[GoodnessOfWheat]

Hi,

A bit of background on me: I'm 22 years old and studying business at university, and have been learning about PO for about a month now. While I'm still not convinced that PO will be the totally cataclysmic event that many people on these forums advocate (although that is a distinct possibility), I have no doubt that it will bring many challenges and hardships. With that in mind, I feel that it will be very important to be financially well off so that I'll have the resources to be better prepared for what is to come. Please keep in mind that I'm talking fairly short term, ie next few years, before any real chance of a collapse of our financial systems.

Anyway, about 10 years ago my grandparents started up some mutual fund investments for my brother and I. These have done fairly well, and I have a significant amount of money to play with. Within the next couple weeks I will be meeting with a financial advisor to decide what to do with the money. PO has heavily influced my thinking in this area, and I've come up with a few ways to invest the money.

1. Put it directly into oil futures. No one really talks about doing this, but I assume that the regular investor out there such as myself can do this. It seems like the most obvious choice, as if the price of oil goes up to the $105 as suggested by Goldman Sachs I'll double my money pretty quick.

2. Invest it into oil companies. Also quite straight forward, I just worry about the stock prices taking big hits if / when the companies have to restate their recoverable reserves (such as Shell did awhile back). A lot of people are making some good money in this area though.

3. Put it into gold / silver / precious metals. I see the logic behind this
(as investors want to safeguard their $$$ during turbulent times), I just don't know how the returns would compare to the other two options.

So those are some ideas that have run through my head recently. Any thoughts / ideas for alternatives would be much appreciated. Thanks!

-Taylor

[BW3]

http://www.peakoil.com/fortopic3224-0-asc-0.html

[tdrive]

$this->bbcode_second_pass_quote('', 'I') have a significant amount of money to play with

[lorenzo]

Buy plantation rights in Africa or Latin America, plant oil crops, and export biodiesel. By 2010 you're a millionaire.

[GoodnessOfWheat]

- BW3, I was looking for a thread like that one but hadn't been able to track one down, so thanks It's gonna take quite some time to digest everything there.

- tdrive, I went to Vegas when I turned 21. Loved Cirque de Solei, didn't get along so well with the gambling! Good point about the hedging, I obviously have a lot more research to do in this subject area.. glad I posted this in the basics forum, haha.

- Not a bad plan lorenzo; I think I'd rather stick to something a bit closer to home though. I'm going to do some research into companies developing new forms of solar power, nanotech, etc. Don't know how much luck I'll have.. but I figure it's worth a shot anyway.

[thegrq]

I'm not an investment banker or anything of the sort, but I'm split on what may happen because high oil prices obviously hurt the economy as they act more and more like taxes on US citizens. Alan Greenspan spoke about this about how oil rpices act as taxes about 2 weeks ago now. On the other hand, the whole world is hooked on oil and it's a fairly inelastic good and demand for oil doesn't change all that much with high oil prices sooo, the oil companies stand to be making lots and lots of money (I beleive this was talked about in the documentary "The End of Suburbia"). So, I don't know. I have a gut feeling that countries who have oil, like Canada, Russia etc, will be better off because they get to choose who they can sell their oil to. For instance, Canada has (or at least is going to) sell about 40% of its oil to China. It might just be my conspiracy theories here but I think that they did this so that they either 1) drive up the price of oil in a bidding war between the US and China which would benefit Canada but not necessarily the US or China or 2) so that they have more political sway in the world...probably a bit of both.

So, my somewhat un-educated opinion is that pople should try to move their money out of the US because of the high oil prices and try and move it into countries that have the oil...but that's easy for me to say because I live in Canada.

[mistel]

GoodnessOfWheat

I have traded futures on and off for about 15 years, read shelves of books on the subject, spent thousands on software, flow internationally to attend seminars, and I can tell you it is a very tough way to make money. Do not put your money in futures, it is a very quick and easy way to loose it all. I can tell by your first statement that you don't understand the enormous leverage invovled in futures. I dont want to blunt your enthusiasom, I just offer this advice from years of hard won knowledge.

[Yossarian]

Check out "The Oil Factor"

peak oil book reviews

[goldmund52]

$this->bbcode_second_pass_quote('GoodnessOfWheat', '
')
1. Put it directly into oil futures. No one really talks about doing this, but I assume that the regular investor out there such as myself can do this. It seems like the most obvious choice, as if the price of oil goes up to the $105 as suggested by Goldman Sachs I'll double my money pretty quick.

2. Invest it into oil companies. Also quite straight forward, I just worry about the stock prices taking big hits if / when the companies have to restate their recoverable reserves (such as Shell did awhile back). A lot of people are making some good money in this area though.

3. Put it into gold / silver / precious metals. I see the logic behind this
(as investors want to safeguard their $$$ during turbulent times), I just don't know how the returns would compare to the other two options.

So those are some ideas that have run through my head recently. Any thoughts / ideas for alternatives would be much appreciated. Thanks!

-Taylor

[tdrive]

$this->bbcode_second_pass_quote('', '.')..put $50,000 (or a little less, maybe $35000) into the account. When the market pulls back enough to wash out some of the non-commercial long positions, you buy a contract and sit on it....

