-fish in oil and energy right now, I don’t see the kind of pessimism or skepticism that sparks bull markets. So, like Mr. Raymond, that has me concerned. [Read more...]