Blog : Oil, Biotech, and 10 Stocks Under $1

by Peter Leeds on October 6th, 2014

= The Quick Fix is coming out a week from Wednesday.  10 Stocks, all Undervalued, Undiscovered, and Under $1.

= This week's Hot List pick is a biotech with more cash on hand than their trading price.  They are a huge takeover target, and recent events have put the shares at a deep discount to their value.  Log in to PeterLeeds.com after the market's close this Wednesday to view the full report.

= Oil prices have been sliding.  This is partly due to a decision by Saudi Arabia to keep cranking out supply, rather than to curtail crude sales.

However, as they continue their slide, certain things will happen over the long term to curtail the price weakness:

1.  Marginal wells will be forced to shut down, as lower prices make their operations less feasible.

2.  Exploration for new finds will be put under pressure and slowed or cancelled.

3.  Oil will increasingly become a fuel source of choice, since the lower the prices go, the more it gets used over coal, solar, wind, and hydro electricity (thus increasing demand).

4.  Other OPEC nation states will be increasingly concerned, and more likely to fight to curtail production.

5.  Cheap oil means a tax cut to most people, and a boost to most businesses.  This will increase demand, as corporations are able to spend more, and use more.

In the end, oil will continue to slide in the near term, but long term the prices always recover.  Oil will never go to zero, it will find a bottom.  Whether that low is at $70 a barrel, or $88 a barrel, remains to be seen.

However, typically a bottom in anything is around when the media covers the story very actively.  Like now.

Disclosure:  Peter Leeds has personal investments in oil-related investments, such as 10,500 shares of UWTI, and 10,000 share of HERO.  He made trade these positions at any point.