What stocks to buy during oil crisis?

Question

Hi there,

1. Which stocks will benefit from the current oil price crisis?

2. What stocks did well in the 1970s oil crisis?

Thanks~

Answer 1

Most probably the energy stocks will gain. You can look at small cap and micro cap stocks.

Some of them:

EMVL (Quoted by Motley Fool as high performance stock that can double)

EENR

IPMN

Answer 2

If you are really keen on investing in energy stocks, buy shares in a mutual fund or an ETF. This will greatly lower your risk by diversifying, rather than just trying to guess at individual stocks.

The Vanguard Energy ETF is an example.

Over the long run, however, there is a lot of evidence that you can get good returns at much lower risk by buying and holding index funds.

Answer 3

It depends on your time frame, and some might say we've already been going thru such a crisis for the last few months, so the thinking is a little late, and usually , when your late, your wrong and will lose money in the market. But if you want to play under the assumption that oil may not continue a lot higher, but will not drop significantly either, so the price of oil will stay chronically high, here are a few things that have worked well in the past under similar circumstances.

1) You can strictly play oil, buy buying the ETF, USO, this tracks oil itself and is in a major uptrend.

2) Alternative energy plays such as solar, biodiesel. These don't have a history in the 70s, but a possibility here. Although the solar plays already have had big runs.

3) Short consumer discretionary, like retaurants(midrange) and transports like airlines.

4) Gold. Already has had a big run, but its a 'safe haven' in times of market turmoil, and has been trending with oil. You can buy GLD, the ETF that tracks Gold.

Answer 4

buy natural gas stocks like CHK and APA

Answer 5

I think we are looking at a bubble. Be careful.

When the big boys start to pull out don't be caught holding the bag.