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35 comments on Jim Cramer: "The Simmons Argument is Right..."

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GJ on September 9, 2005 - 8:19pm Permalink | Subthread | Parent | Comments top
Oil would be a great store of value if it were condensed - add water and away you go.  At current prices, buying 100 barrels of oil would cost only about $6500, but where do you store it?  Far better to buy something like gold or silver, which must go up in value as the price of oil increases because mining these elements is very energy intensive.  If the price of gold/silver did not increase as oil rises in price, who would bother to dig the stuff out of the ground?  My preference is silver because it is widely used in electronics, photography, medicine, jewelry, automotive, etc. and many of these companies in these industries would gladly pay the elevated prices to keep operating.  They wouldn't have much alternative.

As for Cramer, he was a trader, and often held stocks for less than one day.  I do recall him pounding the table to buy Charles Schwab when it had declined from $50 to $30.  The stock now trades in the low teens, having been much lower not long ago.  I would fade him before taking his advice.

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Halfin on September 10, 2005 - 12:20am Permalink | Subthread | Parent | Comments top
Yeah, why doesn't somebody invent dehydrated oil? That's what we need. Must be those low oil co. R&D budgets they're complaining about in the other thread. I mean, we've had dehydrated water for a while, why not oil?

Seriously, though, I worked in a chem lab one summer while I was in college that did service for the oil business. My dad was an oil man his whole career and he helped me find some summer jobs back then. Turns out that when oil comes out of the well, it's actually mixed with quite a bit of water, at least it is in west Texas. So one of the things I had to do was to separate them so they could see how much there was of each and then also do some tests on the water part, pH and such. I'd put some chemical into it, some kind of de-emulsifier, and then the mixture would settle out into layers real nicely. Somewhat surprisingly the water is on the bottom and the oil on top. So we'd drain off the water and then do the other tests. That's about as close as you'll get in the real world to dehydrated oil.

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Quinn on September 10, 2005 - 6:24am Permalink | Subthread | Parent | Comments top
If peak oil is real, then ENERGY will be what has value, not gold. Gold was a store of value in earlier civilizations that were not limited by energy - if we have economic collapse due to astronomical oil prices, gold futures will go up in the early innings because of logic-as-usual, then plummet based on no globalization. Eventually, in a dieoff scenario, krugerrands and maple leafs will hold barter value, but Id rather own kerosene. Think of the the things that support Maslows hierarchy of needs - gold will be worth less than energy.
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35 comments on Jim Cramer: "The Simmons Argument is Right..."

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