I was watching a Dodge Commercial today (owned by Daimler/Chrysler) and my jaw dropped:
“We are guaranteeing $2.99 gas for three years with every Dodge purchase’
Sure cars are leveraged to oil, but basically Dodge (Daimler) has decided it would be o.k. to further gamble on the future by placing a bet on oil. It’s all fun and games when you are so removed from the common shareholder.
One of my first posts in December 2005 (eighth to be exact and the blog was called PUTZorYUTZ.com), speculated that the Commodity Boom was just starting . There were lot’s of great breakouts at the time. Quite simply, following price would have made you a freaking fortune the last 3 years – well after the boom started.
Flash forward 2.5 years and you could mumble the same question(s). The fact that management at Dodge is telegraphing their hand is just one of 100 reasons that oil continues to spikes. Traders lick their chops as every government, airline and now auto manufacturer hedge and gamble on oil. Probably the greatest and now longest lasting ‘front running’ trade of all time. Pity I am too smart to be 100 percent leveraged to it :) .
The longs are euphoric and the shorts are now depressed. Betting on when both the moods flip is something I try hard not to do. I myself have blogged and been long OIH and other oil stocks for some time, but even I shorted oil Friday (using DUG), for a trade (even if I am right, it’s dumb).