[waveNRG]

Many of us here agree to the certainty and inevitability of a shortfall of oil supply in meeting demand over the coming years.
Many of us here say that economists have it all wrong and that the economic system is fatally flawed, possibly that it helped get us in this mess and that it can't react to the impending challenge. I don't agree with this myself.

Here's an idea that might demonstrate my faith:

I don't know who the administrators of the peakoil.com group are but if they read this:
Can we organise a "Peakoil.com" investment fund?

A) Talk to the bank and organise an oil futures investment portfolio and publish the details online. Make it simple ....we will have a lower limit price below which we sell (say 35$ / barrel) to cut losses and an upper limit above which we sell (say 100$ / barrel milestone) after which the fund is recovered and redistributed per C below.

B) Organise an on-line payment mechanism whereby members can contribute to the fund with a credit card (say minimum $10 or something and there may be some tax or handling charge) before a given deadline after which the investment is made.

C) Once the sell happens, the payee receives 90% of his entitlement with 10% being invested in an alternative energy company voted for online by Peak Oil members. This smaller portfolio will then be managed by the Peak Oil administrators as they wish from that point on and they collect the profits.
Give contributors who object to the principle of a free market the option to have all profits above their original investment (corrected for inflation) reinvested.

D) Start another investment fund for the 150$ milestone and keep on going!


The effect:
It may well prove a good means to promote Peak Oil.
We get a profit if we are right about Peak Oil.
We are investing in Alternative Energy.
Peak Oil administrators get a fund to reward and expand their work.

I'm in with $100 if it can be set up with integrity.

[Jack]

Umm...I cannot speak for Europe...but with regard to the U.S, the regulatory overhead would be painful. Just the expense of audited financials would be daunting.

Some sort of investment club scheme might be cobbled together, but with the international flavor of our group, I shudder to think of the challenges.

[waveNRG]

Yes perhaps.

However, if the payments were donations to Peak Oil and Peak Oil handled the investment as a single party?

Then donate back ...up to the individuals to handle tax in their own countries. Perhaps that's bordering on illegality ...I don't know.

[Hegel]

There are at least 5 Peak-Oil Funds available in Germany I know of. I wouldn't invest in any of them. The great "Oil Rush" of 2004 is over. From now on it's like the i-net bubble, house-wifes sharing their NASDAQ-knowledge at cocktail-parties with each-other.

Never-the-less, good luck!

[gt1370a]

Too risky. I'm not convinced that demand will remain strong.

-Delta and Northwestern in bankruptcy
-Delphi in bankruptcy
-Ford and GM laying off 30,000 each and closing plants
-general trend of cancelling benefits/pensions and reducing pay; hence less disposable income for consumers
-Americans already spending more than they take in (negative savings rate since August)
-housing bubble on the way down
-central banks buying gold means I'm not the only one who feels this way

Somethings gotta give.

[MrBill]

No, I would not invest in this fund or this concept. I do not believe that any members of peakoil.com have the financial expertise to run such a fund on a day to day basis and make the necessary investment decisions in competition with professional fund managers.

Plus, $100 is not putting your money where your mouth is. Changing your lifestyle, selling your car, selling your house and investing in alternative energy is putting your money where your mouth is.

An offshore investment fund may cost as little as $10.000 to open, but then you have ongoing expenses to run and manage a fund. If you have more than 51 investors then I believe certain rules apply as it becomes a public fund. Especially, if open to US based investors. $100 x 51 = $5100. Not even enough to cover the cost to open a fund. As retail banks have found, cheques for $10-15 cost more to process than they are worth. That is why most fund have minimum deposits and minimum lock-up periods.

If you think oil is going to $100 a barrel then for as little as $5000 you can own one contract on the NYMEX or ICE and if you are right you will earn up to $40.000. You can then invest that money however you like. Go for it.

[GoIllini]

$this->bbcode_second_pass_quote('waveNRG', 'Y')es perhaps.

However, if the payments were donations to Peak Oil and Peak Oil handled the investment as a single party?