[goldmund52]

$this->bbcode_second_pass_quote('tdrive', '')$this->bbcode_second_pass_quote('', '.')..put $50,000 (or a little less, maybe $35000) into the account. When the market pulls back enough to wash out some of the non-commercial long positions, you buy a contract and sit on it....

[tdrive]

$this->bbcode_second_pass_quote('', 'A')re you currently buying energy stocks because you think they are undervalued?

[BlisteredWhippet]

I think the best allocation of your resources if you're of limited means is to invest in yourself an education that might actually provide a livable, sustainable existence in whatever post-peak scenario you envision.

The point being, what are you going to do? Think about that. If Peak Oil defines our future then you'd be in a better situation if you prepare now. If you just want to get rich- think about that functionally.

Why do you want cash?

Some people have invested in agriculture, energy technology, land, education in applied biology.

Some people have invested in guns, gold, cars (which I like to call "escape pods").

If you're thinking that you're going to need to "get out" of where you are because its going to be bad, or have no future, cash is nothing but buying an escape pod.

Young people with no or little assets have really less to lose than people more invested in the system. I think being realistic is important. Vegas is not realistic. In fact Vegas is a big fat dead end:



If you want to survive, you need to learn how to survive. It might be frustrating, but you can't be trained in that discipline through the regular institutional channels.

Good luck.

[DavidProvost]

Invest in something that is going to be worth alot more money once Peak Oil is a huge issue effecting everyone. You could easily triple your money.

[tdrive]

$this->bbcode_second_pass_quote('', 'I')nvest in something that is going to be worth alot more money once Peak Oil is a huge issue effecting everyone.

[Revi]

I really couldn't figure out what to invest in, so I am buying useful land and silver coins. I am also putting solar panels on my house and buying a new maple syrup evaporator. These are things I can count on. Conservation is the best investment I can think of. We changed a few things on our furnace and saved 1/2 of the electricity to run it. So far these are the only worthwhile things I can think of. I would like to buy a hay field, but I don't have the equipment to hay it, and can't think of how to make it pay in the interim between oil culture and hay culture. I hate watching the dollar shrink, but am thinking that it makes sense to have around a years worth of cash in case I lose my job. That's my financial plan. Hope for the best, expect the worst. If I had more money I'd buy a farm with around 100 acres tillable and 100 acres of woodlot. As it is, I plan on getting a real estate license and selling useful land. I plan on doing what I can locally. I would like to invest in a few scholarships for kids who look like they are going to do something useful.

[bobcousins]

If TSHTF, there is no point having anything that can be stolen, appropriated, or has no intrinsic value anyway. So that rules out everything I think. In that scenario only practical skills or knowledge you have would be useful. e.g. organic farming, metalwork, firearms.

If not (TSHTF) then gold is probably ok, as everything else will be worthless.

One thing we won't run out of is stupidity and greed, so any way to exploit that would be good. Maybe selling Peak Oil Disaster insurance, or shares in abiotic oil companies.

[neontetra]

I'd prefer to have my money in a commodity index than in any one future. My strategy is to always be long 1 goldman sachs commodity index future. this is 70% energy, and it is down right now, with the current slump in oil. I'd buy another if I had the cash. Oil will appreciate, but so will most other commodities generally. With the index, you have diversification.

As for stocks, I like Canadian oil companies, and Portash Corp, also Canadian. first of all, I think the Canadian dollar will continue to appreciate against the US dollar. the CD is natural resource based. If you buy Canadian companies, in ADRs which can be bought on the NYSE, you benefit when the CD goes up in value against the dollar. Oil stocks look good, but you have to buy those oil companies that actually have oil. Most oil is now controlled by national oil companies, like Aramco (Saudi Arabia), the Mexican oil company, the Norwegian oil company. But Canada does lease it's oil and gas properties to its own public oil corporations. Plus it is a safer, more stable country than many oil exporting nations, and it is convenient to the 2 biggest oil markets.

The 2 companies I like best are Imperial Oil, and Petro-Canada.

----------------------------------------------------------------------
Neontetra
peak oil, global warming and investment blog:
neontetra.blogspot.com

[JoeW]

$this->bbcode_second_pass_quote('goldmund52', '
')2. I think that the big problem with energy stock is that they are presently fully valued or over valued. If the broad stock market tanks badly the energy stocks will drop like a rock until their PE's are more realistic, even though the companies will be churning out profits.

[neontetra]

the problem with a lot of oil companies is that they are unable to maintain production. oil companies have to invest vast sums in drilling and production rigs. they expect to pay off this investment over the lifetime of the oilfield, but things don't always work out so well. sometimes there is less oil than they had hoped.
A lot of oil companies that look very cheap have been beaten down because they were unable to maintain their production targets. A high price for oil can also hurt an oil company: if a company like Chevron has a lot of gas stations that it has to keep supplied with gas, and slowing upstream production, then they have to buy oil on the market and it will cost them big bucks.
I'm not speaking for or against Chevron, I am just saying some of the things I look at in an oil company's annual report.