There are so many voices on Oil Prices, and where they are trending. Last Friday, I made my own call at about $102 saying the Libya shenanigans are largely baked in, and to get ready for profit taking. Oil prices have ticked up a bit since then, and people can still hold my feet to the fire for a little while longer. But today, I want to say a few words to all the long term investors who think Oil is still going going going – The United States Oil ETF (USO) ain’t your friend.
Of course, USO holders rode oil prices down just fine, but since January 2009, when Oil Prices began their historic rebound, the difference has been stark. Above you can see the ridiculous tracking error over the long term. But for even a few weeks, USO can’t keep track of oil prices. Check out the 1m chart for example. You just aren’t getting the benefit of your economic prognostications. So even though you were so sure of your economic outlook and Libya and Middle East chaos, and you were high-fiving your trader friends about what a sooth-sayer you were, you chose to put your chips on USO and got a raw deal – 6% difference in gain between Oil and USO since the Feb 20th spike began.
So just what were the stocks, ETFs, and mutual funds that made the best Oil plays over the past month? Well, so far, using HiddenLevers, I can tell you what the best Oil investments are over the super long term (10 years), to guide your future investment decisions. But soon, as we build in correlations analysis for lesser time frames, HiddenLevers will be able to answer such questions. It’s getting better all the time.
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