[Wreckingball]

At the moment oil prices are hitting minimums from 2009. I suppose the tendency is to sink a bit more.

This is what i gathered so far:
Saudi Arabia keeps on pumping black gold, just because they don't want to decrease production. Supply is up and demand is "down". OPEC still have not gathered to put a break on this, because OPEC countries cannot loose revenue from oil sales.

Russia is getting hit by oil prices, and EU/USA Sanctions. The ruble is falling, and doesn't look like it's direction is changing.

Angola and Brazil might also take a hit. Break-even oil price for them is around 80$ and 90$ respectively.
Venezuela will also be severely impacted. The infrastructure is bad, and Chavez/Maduro's socialism is heavily based on oil.

Norway, also a big "producer" of oil is under the radar as their budget is not oil dependent, however loss of profit may cause unemployment.


Question, how to make money from this?

[Chaos]

This is how to save money from that.

Go to Russia and enjoy the country on a budget.

I also ordered my tank full (5000litres) with fuel oil.
It's damn cheap now. 0,84€ a litre.

[TheWisdomOfMyFather]

(12-18-2014 06:03 AM)Wreckingball Wrote:  

At the moment oil prices are hitting minimums from 2009. I suppose the tendency is to sink a bit more.

This is what i gathered so far:
Saudi Arabia keeps on pumping black gold, just because they don't want to decrease production. Supply is up and demand is "down". OPEC still have not gathered to put a break on this, because OPEC countries cannot loose revenue from oil sales.

Russia is getting hit by oil prices, and EU/USA Sanctions. The ruble is falling, and doesn't look like it's direction is changing.

Angola and Brazil might also take a hit. Break-even oil price for them is around 80$ and 90$ respectively.
Venezuela will also be severely impacted. The infrastructure is bad, and Chavez/Maduro's socialism is heavily based on oil.

Norway, also a big "producer" of oil is under the radar as their budget is not oil dependent, however loss of profit may cause unemployment.


Question, how to make money from this?

I will be writing a more detailed investing guide in the future, but let me briefly advise you against investing in oil or rubles (or any other over-hyped security/commodity). Instead, invest in low-cost index funds for maximum wealth generation. As Warren Buffet once said, "I believe that 98 or 99 percent--maybe more than 99 percent--of people who invest should extensively diversify and not trade. That leads them to an index fund with very low costs." Indeed, "by periodically investing in an index fund, the know-nothing investor [nearly everyone, including you and me] can actually outperform most investment professionals."

Long-term index investing is not sexy, which is why average investors routinely make the same mistake you are about to make: failing to acknowledge that over-hyped investments are poor investments. Do you think everyone else watching oil and the Ruble plummet aren't thinking of the same brilliant idea you just came up with? "Oil is falling, I should buy some before anyone else does!" If there is one thing you should know about stocks/commodities, it is that by the time you get any public information about the stock/commodity, the price has already been impounded into the stock/commodity. Therefore, the average investor's brilliant idea (which, of course, no one else but he knows) to buy when the stock/commodity is low is beyond fallacious.

The path to wealth is paved with the corpses of the overly-excited, under-educated investor.

Please let me know if you have any questions. I would be happy to further explain.

-TheWisdomOfMyFather