This post is part of a special annual report -- Top Stock Picks '09 -- in which TheStockAdvisors.com asked 75 leading newsletter advisors to select their favorite investment for the new year.
As his top idea for 2009, fund expert Doug Fabian eyes Powershares DB Crude ETN (NYSE: DXO). In his Successful Investing newsletter, he looks at "an aggressive fund" that moves double the underlying index.
The advisor continues, "I like oil at its year-end 2008 bargain prices. One way to invest in oil and ride its likely rebound during 2009 is to buy the PowerShares DB Crude ETN.
"This is a two beta or double long exchanged traded note. This is an aggressive position and should only be used with more speculative capital.
"In late 2008, oil was trading 60% below its 200-day average, a very rare occurrence. Indeed, oil has fallen 70% from its 2008 highs.
"DXO seeks daily investment results, before fees and expenses, which correspond to twice the daily performance of the Dow Jones U.S. Oil & Gas index. If the Dow Jones U.S. Oil & Gas index moves up 2%, DXO will gain 4%. This ETN could recover strongly in 2009."
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Reader Comments (Page 1 of 1)
1-21-2009 @ 2:39PM
buzz said...
What is going on with dxo today? Oil is up over 6% and DXO is flat.
1-21-2009 @ 8:47PM
Fred Bullett said...
I don't think he is correct. It does not follow the US Gas and Oil Index in fact read the DXO prospetus and even look at the daily movement and I think what you are saying is not correct. I certainly wish you were but I am not going to follow this advice.
1-22-2009 @ 8:27AM
Joe said...
I have been invested in DXO and UCO both double long on the price of oil. DXO has underperformed both the price of oil and UCO by a large margin. Yesterday the price of oil (OIL ETF) was up 7.87% and UCO 2X the price of oil was up 15.14% and DXO was up 2.42%. DXO either has a incorrect model or someone is stealing!! I am getting out of DXO completely and using UCO which tracks OIL just about 2X as advertised.