IBD gets the facts right, but misses the point

A recent editorial from the Investor's Business Daily argues:

The greatest impediment to oil discovery and recovery is government. Great swaths of onshore and offshore oil resources have been placed off-limits by our government. We don't even really know what we have — and what we know is there, we can't get at.

This just shows it is possible to get all the details right and still draw an absurd conclusion.

National oil companies may be inefficient piñatas but there is no way this is going to change. The potent mix of nationalism, populism and patronage is a near unbreakable iron triangle. Mexico should be the test case. They seem willing to turn into net importers of petroleum products rather than go to market mechanisms with foreign investment.

The green phobias of the US urban electorate may similarly be irrational but they are a political fact of life. If a Republican President with Republican majorities in both the House and Senate couldn't open up the North Slope, what other set of political facts will do the trick? If California going de facto bankrupt couldn't get production restarted in the Santa Barbara Channel, what will?

So while there theoretically may be more oil, the issue of whether there will be effective supply in 10-20 years is quite real.

To Sell or Not to Sell in May

These are all from Bloomberg.

August 4, with the headline, "'Sell in May' Fails as MSCI World Rallies 19%"

Global equity investors who follow the Wall Street axiom to “sell in May and go away” are missing out on the biggest gains in at least four decades.

May 1, with the headline, "'Sell in May' Strategy in U.S. Stocks Seen as Prudent This Year":

"Sell in May and go away'' became a Wall Street axiom two decades ago, thanks to the Stock Trader's Almanac. The strategy may be more compelling than usual for U.S. stock investors this year, according to its editor.

May 4, with the headline, "'Sell in May, Go Away' Unwise This Year, UBS Says":

U.S. investors should stick with stocks and ignore the axiom of “sell in May and go away,” according to David Bianco, UBS AG’s chief equity strategist.

No Arbit commentary is needed.