There are at least two significant reasons for individuals, institutions, corporations, and governments to invest using the concept of Peak Oil as a guide:
* R&D: Capital invested in alternative energy companies, as well as traditional oil companies, drives the stock prices of those companies higher. As the stock prices of these companies rise, so does their financial strength and ability to increase research and development activities that are critical to reducing the severity of the impact of Peak Oil. The act of investing in energy stocks, or physical oil via options contracts, indirectly draws attention (people will notice when gas is at $5.00 a gallon) to the problems associated with Peak Oil. As oil prices rise, so will the profile of Peak Oil.
* Life goes on: Even in the worst-case scenarios, such as a severe global recession, people will still have to exist, eat, and provide shelter for themselves and their family. Obviously, access to additional financial resources would be helpful in any time of economic downturn or crisis.
In the event that you agree with these positions, how does an individual or institution allocate their investment capital to (a) create a profitable portfolio, and (b) encourage more research and development of alternative energy sources?
Related Comments (1)
The fortunes of many alternative stocks seem to be pegged to the price of oil. Their share prices have been rising and falling almost in lockstep with oil.
If we do have the financial disaster that many have been warning, gold and silver would be tangible hedges.