Up/down, buy/sell, gloom/boom: It’s not easy to be a long-term investor

Take the long view

The stock market is fixated on the short-term, we all know that. It’s an unusual occasion when stock analysts and investors look more than a few quarters ahead. That means stock prices often tend to respond to short-term news as if it were the only news.

And that means investors with a long-term view of companies and economic trends can often buy likely long-term winners while they are temporarily depressed by short-term news. This kind of long-term thinking in a short-term market is one of the best ways I know of for the average investor to beat the stock market indexes.

In pursuing that kind of strategy, however, too much caution is actually a bad thing. Let me explain—and give you some examples of stocks and sectors where taking the long view will pay off. Read more

Buy Statoil Hydro (STO)

Norway’s next oil frontier just got a little closer–and there’s only one stock to play it.

I don’t follow Norwegian politics very closely so you’ll have to forgive me if I’ve been a little slow on the uptake.

The re-election of Norwegian Prime Minister Jens Stoltenberg on September 14 moves the country a little closer to opening the oil-rich but environmentally fragile Lofoten Islands to oil and natural gas drilling.

In the country’s general election parties that favor exploration and production in Norway’s share of the Arctic waters including the Barents Sea added seats. The government is still a coalition with a fragile majority so no one expects quick movement on the contentious issue of drilling in this area, one of the most pristine in Norway. But with Norway’s management plan for the area–which is currently out of bounds for drilling–up for review in early 2010, the odds are that Norway will get more aggressive in exploiting the potential reserves in the waters of the Arctic continental shelf. On the latest numbers a majority of voters are not opposed to drilling in this region.

And the prime beneficiary of any expansion of drilling in the area will be Statoil Hydro (STO), Norway’s national oil company. Read more