Higher Gas Prices are a Good Thing?
One of the benefits of contributing to the Kerry campaign are emails with current news on hot economic topics – often serious and fair&balanced unlike those biased Bush-Cheney cartoons. But last week, the Kerry camp had this silly cartoon called the “Oil House”. It points out how top White House officials – including Bush & Cheney – are friends of the oil industry and then ends with a suggestion that the White House believes “Higher Gas Prices are a Good Thing”. But the email has some useful links. For Californians like me, it informs me that I’m paying $2459 a year for gasoline, which represents a $930 increase.
Andy Serwer on American Morning this week talked about oil stocks as a hedge and I own 200 shares of Conoco-Phillips stock. Yahoo/Finance points out that I’m getting $7.17 in earnings per share. Conoco-Phillips operating profits last quarter alone were $3.11 billion as compared to its annual operating profits of only $2.8 billion for 2002 (profits in 2003 were $9.14 billion for the year). My math tells me that my ownership of 200 shares means my increase in earnings just barely covers my increase in gasoline prices. And I’m lucky enough to have a stock portfolio and an advisor who adviced me to buy this stock. Now if I had only listened to her when she told me to buy more and I had not traded in that subcompact.
But to buy more stock hoping to make a speculative profit assumes oil prices will not go down, which Tom Nugent at NRO says otherwise. But wait Stephen Moore says oil prices are not so high. Let’s see what their colleague Don Luskin has to say. Wait, he is only misrepresenting (once again) what Paul Krugman wrote here. But Dr. Krugman’s article is a very good read. So is the latest (More on Oil) from Political Animal.
Enjoy the weekend.