Investing For Post Peak

RobRoy · Coal Joined: Mar 09, 2005 Posts: 1

Post Peak Questions, I have been reading a lot about Peak Oil latetly and have seen oil prices esculating lately. I am a bit concerned about what effects this may have for the economy from an investment point of view.

Not having an economics background I am interested what the course of events will be.

Will we see run away inflation up to %300 like what Russia, Argentina, Turkey experienced when their economies collapsed or would we see stagflation?

Of course esculating oil prices would cause produce etc to increase in price but would this go for everything.

Should you have assets tied in shares that are tied to the oil industry or in land or cash.

If your assets are in cash and have run away inflation your cash would not be worth the paper it is written on.

Would shares tied to the oil industry keep pace with inflation?

I can imagine land would be very valuable come post peak as produce esculates in price. Would this be the case?

Could you economists out there give me some insight into what the turn of events would be?

bruin · Posted: Wed Mar 09, 2005 5:31 pm Post subject:

Invest in Canadian oil firms digging through the tar sands.

If you like the US, try Greywolf (GW) or Marathon Oil (MRO).

bobbyald · Posted: Wed Mar 09, 2005 5:45 pm Post subject:

Try Gold
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JBinKC · Heavy Crude Joined: Aug 14, 2004 Posts: 251

Well according to the data on CNBC a $10 increase in the price for a barrel of oil effects the economy by a minus .5 to a minus .75% in growth. I thought that was an interesting statistic. Projections of $80/barrel will lead to an economic recession at the current growth rate.

Usually not very many stocks do well in a recession. You are much better off selling short or look for funds that sell short like Prudent Bear

My favorite currency is the ruble not the euro. Russia oddly enough already has a budget surplus thanks to a high oil price. They have a very high excise tax for oil exports when prices are over $25 a barrel and the country is still showing a rise in output.

Stocks: nothing is different I have had my most success finding big winners by looking for companies with a low share float, low relative valuation on a PE and accounting basis and sequentially rising sales and earnings or companies trading below its free cash per share and then monitoring the business for a negative development before the potential earnings disappointment hits. Trust me it is lots of work. My favorite super conservative stock is Muana Loa Macadamia Nut LP ticker: NUT. Trading at below book value and that book value is based upon Hawaiian land prices in 1986 in addition, the company renegotiated a pricing contract which is 85% higher than FY2004 for 2005. I project a higher payout at a rate somewhere between 40 to 60 cents a unit per annum 18 months from now.

An interesting potential investment to look for is an oil ETF based upon the futures commodity price which is supposedly in the works.

cmlek · Posted: Mon Mar 14, 2005 12:34 pm Post subject:

Invest your money in land. Invest your time in finding good friends and a good community to share. From there, your options are open.

RIPSmithianEconomics · Posted: Mon Mar 14, 2005 1:33 pm Post subject:

fossil_fuel · Heavy Crude Joined: Jan 03, 2005 Posts: 408

is there any way to buy oil futures if you only want to invest a limited amount, say US$1000? all the futures trading brokerages i've found require like $10k to set up an account.

mjpete · Tar Sands Joined: Feb 25, 2005 Posts: 43

Does anyone know of a mutual fund that would be well positioned for PO. As I see it, the fund would be invested in companies likely to see increases when the price of oil increases, as well as companies developing oil alternatives and renewable energy. It might also be invested in companies that profit during a recession, like pawn shops and repossesion companies. Anyone know of something like that out there?

Arkwright · Tar Sands Joined: Jan 01, 2005 Posts: 89 Location: Finland

Other view, when dollar crash and everything gets for sale, what are a good items to buy from them? I learned from Russias crash that Pianos were good - they sold for ridiculous price compared to their value and are wanted luxury in countries with better economy - and after economy starts to recover. Though exporting things from USA is way trickier than from Russia. Any other ideas? Smile

mortifiedpenguin · Heavy Crude Joined: Oct 15, 2004 Posts: 119

Gold and silver are the best choices. They are the only two forms of money that have always been used through mankind's history.

Owl · Coal Joined: Mar 16, 2005 Posts: 11 Location: Montreal

Read Stephen Leeb's Book on investing in a Peak Oil Economy, very sensible. Myself I bought shares in Canadian Oil Companies, Petro Can, Talsiman, Encana, Imperial Oil.

Leeb says to put a certain % in gold, coins or gold mines.

He is saying inflation is certain but if oil goes up I think it was more than 80% in one year deflation could occur, i.e. people dumping their houses, people laid off work, so be prepared to shift your portfolio.

I also think you could buy small farm acreage near smaller towns away from cities.