This morning's Wall Street Journal [subscription required] is trumpeting the Dow's new record. And my Blogging Stocks colleagues, including Sarah Gilbert, have offered instructive comments. What should investors do about the Dow's new high? My short answer is to profit from the October surprise!!!
As you may be aware, there is a little election coming up in a month. The Wall Street Journal seems to have noticed this. It gave the Dow's new high the most prominent placement -- a chance to change the subject from the Foley coverage, which also landed on its front page. With the public's realization that the House leadership was coddling this pedophile who co-chaired the House Caucus on Missing and Exploited Children, it should not come as a shock that Republican poll figures are tumbling.
Thus, the party in power needs to change the subject fast -- by invading Iran. And you can profit from this October surprise. Why do I think an Iran invasion is the October surprise and how can you profit from it?
Iran has declined the US's invitation for it to stop work on its nuclear program. The party in power believes that its ace in the hole for maintaining its control is the so-called War on Terror. What better way to reinforce that theme than to open up a new front in that war?
Meanwhile several press outlets -- including Time and The Nation -- are reporting that troops and aircraft carriers are massing near the Iran border. Yesterday, the USS Eisenhower Carrier Strike Group left port in Norfolk for the Persian Gulf. The group includes the USS Anzio, the guided-missile destroyers USS Ramage and USS Mason and the attack sub USS Newport News.
Last month, Time reports, the navy issued two orders: The first message: a "Prepare to Deploy" order was sent through naval communications channels to a submarine, an Aegis-class cruiser, two minesweepers and two mine hunters. The second request, from the Chief of Naval Operations (CNO), asked for an analysis of how a blockade of two Iranian oil ports on the Persian Gulf would work.
Here's a key quote from the Time article: "What's going on? The two orders offered tantalizing clues. There are only a few places in the world where minesweepers top the list of U.S. naval requirements. And every sailor, petroleum engineer and hedge-fund manager knows the name of the most important: the Strait of Hormuz, the 20-mile-wide bottleneck in the Persian Gulf through which roughly 40% of the world's oil needs to pass each day. Coupled with the CNO's request for a blockade review, a deployment of minesweepers to the west coast of Iran would seem to suggest that a much discussed-but until now largely theoretical-prospect has become real: that the U.S. may be preparing for war with Iran."
How can you profit from the October surprise? Well, buying oil company stocks is one way. ExxonMobil Corporation (NYSE: XOM), ConocoPhillips (NYSE: COP), BP plc (NYSE ADR: BP), and Petroleos Brasileiro (NYSE ADR: PBR) are a few that come to mind. And with oil prices below $59, the price of a barrel of oil would climb along with these stocks on news of the Iran invasion.
Had enough? Vote in November. And in the meantime, profit.
Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, and a Professor of Management at Babson College. He has no financial interest in the securities of BP, ConocoPhillips, ExxonMobil, or Petroleos Brasileiro.
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Reader Comments (Page 1 of 1)
10-04-2006 @ 12:25PM
Edward Richard said...
I expected an October surprise even before this Foley problem started, but I have to admit I didn't think it would be an unprovoked attack on another country. This would be another war of choice, not necessity. I thought an October surprise would be an attack on Americans here, something that may cost a couple of hundred lives, maybe an explosion or something. A terrorist act that will scare the hell out of everyone. I don't think this administration has to go that far to maintain power, they can do it with just a minimum of violence and a couple of hundred dead Americans, not thousands. Although the profit is not as great, I can't argue that part.
10-04-2006 @ 2:35PM
michael said...
Tehran, Sept. 30, (Agence France-Presse): President Mahmoud Ahmadinejad said Saturday that Iran would not halt uranium enrichment even for a short period. . . He added, "Nobody has the right to make Iran back down from its rights." -
this can't be a good omen
10-05-2006 @ 1:41AM
Jessy Scholl said...
Agreed. There is no way that every American will support a war on Iran, even with an attack on an American City. In fact, a attack on Iran will look like a "Wag the Dog" effort to distract us from the Mark Foley scandal and make it look like the President has something to hide in which he does. If you look at Prison Planet.com or infowars.com and the archived pages dating back to September 29, 2006, you will notice that one of the articles talks about President Bush I & II holding a frequent sex slave party in the White House and even dating back to Ronald Reagan. If Bush goes ahead and attacks Iran, his congressional support is lost and he will be facing impeachment hearings in January.
10-05-2006 @ 11:54AM
Robert Tanne said...
I believe it is not Iran but N. Korea that we must attack first since they already have nuclear bombs and rockets to carry them. That would send a signal to Iran that they have to shape up or be attacked. I think the plan might be for us to attack N. Korea while Israel attacks Iran.
10-05-2006 @ 8:10PM
Mr. noitall said...
Peter, I'm no fan of any politician, Republican or Democrat, but I think you're really letting your anti Bush/Republican bias show in this article. Shouldn't we all expect the Wall Street Journal to make the Dow Jones hitting new all time highs it's top story? It seems like you were surprised by that and expected to see the Foley story be it's top headline. (You're disappointing me Peter, I thought you were sane).
I think even the Republicans know that invading Iran or any other country right now will hurt them in the Nov. elections. I wouldn't expect that kind of surpise. But if it does happen, I hope nobody in Iran has read that article in Time where we basically mapped out our whole battle plan for them to see. LOL