Oil is now some $30 cheaper per barrel than when we bailed out in November, but we still have no appetite to be long the commodity. Although we feel that current prices have undershot levels justified by long-term supply and demand, we believe the Saudis have strong short-term strategic motivations that will continue to pressure oil prices over the coming year, maybe longer.
On Being Contrarian
If you are a regular reader of mine, you will heard me refer to AlphaGlider as a contrarian investor. It’s a term thrown around quite a bit in the financial press, but you may not know exactly what it entails, why we consider it to be important and why it’s rare in practice. Hopefully by the end of this blog you will have a better appreciation of our thinking on the subject.