Instinctively we sense a potential two-thirds gain in stock price for our oil and gas buy recommendations by November 2008. It actually happened at a similar time 28 years ago when our twenty buy recommendations gained a median 68% from April 30, 1980 through November 30, 1980.

Like today, most of those stocks were already in a steep uptrend after having scored handsome gains. Like today, 1980 was an election year, oil price was advancing strongly, Iran was the U.S. Government’s nemesis and inflation was raging. Unlike today, the U.S. Federal Reserve Bank was raising interest rates that ultimately drove the stock market and oil stocks to the low of August 1982, in the second year of a new president’s term.

We believe the historical parallel justifies maintaining and possible increasing commitments to our buy recommendations while keeping a wary eye out for signs of a peak should steep increases actually occur. Finally, good news for energy in 1980 was also good news for stocks as the S&P 400 Industrials advanced 34% during May through November.

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Kurt Wulff

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