The oil stocks are experiencing one of the great bull runs of the year. I just wish that you could say the same about crude. You get an 8% run in crude and you give every little flotsam-and-jetsam oil company -- a Resolute Energy (REN) , a Whiting Petroleum (WLL - Get Report) , a Marathon Oil (MRO - Get Report) -- the go ahead.
Does this make sense?
Only if it turns out that these stocks were reflecting bankruptcy and now they are reflecting oil going to $60.
I don't think that's a go. We have seen a moderate pickup in demand. We have seen no decline in supply of late. So the idea that we can ramp through $50 without some exogenous event seems fanciful.
I don't want to short these stocks. In fact, I think that Occidental (OXY - Get Report) and Schlumberger (SLB - Get Report) are buys, as seen by the fact that they both are part of our Action Alerts PLUS charitable portfolio.
I am just amazed that no one is downgrading these stocks on valuation based on the fact that the stocks have gotten ahead of themselves if, indeed, oil stalls here.
I say don't chase.
If Carley Garner is right, they are all a better sell than a buy right now, and I think she's bankable on this overstretched move on crude.
Random musings: I'd like to call attention to a handful of very good stories on our site. They include a Fill and Kill piece by Tony Owusu on Dave and Buster's (PLAY - Get Report) , a James Gentile piece on National Oilwell Varco (NOV - Get Report) , a piece by James Passeri on private equity and valuation danger zones, and Anders Keitz' piece on Vonage (VG - Get Report) . Check them out.
Editor's Note: This article was originally published at 4:25 p.m. EDT on Real Money on Aug. 16.