Billionaire Warns World Oil Shortage Coming
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This guy is a billionaire huh? Monday, December 19, 2005 4:35 PM
MoneyNews from NewsMax.com
Billionaire Warns World Oil Shortage Coming. Prepare Now.
Billionaire Richard Rainwater has made his fortune by foreseeing a crisis and knowing how to profit from it.
Now he foresees the biggest crisis yet for the U.S. economy - the steady dwindling of oil supplies.
Americans are "in the kind of trouble people shouldn't find themselves in," the 61-year-old investor tells Fortune magazine.
Rainwater, number 112 on Forbes magazine's list of the 400 Richest Americans, warns that an "economic tsunami" is about to strike the global economy as the world runs out of oil.
He also notes that a coalition of communist and Islamic states may decide to stop selling oil to the U.S., and that food shortages could soon become a problem in America.
And he cautions: "It's not raving. I promise I am not a kook."
For sure, Rainwater is no kook. He first came to prominence as the chief investment strategist for the Bass family beginning in the 1970s before striking out on his own.
In the mid-1990s he saw panic selling in Houston real estate and bought millions of square feet - properties that are now selling for three times what he paid for them.
Later in the decade, when investors were pouring money into technology stocks and oil was cheap, he foresaw that oil prices would rise and invested heavily in oil stocks and futures - investments that have paid off handsomely.
Now Rainwater is so concerned about the looming energy crisis that he has some $500 million of his $2.5 billion fortune in cash, more than ever before, Fortune reports - and his wife, a former executive at Chemical Bank, has taken to calling him "Dr. Doom."
"I'm long oil and I'm liquid," he said. "I've put myself in a position that if the end of the world came tomorrow I'd kind of be prepared . . .
"Now there's the opportunity to do something based on a shortage of natural resources. Can you make money? Well, yeah."
One way is to stay long in domestic oil, he suggests.
What worries Rainwater is that "peak oil" theorists believe global oil production is at or near its historic ceiling and will begin a long, steady decline - at the same time that worldwide oil consumption has risen from 55 million barrels a day in 1988 to more than 80 million today.
Those theorists "worry that America is not ready for the downturn, for skyrocketing prices and even shortages," Fortune reports.
Rainwater shares those worries.
"What concerns him most is the conflict that he thinks an oil shortage will precipitate," according to Fortune.
"What happens when people get blindsided by prices rocketing past any level they have contemplated?"
Fortune cites several strategies that Rainwater could adopt to capitalize on global shortages:
Currencies. Avoid nations with few natural resources and large populations. Sell the Japanese yen, for example, and buy Canadian dollars.
Oil and gas. The best bets are major oil companies with significant domestic reserves.
Food. Rainwater believes the next "big play" may be in agricultural products, where prices have yet to climb.
Hmm buy food? Commodities are a tough play. Note that newsmax disagrees.
Editor's Notes:
An oil shortage? NewsMax's Financial Intelligence Report accurately called the oil price rise in April of 2004 and disagrees with Rainwater. Profit from the coming oil bust and get the full report
This guy is a billionaire huh? Monday, December 19, 2005 4:35 PM
MoneyNews from NewsMax.com
Billionaire Warns World Oil Shortage Coming. Prepare Now.
Billionaire Richard Rainwater has made his fortune by foreseeing a crisis and knowing how to profit from it.
Now he foresees the biggest crisis yet for the U.S. economy - the steady dwindling of oil supplies.
Americans are "in the kind of trouble people shouldn't find themselves in," the 61-year-old investor tells Fortune magazine.
Rainwater, number 112 on Forbes magazine's list of the 400 Richest Americans, warns that an "economic tsunami" is about to strike the global economy as the world runs out of oil.
He also notes that a coalition of communist and Islamic states may decide to stop selling oil to the U.S., and that food shortages could soon become a problem in America.
And he cautions: "It's not raving. I promise I am not a kook."
For sure, Rainwater is no kook. He first came to prominence as the chief investment strategist for the Bass family beginning in the 1970s before striking out on his own.
In the mid-1990s he saw panic selling in Houston real estate and bought millions of square feet - properties that are now selling for three times what he paid for them.
Later in the decade, when investors were pouring money into technology stocks and oil was cheap, he foresaw that oil prices would rise and invested heavily in oil stocks and futures - investments that have paid off handsomely.
Now Rainwater is so concerned about the looming energy crisis that he has some $500 million of his $2.5 billion fortune in cash, more than ever before, Fortune reports - and his wife, a former executive at Chemical Bank, has taken to calling him "Dr. Doom."
"I'm long oil and I'm liquid," he said. "I've put myself in a position that if the end of the world came tomorrow I'd kind of be prepared . . .
"Now there's the opportunity to do something based on a shortage of natural resources. Can you make money? Well, yeah."
One way is to stay long in domestic oil, he suggests.
What worries Rainwater is that "peak oil" theorists believe global oil production is at or near its historic ceiling and will begin a long, steady decline - at the same time that worldwide oil consumption has risen from 55 million barrels a day in 1988 to more than 80 million today.
Those theorists "worry that America is not ready for the downturn, for skyrocketing prices and even shortages," Fortune reports.
Rainwater shares those worries.
"What concerns him most is the conflict that he thinks an oil shortage will precipitate," according to Fortune.
"What happens when people get blindsided by prices rocketing past any level they have contemplated?"
Fortune cites several strategies that Rainwater could adopt to capitalize on global shortages:
Currencies. Avoid nations with few natural resources and large populations. Sell the Japanese yen, for example, and buy Canadian dollars.
Oil and gas. The best bets are major oil companies with significant domestic reserves.
Food. Rainwater believes the next "big play" may be in agricultural products, where prices have yet to climb.
Hmm buy food? Commodities are a tough play. Note that newsmax disagrees.
Editor's Notes:
An oil shortage? NewsMax's Financial Intelligence Report accurately called the oil price rise in April of 2004 and disagrees with Rainwater. Profit from the coming oil bust and get the full report
