Oil now cheaper than beer

[Murray]

This guy seems to know what he is talking about

^ bearing in mind I don't know anything so anyone could sound like they know what they're talking about to me

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[WalkinDude]

Circa 2010ish group of of major news publishers revealed $23trillion held off shore in various tax havens. Last figure I saw on this maybe couple of years ago was the figure was now in excess of $30trillion. More than America and China's combined GDP with room to spare.

This is what's being protected. And all the clapping for NHS staff, all the sudden desire to acknowledge binmen etc. Companies falling over themselves to reveal on their social media they are creating masks, and building ventilators etc but what no one even in a crisis of this magnitude wishes to talk about it that 30trillion untaxed and what 20 to 30% of it missing from various government coffers. 2008 onwards was the biggest rise for the 1% they've ever experience ever. I mean 'geniuses' like Sir Philip Green have become billionaires, Dick Fuld single handedly destroyed a 200 year old institution and walked away with his 500million no probs. Everything that is happening right now especially the virtue signalling going on shows nothing whatsoever has been learned. We now live in an age where people are opening speculating on the huge amounts of money they intend to make during the 'recovery'.

It's possible that figure offshore could within a decade hit $100trillion cos we are getting closer to the age where Jan and Andy living in the burbs in Shropshire somewhere will have 7 figure sums tucked away in the Cayman Islands way things are going.

 

[dee]

I was looking at USO but couldn't seem to find what the fees for an ETF are so until I fully understand what I'm doing I will leave oil alone other than shares in Shell etc, all though I'm sure there's money to be made there someway or another

Should only be paying fees if buying with leverage

 

[Murray]

Should only be paying fees if buying with leverage

I've read articles similar to this one and they all give a warning such as

https://www.fool.com/investing/2020/04/22/3-reasons-not-to-buy-oil-etfs-like-uso.aspx

"But speculators often get one thing wrong: timing. While they could be correct in the view that oil will rally, that might not happen as quickly as expected. Because of that, they might need to hold their oil price ETF for several months. In doing so, they run the risk of contango and other costs eating into their returns and wiping away most of the profit (if not all of it) from an eventual rebound in crude prices. "

Specifically - In doing so, they run the risk of contango and other costs eating into their returns and wiping away most of the profit (if not all of it)

But nowhere seems to say what the fees are

This article kind of explains it but not in language I'm understanding on first read

https://www.cnbc.com/2020/04/21/ret...esting-in-crude-oil-get-a-rude-awakening.html

"Most futures markets are in “contango” — the price of contracts farther out in time are more expensive than the earlier or “front-month” contracts due to the cost of storing the commodity. That is certainly true of oil.
So every month USO and other similarly structured ETFs have to close out their futures positions by buying the next month’s contract, and since it is almost always a higher price an investor over time — many months — will lose money.

The mother of all contangos?
As the short-term demand for oil has collapsed, the front-month contracts have collapsed, and the “spread” between the front-month contracts and those farther out have gotten huge: the June contract is at $13, the July is at $23. That means that investors — like USO — that will eventually roll over from the June to the July contract are having to pay a huge premium.
Investors, in these circumstances, are guaranteed to lose money. A lot of it, especially if it is repeated for several months"

 

[dee]

yep.... thats why i bought with zero leverage. I looked leverage and it was a ridiculous overnight fee. I didnt buy much, but not being charged as I actualy bought the underlaying asset. Etoro not charging anything. Heres a breakdown on how they calculate theirs:

https://www.etoro.com/trading/market-hours-fees/?category=etfs

Market is closed for uso but if opens tomorrow i'll see if i can tell exactly what charges are.

 

[Murray]

yep.... thats why i bought with zero leverage. I looked leverage and it was a ridiculous overnight fee. I didnt buy much, but not being charged as I actualy bought the underlaying asset. Etoro not charging anything. Heres a breakdown on how they calculate theirs:

https://www.etoro.com/trading/market-hours-fees/?category=etfs

Market is closed for uso but if opens tomorrow i'll see if i can tell exactly what charges are.

I'm 100% there will be fees, it's nothing to do with leverage it's about it being an ETF and not a share

The fee is something to do with future contracts in oil, something about having to sell the cheap contract and buy the expensive contract.. the price of storing oil, it's confusing

I don't understand it, maybe someone who does will explain, but you don't want to leave your money in USO long term

 

[bonusmedia]

All investment funds charge fees, there are different kinds, some charge admin fees, entry fees, pretty much all have a management fee, etc. The fees are not added on top, they come out of the investment.

The number you want to look for is the TER - Total Expense Ratio. This tells you what % of your investment is going to fees. When people talk about low cost tracker funds, something like a Vanguard FTSE tracker, the TER could be as low as 0.07%. If you're buying a specialist, actively managed fund, it could be 2% or more.

