Sell in May, No Way per oil guru
posted on
May 19, 2011 12:46PM
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Sell in May? No Way
Summary and Recommendation
In addition to political, economic and environmental trends supporting long-term investment in oil and gas, we think there is a reasonable chance the near-term gains could be unusually strong. As a result, we do not counsel "Sell in May and Go Away" as the popular expression summarizes the historical seasonal pattern during which the stock market gains from May to November are slight compared to those from November to May. Instead we see a strong historical comparison to May 1979 when we wrote one of our better-timed buy recommendations
. Then choose other stocks to substitute or supplement, for example, to gain more natural gas exposure. Meanwhile, oil price, the most direct indicator of industry conditions, trends up with the latest quote for the next six years at $107 a barrel compared to the 40-week average of $93 (see table Six-Year and One-Year Natural Gas and Oil Futures on page 7).
Kurt H. Wulff, CFA