Then donate back ...up to the individuals to handle tax in their own countries. Perhaps that's bordering on illegality ...I don't know.

[Aaron]

I will happily accept all "donations" to this new fund with the understanding that we won't be returning it... ever.

You will get a rich dividend of warm fuzzy feelings however, watching your world melt down and knowing that you tried to help.

Plus the added bonus, if you donate today, of knowing that even billionaires won't be immune to depletion no matter how many peak oil islands they think they own.

In addition, the first 1,000 donors will receive an automatic commissioned post as an officer in my Reaper Squad. (assuming you survive our "circle of death" initiation ceremony of course)

[sameu]

I think it's a great idea
We all know that the price of oil will only go up. Worst thing that can happen is a more or less demand destruction and that the oilprice won't go up. But I believe it will not go down.
If we find enough investors it must be possible to do this.
And the amount of money is up to you, if you want to invest 100$ or 1000$ why not.

Either way, I'm looking for other options to invest my money in oil.

[GoIllini]

$this->bbcode_second_pass_quote('sameu', 'I') think it's a great idea
We all know that the price of oil will only go up. Worst thing that can happen is a more or less demand destruction and that the oilprice won't go up. But I believe it will not go down.
If we find enough investors it must be possible to do this.
And the amount of money is up to you, if you want to invest 100$ or 1000$ why not.

Either way, I'm looking for other options to invest my money in oil.

[sameu]

do elaborate
this mutual fund investing in stock
how would this work
stock of oil company's?

[GoIllini]

$this->bbcode_second_pass_quote('sameu', 'd')o elaborate
this mutual fund investing in stock
how would this work
stock of oil company's?

[MrBill]

$this->bbcode_second_pass_quote('', '1')0% Uranium producers and nuke-heavy utilities
20% Integrated Oils
20% Oil Producers and Drilling Companies (We can avoid Halliburton if people have strong objections)
20% Renewables
20% Coal & fossil-fuel technology (including CTL, LNG, and tar sands)
10% Energy-conserving substitutes, such as railroads.

[GoIllini]

$this->bbcode_second_pass_quote('MrBill', 'T')he problem is that many of these types of companies are already trading at significant multiples of earnings already. The contrarians and value investors picked them up between 1999 and 2001. The momentum investors snapped them up in 2004. And 2005 has been a feeding frenzy with some shares up 50-75% this year. This becomes a little like the dot.com bubble. Sure we all know the technology is useful, but you also have to make money by buying low and selling high. I think an energy mutual fund or mutual funds containing those sectors you mentioned would be a good investment over the long haul. However, in the short-term due to demand destruction we may see energy prices and therefore energy companies much cheaper this time next year. In any case, good luck.

[MrBill]

Sure there are always bargains to be had somewhere if you look hard enough. The Nikkei was up some 35% this year at one point this week, the Swiss index is up 31%, the Mexican index is up 39% and some emerging markets rich in mines, minerals and energy are doing even better. Just takes time, energy, patience and some degree of luck to unearth them.

I got pretty keen on BASF which is a German chemical co. which explores & refines its own gas & oil as well as is a partner with Russia and E.On to build a new pipeline under the Oestsee to Germany from Russia bypassing the Baltics, Poland and the Ukraine who demand transit fees. I thought it would be a natural. The P/E is only 11.5. However, I see that the one year return is 27% and it is trading at EUR 63.45 vs. its 52-week high at 64.60. It has more than doubled from EUR 30 in 2003. Is it good value? Probably in the long-run, yes. In the short run, although the P/E is still attractive it looks like a good investment yesterday.

I don't find P/E's of 17/18 very cheap when I see Citigroup trading at 12.5%. They are likely to be winners no matter where energy prices go in the next 12-18 mos.

So yes, there are always underpriced value stocks to be had for the dilligent investor. However, I can probably get exposure to higher commodity prices and dearer energy by investing in any number of the commodity indices like Goldman Sachs Commodity Index (+30% YTD) or others who have performed well in the past 2-3 years, but look expensive today.

In any case, not trying to be a downer. Good luck.