I don't invest in oil and gas so I don't know anything about how USO works, but it looks complex. Buying futures in a crisis is definitely very high risk. It's good general advice to stick to investing in instruments/sectors that you have some knowledge of.

Knowing that you don't know is a very good start. Be really careful about youtube videos. There are a lot of people claiming to teach you trade etc. Ask yourself, if they are a successful trader, why the hell are they putting all their efforts into making youtube videos about it? They're not successful traders. They're making money from advertising, commissions, selling overpriced courses, etc etc. Just like the MLM scams, they have to give the impression of success to hook others in.

Anything exciting, flashy, urgent etc is generally bullshit to sell you something. Find a nice boring, slow, academic course and put the time in, learn from first principles. Khan Academy has great free resources.

Re eToro - their business model is not the same as a broker taking a small commission on each trade. They don't make their money off people directly holding any assets. They are primarily a short term trading platform. The large majority (around 80%) of retail accounts lose money trading, and that money goes to eToro. For trading accounts they don't actually even hold the asset, they just set a price range and let you bet on movements. You're essentially betting that you're smarter than their professional traders.

People love thinking of themselves as traders instead of gamblers and the trading platforms are very keen to encourage that. Trading is not investment, it is gambling. With a lot of specialist knowledge, it is possible gain an edge. If you don't know what you're doing, you may as well just give the money away, you'll feel far better about it.
The worst thing that happen is having a run of good luck and thinking you're good at it, that's how people end up losing everything chasing their losses. People tend to think that if they made money, that was a good decision, without taking into account how much risk they took.

Platforms like eToro pay very, very high commissions to affiliates - $500 CPAs. It should tell you something that gambling affiliates and trading affiliates go to the same conferences. I was a gambling affiliate for years. For all its faults, at least the gambling industry is not trying to mislead people that they're making rational financial decisions.

Fool.com is at least 50% bullshit and should never be relied on by anyone for anything. Their business model is pure clickbait. Anyone can write anything for them if it gets views. I have worked with writers who have written for them who know literally nothing about investment. They look at what posts get views and try to use the same formula. There's no comeback or downside, no-one is building a reputation there, many aren't even using their real names.

I highly recommend a book called 'Thinking, Fast and Slow' by Daniel Kahneman. It's not about money, it's about recognising basic human psychological biases and overcoming them. It helped me a lot.

 

[ian]

eToro is a platform designed on giving their customers a sense of trust by piggy backing off a trader to 'sick' gains. Unfortunately, from my experience there, traders would buy a wide range of stocks, and only sell those in profit, holding on to the rest; it gave them a glowing reputation that others pumped their money in to, only to get nothing back out. Be careful!

I've played all these games before, losing a lot on oil exploration. At the time I was certain of a huge pay-out, and was suckered in by the "you don't want to be out of this over the weekend" lines. Most of the oil shares ended up being as valuable as the water they found!

I've since changed strategy completely, now investing only in large funds (typically Vanguard) where dividends are paid into the pot, so even in the bad times, you make something. Despite recent events, I've never sold from that pot, because I consider selling to buy lower a much riskier strategy than just DCA in each week/month. I have a long term view on this though.

Have a completely learnt my lesson? Depending who you ask, possibly not as I invest in Bitcoin!

 

[Murray]

I funded my Etoro account another $500 to buy USO

In the meantime I read reports basically saying you were stupid for putting your money into USO which put me off and I didn't do it

$2-17.. f**k lol

Did you buy and keep @dee ?

 

[dee]

@Murray. I did. 500 bucks @ about $2.50

Dont let the 17.50 fool you. They did an 8 way split last night in an attempt to make the stock look more valuable (essentially merging every 8 shares into one ), which is a sign of a seriously floundering company. Im still down, but figure unless it goes to zero...which is very possible, long term itll go up.

I bought smaller amounts in few others and currently up about 10% in less than a week. Could be down by 50% by next week though given current market conditions

 

[Murray]

@Murray. I did. 500 bucks .

Dont let the 17.50 fool you. They did an 8 way split last night in an attempt to make the stock look more valuable (essentially merging every 8 shares into one ), which is a sign of a seriously floundering company. Im still down, but figure unless it goes to zero...which is very possible, long term itll go up.

I bought smaller amounts in few others and currently up about 10% in less than a week. Could be down by 50% by next week though given current market conditions

Oh those slippery snakes this is how easy it is to fool a moron like me lol

Thanks for the info

 

[dee]

Oh those slippery snakes this is how easy it is to fool a moron like me lol

Thanks for the info

For info i bought:
carnival (cruises) - up 30 % since (had 500,million injected by saudi wealth fund....as did live nation) - think both of these will do well when it all ends and gigs can start again.They basically own the music world(ticketmaster and every major tour...all kinds of stuff)

S&P Uk +8%
FTSE 100 +7%
Rightmove +8%
UK Oil and gas -15% (bit of a buy and forget gamble as could tank out completely , but seriously large amount of shares for little money. If ever recovers could be a massive gain.

