The Oracle Of Oil

For years Warren Buffett has been referred to as the Oracle of Omaha. Now it appears that many would like to crown Arjun Murti as the Oracle of Oil.

From What Mr. Crude Oil Sees Ahead by Lawrence C. Strauss:

In 2004, Arjun N. Murti, a Top Energy Analyst At Goldman Sachs, published a report predicting "a potentially large upward spike in crude oil, natural gas and refining margins at some point this decade." It was a controversial call, with crude around $40 a barrel at the time. But it was right on the money.

Four years later, crude is trading around 139.

Murti sees energy in the later stages of a "super spike," in which prices rise to a point where demand drops off. In a note last month, he wrote that "the possibility of $150-to-$200-per-barrel oil seems increasingly likely over the next six to 24 months."

With supply growth constrained and global demand staying strong, prices must rise further, in Murti's view. Barron's caught up with him last week in his New York office.

The 39-year-old analyst doesn't give many interviews and keeps a low profile, preferring not to be photographed. But his strong views on energy have resonated across the financial markets.

Read the Barron’s interview here.

Dave Manuel wonders if what Mr. Murti says becomes a self-fulfilling prophecy.

From Arjun Murti - The Man Behind the "Super Spike" by Dave Manuel:

Are his predictions a self-fulfilling prophecy? If oil spikes and hits $200 per barrel, then surely his own words would have had a major impact on oil hitting this lofty level.

Unlike other analysts who seem to crave the spotlight, Murti prefers to remain in the shadows, out of view. According to a recent WSJ article, Murti is actually decidedly anti-oil, and believes that the "super spike" in prices will eventually lead to a significant decline in demand for oil.

Where will Murti's "Super Spike" call rank amongst the all-time greatest analyst calls ever? Time will tell. One thing is for sure though - when Murti speaks now, people will listen.

Looking For A Stock Broker?

Are you looking for a stock broker? Do you need help trying to pick one? Every year around springtime Barron’s publishes who they think are the best. Investor Brain informs us of the 13th Annual Review of Online Brokers Up at Barron's Online. Investor Brain is written by Theresa W. Carey. She is the author of "The Electronic Investor" column in Barron's magazine. I like the Investor Brain site and find it interesting and useful. It contains a link to the Barron’s article on stock brokers.

If you are looking for a broker the best thing you can do is to do your own research. Check them out online for yourself. Some are quite accommodating. For example, Fidelity lets you sign on as a guest. You can even use their excellent stock screener when signed on as a guest. I wish more brokers let you do this.

As with anything, you should take any advice with a grain of salt, including mine too, I suppose. With that said, here are a few quick personal observations about online stock brokers and the reviews of them you may find.

I consider myself more of an investor, rather than a trader. What I want from an online stock broker are basically three things: a good stock screener, a good return on my cash, and a method of telling me how my investments are doing. Believe it or not, it is hard to find all three from one broker. Most brokers seem to think that everyone wants the latest gee-whiz software trading platform, and that they don’t care about the basics.

Think of how you will be using your broker. What will be important for you. As I’ve said, most brokers seem to market toward traders, rather than investors. If you’re not a trader they may not be the broker for you. Vanguard usually scores low, if at all, on broker reviews. However, if you are a “buy and hold” type of investor Vanguard offers an advantage other brokers don’t, a great money-market fund to park your cash. It all depends on what your priorities are. Most broker reviews don’t get into this very much.

I feel that Scottrade is overrated in most of these reviews. It is a good company, has great customer service, low commissions, however I’ve had problems with their stock screener online. Also their method of displaying cost basis online is kind of clunky. In fact, clunky is how I would describe their whole site.

Fidelity has a great stock screener. It has more bells and whistles than you may ever need. Sometimes their site seems very slow, however.

Firstrade has a customizable setup for telling you how well your investments are doing. I wish all brokers used this method.

I liked E*Trade. However, I moved my money out after their recent bankruptcy scare. They have an excellent web site, good cost basis information, and a good screener. Their customer service is not as bad as some would have you believe. I don’t like their use of teaser rates to get you to try something, however.

So there you have it. Just a few personal thoughts about stock brokers, by no means comprehensive. Do you have any personal experience with an online stock broker? I welcome your comments and thoughts.

Perusing This Weeks Barron's

I bought a copy of this weeks Barron’s at the local news-stand on Sunday. Yes, an actual print copy of what seems to be a vanishing medium. Literally shrinking, Barron’s is an inch or two shorter than it used to be.

The cover story is their annual “Roundtable” where they ask a bunch of financial people (“a bunch of financial people” is one of those technical economic phrases that no-one understands, look it up on Wikipedia or consult Alan Greenspan, if you don’t know what it means) to predict the future. Of course, no-one can predict the future so I don’t know why Barron’s does this every year. I also don’t know why I shelled out five dollars for the magazine, either.

Can you say “conflict of interest”? Sure you can. One of the bunch of financial people that was asked to predict the future is Pimco’s Bill Gross. You know, the big “bond guy” (another technical term). Bill Gross recommends that you buy two corporate bonds and three closed-end funds. Now, out of these three closed-end funds two are from Pimco. Yes, the company that Mr. Gross works for. If I buy the funds Mr. Gross recommends I might make some money, I might lose some money. Mr. Gross, however, will certainly make money, BECAUSE HE WORKS FOR PIMCO. Smells fishy to me. Barron’s should lay down some ground rules for these guys and gals, like, YOU CAN’T RECOMMEND YOUR OWN STUFF!

Last year Mr. Gross had three picks. One made money, one was even, and one lost money. The one that was even was a Pimco fund. If you had bought this fund you would have lost money, due to inflation. If you had bought this fund Bill Gross most certainly became richer.

By the way, Alan Greenspan works as a consultant for Pimco now. Also, Bill Gross doesn’t need your money more than you do since he is worth about 1.2 BILLION dollars. Now, that’s not Pimco I’m talking about, Bill Gross personally is worth 1.2 billion dollars.

One of the full-page advertisements located near this article also does not inspire me to part with any of my money. The ad is for Gorilla Trades. The spokesman for this ad is none other than 60’s heart-throb Davy Jones. Yes, the former Monkee. He says: “Even after all these years, I still like to monkee around, but when it comes to my finances, I invest like a Gorilla! After all, why trade like a monkee, when you can invest like a Gorilla?” Me? Well, I think I’ll just continue to invest like a human being. OK, Davy?

Barron's this week: Investment advice from Bill Gross AND Davy Jones. On reflection, maybe the five dollars was worth it. I never knew that reading Barron’s could be so much fun.