“Oil is seldom found where it is most needed, and seldom most needed where it is found.”
That quote belongs to L. Brouwer, a former managing editor for Royal Dutch Shell (RDS:NYSE). In a nutshell, it sums up the world’s oil dilemma. Crude oil is spread across some of the globe’s most oppressive deserts and buried under the deepest, most inaccessible parts of the sea.
Even Iraq, smack dab in the middle of the land of oil, is having troubles. Its citizens are paying nearly $5 a gallon for gasoline on the black market. Even though the government is selling it for about 65 cents, it can’t produce enough to keep up with demand. The country is witnessing its biggest fuel shortage in years.
Why? Simple answer: terrorism, corruption and a lack of refining capacity. The same three things that have oil prices across the globe near-record highs.
Let’s face it. When it comes to our addiction to energy, the world is in trouble. Huge amounts of money are being spent feeding the addiction.
Exxon has seen obscene profits. Share prices of oil and natural gas exploration companies are going through the roof. And alternative energy producers are getting more attention than ever.
If you read Fear and Greed with the most minuscule amount of consistency, you already know my thoughts on energy investing: short term, alternative energy; long term, oil, oil, oil.
But I don’t work alone. Every day, I spend time with a talented group of individuals that all call themselves Taipan Group editors. While we see eye-to-eye on some subjects, there are times when none of us can agree (hey, we’re not paid to conform).
But no matter how heated the arguments get, this group of savvy Wall Street wizards is always making a profit somewhere.
For some slightly different takes on profiting from the world’s oil addiction, I asked a few of Taipan’s editors to sum up their thoughts on how to profit from the energy industry. I think you will be intrigued to read what other Taipan editors are writing and thinking.
Please, take some time to read their comments and click on the links that lead to their respective Web sites. A unique perspective is a horrible thing to waste.
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First, you’ll hear from S.R. Nunnally of Material Profits fame. This hotshot editor has been featured on numerous TV and radio programs and always has a detailed plan to make money from the alternative energy industry.
Here’s S.R. Nunnally of Material Profits:
As bad as it seems, there’s a silver lining to high energy prices, particularly oil prices.
High energy prices mean more interest in alternative energy, and not just interest, investments! The Cleantech Venture Network said earlier this week that venture capital investing in alterative energy is now the third most lucrative investment field. And, this quarter that just ended showed a 64% increase in capital investments in clean technologies.
Yes, you can now make more money by investing in wind energy, et al, than by investing in either medical or telecom ventures.
Though this may be news to some people’s ears, it’s hardly out of the blue. That 64% increase in investment dollars is the eighth growth quarter in a row for clean technology.
If high oil prices are here to stay -- and I think they are -- investors shouldn’t ignore the profit potential in the alternative energy investment sector. – S.R.N.
Todd Schoenberger of Diligent Investor has a different opinion. If you ask him (most of the time you won’t have to, though), he will clearly tell you the only alternative energy is crude oil.
Here’s Todd Schoenberger of Diligent Investor:
I find it amazing that people are still touting alternative fuels like ethanol as the one energy source that’s going to change our lives. It’s great that there are so many visionaries on the planet that are trying to create something to help sustain global demand for oil resources; but their efforts are a complete waste of time and money.
The only alternative fuel available in the world is called oil and the faster everyone accepts this fact, the faster we can go and explore for more. There is so much global demand for the commodity that the world requires 84 million barrels a day just to survive. Former emerging markets like India and China are quickly becoming economic superpowers and are the catalyst for this higher demand.
Invest in the companies pumping oil from the ground. They will be doing well long after the alternative energy craze is over. – T.S.
Finally, there is Ian Cooper of Extreme Volatility Speculator, an ultra-unique trading service designed to run fast and hit hard. Because of his background and extensive formal education in the world of fast-breaking news, Ian always knows what is going on long before the rest of us.
By the time a story makes headlines, his devout followers are already banking gains. Ian is quick and precise. I once watched him make triple-digit gains in just a few short hours. His view on the media and its coverage of the oil markets is something you don’t want to miss.
Here’s Ian Cooper of Extreme Volatility Speculator:
Even after studying the behavioral tendencies of mass-media gatekeepers, I’m still shocked by their audacity, thinking we’re naive enough to believe in an August 22, 2006 apocalyptic event.
But the fear -- implanted into the American psyche by the trusted media -- could help spike oil prices back to record highs. In fact, I’d use this week’s end of travel-season-induced oil pullback to buy into oil companies, and even alternative fuel companies, which stand to rebound on high oil.
You can thank Islamic scholars for starting the media obsession with an apocalyptic event of August 22, which has deep roots in Quranic mythology. Reportedly, that date is “known in the Islamic calendar as the Night of the Sir’a and Miira’aj, the night Prophet Mohammad ascended to heaven from the Aqsa Mosque in Jerusalem on a Bourak (half animal, half man)… .”
The Night Journey “is central to Islam’s claim to Jerusalem as an Islamic holy city,” according to FrontPageMag.com. A couple weeks later, an Islamic scholar reported he had the same concerns about August 22.
The fear, spread with the help of a gullible mass media, is that an apocalyptic nuclear event could occur on this date.
Expect for the media to play this up during the week of August 22 and parade so-called reliable sources through the American media outlets, driving fear through the heart of the American psyche and sending oil prices skyrocketing on fear alone. - I.C.
There you have it. While we may not always agree (why should we?), it’s obvious each of the editors at the Taipan Group have laid out their plans to make money from soaring energy prices.
Stay tuned. More of these round-table debates will be coming your way. Feel free to send me the topics you would like to see discussed at fng@taipangroup.com. We are open to anything.
Enjoy your weekend.
Andrew Snyder
Executive Editor, Fear and Greed
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