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

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Ben on September 9, 2005 - 4:58pm Permalink | Subthread | Comments top
Article about today's show

(towards the bottom of page 1)

"Cheap oil. It's a lie," said Cramer. Don't be fooled by any brief respite in gasoline or natural gas prices, he said. "Until your gas prices are at least two or three times the price of milk, I think you're still living in a world of cheap oil. You're living on the big lie."

Maybe it's catching on...

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mw on September 9, 2005 - 5:21pm Permalink | Subthread | Parent | Comments top
The interesting thing is that there's some awareness of Cramer among professionals. He's no uber-guru by any means, but much of the street thinks like him - the "Church of what's working now" is his primary orientation.

I've noted a number of daily briefings from two of the big brokerages that comment on something noted on one of Cramer's shows. When you consider that these briefings are issued to an entire brokerage's sales force, occasionally an item gets broad coverage.

In the context of Cramer's show I suspect the actual impact on the broader audience will not be high, but any move forward is a positive one.

Unfortunately Peak Oil is custom designed as a topic  for the doom and gloom crowd ... the ones that believe gold is the only useful store of value ... and as has been discussed here in the somewhat distant past, being associated with the always-negative-folks can diminish the Peak Oil community's ability to spread the message in a constructive fashion.

Myself I think the gold guys got it all wrong; oil would be a better store of value in a doom and gloom world.

Think Mad Max.

;-)

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Quinn on September 9, 2005 - 5:54pm Permalink | Subthread | Parent | Comments top
I actually thought about that and did some research - its not practical to own physical oil, unless you put a little in your chainsaw - you need a refinery to eventually make use of it. You can store other 'energy' assets that would be worth barter perhaps more than gold in a post-peak world - kerosene and diesel most notably.

http://home.aol.com/keninga/lp_kero.htm

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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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