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The Importance of Stock Picking, Illustrated in Oil

Posted on May 12, 2008

If a commodity is hot, stocks of companies that deal in that commodity should be hot as well, right?Well, not necessarily so. To be sure, energy shares have outperformedthe stock market indexes during the recent period of oil pricestrength. Take a look at relative performance of two energy shares, Exxon and Valero Energy(XOM, top chart; VLO, second chart) vs. oil itself (DBO). Fromthese charts (kudos to the MSN Money site), it's clear that the stocks have greatly underperformed the commodity.(Click charts to enlarge.)...

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