Think Fast!
You’ve got your hands full – of books, papers, dishes – and someone, with let’s say a tennis ball, says “Think Fast” as they pretend to toss the ball to you. You jump in response. This sophomoric gag gets a laugh from one side, a rebuke from the other. Sound familiar? This game was much more prevalent when our sons were much younger and they loved to “get me.”
Traders play this game too. A traders’ version of Think Fast happens when information is being released by a company and traders react by trading the daylights out of the stock. Trade first; think later -maybe – and move onto the next trade. It’s a trader’s game but one that long term investors can be impacted by if you let them “get you.”
Another version played lately is the release of oil from the US Strategic Petroleum Reserve (SPR). The current administration in Washington announced June 23rd that they were going to release 30 million barrels of “sweet crude” oil from our reserve to help ease the stress on oil supplies due to the Libyan crisis. The US, along with 27 other countries, will release 60 million barrels into the international market in hopes of replacing some of the estimated 140 million barrels of production lost by Libya due to their “conflict.”
Tapping our reserves has only happened 2 other times since this 727 million barrel reserve was created in 1973; 20 million barrels were tapped in 1992 during the Gulf War and 11 million barrels released in 2005, post Hurricane Katrina.
Is this a sophomoric political game of Think Fast that has campaign 2012 all over it as some suggest? Or, is this a well thought out long term strategic move that will help the US economy – by lowering the price of gas at the pumps, ramping up jobs, manufacturing, etc.?
Think Fast – Gotcha!
