Archive for July, 2007

The Driving Force Behind’s Oil’s Next Surge

Saturday, July 21st, 2007


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What can and could be the driving force behind oil’s next surge. In the end the oil market is a dynamic with Russia , with its vast oil, diamond and gold reserves that is the missing card.

The supply chain from the oil well has never been tighter. The International Energy Association sees global oil demand totaling 86.1 million barrels a day ( bpd). That implies year over growth in oil demand of 2 %. The world suppliers ( OPEC supplies 40% of the world’s oil) are currently producing 85 million barrels per day.

Spare petroleum capacity according to the IEA , is capacity that can be turned on for 30 days and sustained for 90 days.

A comfortable level of spare global oil capacity would be five or six million barrels per day. Recently that number has been less than three million bpd. And one to two million bpd of that spare capacity in Saudia Arabia.

Before 1970 , the U.S. had spare capacity. The once rich West Texas oil fields are now populated by thousands of low volume stripper wells.

Indeed there are possibilities that countries that say that they have spare capacity – particularily Saudi and Kuwait- may be overstating their reserves.

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The End of Cheap Oil and the Coming 20 Trillion Dollar Investment

Tuesday, July 17th, 2007


The End of Cheap Oil and the Coming 20 Trillion Dollar Investment

The end of peak oil has been known for many years . The reality of peal oil is now being felt all over the world. Gas prices are rising steadily. Blood is being shed over dwindling ding oil supplies . Demand for costly energy has an absolute frenzy. Oil pricing has now reached a critical point for investors.

The next twelve months will be crucial. Nine out of ten of the largest oil fiends have already entered into decline. One major oilfield alone has dropped 20 % in production so far.

Oil prices have tripled since 2000 . Oil companies are involved to boost their production and reserves . Shell Oil produced twice as much oil as it discovered. This is in additon to novel oil production sources like oil sands.

Factor in Iran’s strong push toward nuclear weapons and ever increasing rhetoric .

The next twelve months will present the biggest , boldest energy related profits that you will see in decades.

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Chindia Middle Class Wave

Tuesday, July 17th, 2007


Trillion dollar wave of spending coming from a growing Chinese and Indian middle class. Hundreds of millions of people who want things like roads and electricity , plus everything Americans want: 2 cars. a flat screen tv , laptop computers, a nice home a college education for their kids.

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First Returns Sector One 2007

Tuesday, July 17th, 2007


Even though we had a great first half run in 2007 , that is no the point. While we are on a roll and the markets are having a great run- there are still lots of ways that we are going to beat the Forex Foreign Currrency Exchange Market.

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Uranium Rich Company

Tuesday, July 17th, 2007


Strategic Resources controls two to the largest uranium zones in Argentina- which could prove to be some of the largest uranium deposits in the 21′st century. Their initial exploration is comprised of 7 high quality potential uranium deposits properties spanning 74,000 acres in La Rioja, Spain . High quality uranium has been identified.

Halftime report – the results are in for the first six months of 2007. The S & P is up to about 8.7 % with another 1/5 % in dividends.

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If you had allocated your money – overweighting in some parts and underweighting other parts – you would have a 50 % annualized return meaning that your money doubles approximately every 1.6 years.

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Investing as Logical Social Science

Thursday, July 5th, 2007


Interestments discussed in today’s New York Times, by Laren Cohen, Andrea Frazzini, and Christopher Malloy. The gist of it: that investments by mutual funds are more likely in companies in which the manager of a fund has classmates on the board of directors, and, further, the returns on those investments are far higher than investments in which the manager does not have “old school ties.” Further, the timing of these investments is tied to particular news events from the corporation, suggestion some “information transfer” is occurring.

This is both a neat bit of research, which makes a persuasive case for the presence of information transfer. The magnitude of the effect is particularly striking when you consider that their proxies for a social network, while reasonable, are certainly noisy. That is, while attending the same school, especially in the same cohort, is certainly strongly predictive of a relationship, people do not have relationships with all of their classmates, and have many/most of their relationships with non-classmates. So this effect (almost double the return for investments associated with ties as compared to those not) is likely a fairly conservative estimate of the impact of social ties.

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