The Hurricane Threat

May 28, 2008

Did you stay home this past Memorial Day weekend because the price of gas was too high? If so, you're not alone. I'm pretty sick of seeing those roadside signs climb above $4, too. But I have to warn you that if 2008 turns out to be a rough hurricane season like many are forecasting, you'll think the current moans and groans are a day at the beach.

After supply problems caused by Hurricane Katrina a few years back, any prediction of a storm sweeping toward the oil refineries on the Gulf Coast causes traders to start boosting prices. And if the storm makes landfall and wreaks havoc, you bet we'd see a hefty premium at the pump for a while! The 2008 Atlantic hurricane season, which begins on June 1, is predicted to have 12 to 16 named storms, including six to nine hurricanes. Up to five of those hurricanes will be at least a Category 3 storm. (READ MORE HERE). Of course the weatherman's estimates could be too high or these storms could occur away from crucial oil infrastructure in the Southern U.S., but the market is already on edge. A global crude crunch is making investors fear the worst this hurricane season.

There are some people who say the soaring cost of oil is bound for a reversal soon, but I personally think such "bubble" predictions are poppycock. From potential hurricanes to OPEC to a possible decline of new crude sources known as "peak oil", the factors impacting the price of crude are too varied and complex to be resolved anytime soon.

There's no doubt the market in general has been taking a beating lately, thanks in large part to the oil crisis. But some sectors have been hit worse than others, and some businesses are even profiting from the current environment. The smart investor will pull out of the most at-risk industries and put his weight behind emerging market leaders. That's just what my Blue Chip Growth portfolio does! For instance, I tipped off Blue Chip Growth subscribers to the potential of oil exploration and recovery firm Transocean Inc. (RIG) a year ago, and those who invested are enjoying returns of more than 60%!

It's true that prices at the pump probably are still on the way up. But the good news is that this unique environment will energize a handful of companies in specific sectors, and provide savvy investors an opportunity to cash in. Want to learn more? Just CLICK HERE to learn more about the proven success of my Blue Chip Growth  investment service.