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How To Make Money On $4 Gas And $112 Oil
By JD Bluefield | April 11, 2008
Now, what do I make of these high gas/oil prices? On one hand, my personal transportation cost go up, but on the other, as long as everyone is eating it evenly across the board I think it is fair. Sure it costs more to drive around, airlines are going out of business and plane tickets are rising, but I think competition is good. Besides, America has been an oil whore for decades, that’s right an “oil whore”! Lets be honest, we are the only nation in the WORLD where people not only drive around in huge gas guzzling SUVs, but feel entitled to do so. I actually had an argument with a coworker about his RIGHT to fill his 4-door, V-6, 12mpg truck with cheap gas.
How to save money with high gas prices? Well, as I said My Monthly Expenses, I plan to bike to work more and use mass transit, and I encourage others to do the same. You could live closer to work, buy a smaller, more fuel efficient vehicle, ditch the 4-wheel drive monster, plan trips better, stay home more frequently… all kinds of things. Although, I know I’m wasting my breath as it will take $6/gal gas before most people are willingly to sacrifice driving solo in a 4,000lb Tahoe. Hell, my neighbor just bought a Dually Full-size pick up as a daily driver. (A Dually for those who don’t know is a large truck with 4 wheels in the rear rather than 2.)
So how do you profit on high gas? Now this is what I’m talking about! Well, you can “cry me a river” about high gas, buy a fuel-efficient vehicle OR…. spot a trend and make money off of it! People may drive smaller cars, take less trips or buy a hybrid, but there is no way you can take those keys out of his hands. Americans love their cars. With that and the knowledge of a decreasing oil supply and increasing foreign demand, do a little mental math. Of the Billions of people in China and India, what if only 0.1% buy a car and refuse to give it up the way Americans do? Food for thought, China had zero presence in previous American Auto Shows, this year there were over 4 new Chinese manufacturers. Furthermore, Tata Motors, maker of the $2,000 car in India, recently purchased Jaguar and Land Rover from Ford Motor Company. This will be their foot in the door for U.S. and European markets.
So with this on the horizon, purchased a small amount of stock in an American oil company several years back, and last year I bought into Chinese Oil company. (Speculation pushed the stock price up rediculously beyond reason so I took profit and pulled out, and it dropped precipitously there after. ) I still hold onto the American oil company, and since I don’t think this oil “crisis” is near its end, I plan to keep it a long time. As I said earlier, the people of China and India have tasted the automobile and will quickly stop packing 5 people per $1,500 moped and jump into a $2,000 car if given the opportunity. Just look at how tightly we hold onto our own automobiles.
Basically, I’m keeping an eye on the next dip in oil to purchase a little more stock and hold for a very long time. Keep in mind that I “took my position” in oil a couple years backs and my shares have already increased dramatically, so I’m not in a hurry to buy. I don’t buy when stocks are going up, and I’d recommend to anyone the same. Do not buy into oil immediately, at all time highs. Wait for bad news or an unnecessary drop, then buy and hold forever. Do your research before you buy any stocks.
Pray for cheap gas? Hell no, I buy oil stocks and yell, “Go $6/gal gas!” Record profits by XYZ oil? “Whoo-hoo!”
UPTDATE 04/12/2008: Average price of regular gas reaches $3.697/gal.
4 Responses to “How To Make Money On $4 Gas And $112 Oil”
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April 11th, 2008 at 8:12 am
Shouldn’t the govt do something? They collect a gas tax for transportation infrastructure. Couldn’t the money be used for alternative fuels, like gasohol, LNG, etc??
April 11th, 2008 at 9:28 am
Taxes collected to improve transportation actually being used for their intended purpose? That’s ABSURD!
April 21st, 2008 at 5:51 pm
How to profit from high oil?
I would say invest in the companies doing the R&D for alternative energy. Theres been a lot of articles that have shown that there is an increase in the amount of money spent on this kine stuff. For example, I think it was in honolulu advertiser that the local companies installing solar panels / water heaters cant keep up with the demand for installs.
In one CNN interview of Jeff Immelt, chairman and CEO of General Electric, the guy said that because technology is getting better and get more demand “The cost of solar power should fall from 30 cents a kilowatt hour today to under 15 cents” in a relatively short time”. Right now HECO charges about 11 cents a kilowatt hour. Garens bo barans that the rate is going to go up and soon cost more than solar. Then what you think going happen den? Thats right, everyone going have one solar panel roof top cus its going to be lose money if you dont.
April 22nd, 2008 at 11:02 am
Investing in a small start-up would be very risky, but I agree that companies like GE who have massive budgets for R&D and have established alternative energy sectors of their company may be good plays. I’m keeping my eye on GE, it is close to a 3 year lows and has a constantly increasing dividend. Another thing about GE is that they are a global player.