Washington is filled with winners
Today's Financial News - Posted June 22, 2009
Washington has been busy lately. It means investors need to pay attention. The free markets may not be free for much longer. Take advantage of the action and start thinking globally.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore-(TFN):As much as it pains me to write it, I will admit Washington is filled with winners.
Let’s face it. To get to Capitol Hill and, of course, the White House, our leaders had to beat somebody else. Working their way through the ranks, the current administration has proven it is comprised of the slickest, most politically savvy and the best self-marketers the country has to offer.
But there is one thing most of Washington has failed to realize. They cannot beat the free markets.
No amount of campaigning, eloquent speeches or political capital will ever overtake the powerful, natural flow of money. The lawmakers can regulate all they want, but in the end they will merely push the money into a different pocket of the economy.
It helps to imagine the markets as one of those stupid stress balls we have all tried to squeeze until it popped. The more we squeeze it, the more the rubbery goo oozes out through the cracks between our fingers. What was once perfectly round and balanced is now an out-of-shape blob that expends all of its energy trying to get back to its natural state.
As Congress works overtime to manipulate the markets into something at least half of the nation’s voting population feels secure enough with to vote for, all it is doing is squeezing capital and profit potential out of the growing cracks of America’s borders.
For proof, all we have to do is look at the energy markets. A vote on the politically powerful, but economically ignorant Cap-and-Trade regulations could come as soon as later this week. Just about the only thing the legislation would put a lid on is the growth of one of the nation’s historically richest and most important industries.
Here is how the free markets will win
Washington certainly is not going to slow the industry’s growth outside of our borders. Especially when companies like Royal Dutch Shell are boasting more and more rich undersea finds. Just today the company announced the discovery of a massive gas field that could contain as much as 100 billion cubic meters of recoverable gas.
The find, dubbed Gro, is located in some of the deepest water of the Norwegian Sea. While the United States makes it criminal to dig for new sources of energy, Norway is working to ensure it is at the heart of Europe’s energy industry.
If you were following the news over the winter, you probably know having a stake in the region’s natural gas supply is a downright lucrative position. With Russia making a habit out of playing games with its more-than-ample supply, Norway is more than happy to accommodate the continent with added supply.
As America works to blackmail its current energy producers, domestic investors will be forced to sit on the sidelines and watch as foreign producers rake in the cash Uncle Sam ignorantly left on the table. Until Team Obama puts its trademark 90% tax any money made on “dirty” energy, the only way to play the situation is to think globally.
As you probably know, that is exactly what we did recently at Hot Stock Confidential. When Russia acted up, we made our move. One of the positions we got into was Toreador Resources (NASDAQ:TRGL). We sat on the position longer than we had hoped for, but on Friday I finally had all the sell indicators I needed.
We got out with 20% profits.
So far, it looks like we sold exactly on the top. Shares took a massive intra-day hit on Friday and are down by as much as 6% today.
The sell indicators work, with perfect timing!
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