 

[newguy]

eToro is a platform designed on giving their customers a sense of trust by piggy backing off a trader to 'sick' gains. Unfortunately, from my experience there, traders would buy a wide range of stocks, and only sell those in profit, holding on to the rest; it gave them a glowing reputation that others pumped their money in to, only to get nothing back out. Be careful!

I've played all these games before, losing a lot on oil exploration. At the time I was certain of a huge pay-out, and was suckered in by the "you don't want to be out of this over the weekend" lines. Most of the oil shares ended up being as valuable as the water they found!

I've since changed strategy completely, now investing only in large funds (typically Vanguard) where dividends are paid into the pot, so even in the bad times, you make something. Despite recent events, I've never sold from that pot, because I consider selling to buy lower a much riskier strategy than just DCA in each week/month. I have a long term view on this though.

Have a completely learnt my lesson? Depending who you ask, possibly not as I invest in Bitcoin!

That's part of my approach too, as I saw various examples showing that much of the gains over long periods are reinvested dividends rather than the actual stock price. One concern in the current climate is some companies cutting or scrapping dividends, but again that's possibly more of a short term rather than long term concern

 

[Murray]

For info i bought:
carnival (cruises) - up 30 % since (had 500,million injected by saudi wealth fund....as did live nation) - think both of these will do well when it all ends and gigs can start again.They basically own the music world(ticketmaster and every major tour...all kinds of stuff)

Yeah I bought Royal Caribbean and Carnival

I sold royal at $37.02 though at a 27.5% profit early April

And Carnival yesterday at $13.91 26% profit

I didn't put much money into either though so wasn't really any meaningful money made. I see they've both jumped up again today 10%

They seem to react very heavily to any positive news and jump up and down 10% like it's nothing

 

[dee]

They seem to react very heavily to any positive news and jump up and down 10% like it's nothing

Yep. Its pretty volatile at the moment. Sentiment can change in a heartbeat.

lol.... sell everytime it goes up 10 and buy when it goes down...simples right

 

[newguy]

For info i bought:
carnival (cruises) - up 30 % since (had 500,million injected by saudi wealth fund....as did live nation) - think both of these will do well when it all ends and gigs can start again.They basically own the music world(ticketmaster and every major tour...all kinds of stuff)

S&P Uk +8%
FTSE 100 +7%
Rightmove +8%
UK Oil and gas -15% (bit of a buy and forget gamble as could tank out completely , but seriously large amount of shares for little money. If ever recovers could be a massive gain.

Nice one. I invested in Index Funds with Vanguard a few weeks back. Currently they're up 7%. It's a volatile time of course, so in a couple of months maybe they'll be down, but I'm trying to take a long term view. The short term right now seems very difficult to predict.

Also I opened a Stocks and Shares LISA and invested in William Hill and GVC . They're both up around 20% and I think there's maybe more upside once sports start again. I didn't make a killing like some though. William Hill went from 192 in late Feb, down to 36 on March 18th, and are now at 112. Crazy rollercoaster ride!

 

[dee]

Nice one. I invested in Index Funds with Vanguard a few weeks back. Currently they're up 7%. It's a volatile time of course, so in a couple of months maybe they'll be down, but I'm trying to take a long term view. The short term right now seems very difficult to predict.

Also I opened a Stocks and Shares LISA and invested in William Hill and GVC . They're both up around 20% and I think there's maybe more upside once sports start again. I didn't make a killing like some though. William Hill went from 192 in late Feb, down to 36 on March 18th, and are now at 112. Crazy rollercoaster ride!

i put a small bit into VTI a couple weeks ago on etoro aswell as USO ( the above are on a new freetrade account so its tax exempt.... wish id known more about this stuff before) I bought about 2/3 down the slope so it was down a fair bit but now in profit a small amount. Dont have large amounts in anything so none of it is hugely lifechanging if it all recovers.

 

[dee]

This could be good for Abbott if anyone interested.Just out:

ALthough probably priced in already

https://www.independent.co.uk/news/...zvcc5eva2PSY3s3UDuyAeth1HIFIND2KUrLIMxK0vqSCw

 

[newguy]

This could be good for Abbott if anyone interested.Just out:

ALthough probably priced in already

https://www.independent.co.uk/news/...zvcc5eva2PSY3s3UDuyAeth1HIFIND2KUrLIMxK0vqSCw

Yes most likely. Promising for society if we do finally have a reliable antibody test .