Business

The problem inside Qantas

The problem inside Qantas

And so a new quarter begins in the financial world, just as my time here at The Daily Reckoning Australia winds down. One week to go!

This time next week, I’ll be penning the first official issue of my new service, Profit Watch.

You’ll not hear from me here again. I’m a bit wistful about that — I’ve been writing for the DR since 2012.

But the new gig is going to be fun, for both of us I hope.

It’s 100% free.

And hey, I get it right every now and again.

I’ve been pounding the table about oil going up all year, and it hit another high last week. We’re on track for now.

Analysing oil brings a bit of dilemma. It’s nice to make a correct forecast, but I wish it wasn’t so every time I fill up the car.

If you want a chance to get some of that expense back, scooping up a great junior oil stock right now could be a great way to go about it.

Oil is ‘only’ US$82.

That figure counts if you’re an American.

For us Aussies, oil is well over $100 a barrel now.

Go long oil stocks and avoid Qantas

A rising oil price is a cost to the economy. The only winners are stocks in the energy business and governments that live off oil cash.

However, it does show the point I’m trying to prove with the move to Profit Watch. Even when there’s bad news for the economy (high energy costs), there’s an opportunity to profit from it.

As above, look at oil stocks!

You can also consider shorting or avoiding businesses that are hurt by this situation.

On 1 June, I suggested oil could kill the Qantas rally.

I haven’t really checked in on this since.

Let’s take a look now.

At the close of business on 1 June, Qantas’s share price was $6.38.

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