# Any thoughts on Jeff Rubin's predictions?



## Spidey (May 11, 2009)

I haven't yet read Jeff Rubin's latest book, "The World is about to get a whole lot Smaller", but it sounds interesting. The premise of the book is that ever increasing oil prices will make shipping cost prohibitive and will lead to a return of buying locally, sky rocketing energy prices, a renewal of manufacturing in North America, and the decline in imported merchandise from China and other places.

http://www.theglobeandmail.com/glob...rld-thats-a-whole-lot-smaller/article1141752/

I'm a believer that peak oil is very close. (Peak oil is not the end of oil reserves, but rather the point at which demand outstrips supply and after that point the trend continues to worsen as oil prices increase dramatically.) His theories sounds very plausible. 

So what do you think? Do you believe peak oil is close? What ramifications do you think this will have on our lifestyles? Which investments will benefit and which will suffer?


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## Rickson9 (Apr 9, 2009)

Spidey said:


> So what do you think? Do you believe peak oil is close? What ramifications do you think this will have on our lifestyles? Which investments will benefit and which will suffer?


I find no benefit thinking about things that are irrelevant to me.


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## Retired at 31 (Apr 20, 2009)

Rickson9 said:


> I find no benefit thinking about things that are irrelevant to me.


Does FOS, BKL KSWS manufacture off shore? 

Unless one believes that that the earth is manufacturing new oil, the concept of peak oil is inevitable. Sooner or later yearly extraction/production will decrease. When is the only question. How quickly the supply and demand curves diverge will determine when we're living in huts chasing animals with spears!


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## healey (Jun 1, 2009)

I saw Rubin on George Stephanopolous' The Hour about a week ago. I don't like the guy. He is not a free-market economist. He is for big government control.

Regarding peak oil. I used to believe in it. But now I am not so sure. My brother was once telling me some arguments that economist Julian Simon had against it. They sounded pretty darn plausible. But I can't remember them off the top of my head...I'll need to read his book.


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## CanadianCapitalist (Mar 31, 2009)

Retired at 31 said:


> Unless one believes that that the earth is manufacturing new oil, the concept of peak oil is inevitable. Sooner or later yearly extraction/production will decrease. When is the only question. How quickly the supply and demand curves diverge will determine when we're living in huts chasing animals with spears!


First, let me preface my comments by saying I'm not an economist and not an expert on peak oil, by any means.

Oil is not a renewable resource, of course. That means that peak oil will be at hand at some point of time. Well before it does, the higher prices due to supply/demand imbalance would force people to cutback. We've seen this time and again. In the face of consistently higher oil prices, human ingenuity will kick in. We'll find ways of producing more oil on the supply side. We'll find new and smart ways of doing the same things with less oil. We'll substitute oil with other energy sources. In short, I'd never bet against ingenuity. We're a long way from hunting animals with spears.


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## stephenheath (Apr 3, 2009)

> I find no benefit thinking about things that are irrelevant to me.


I wish I could stop doing so, I've been trained by sesame street to give anything that flashes in front of me my attention and I can't help thinking about it, then thinking "that is the dumbest thing ever and I've just wasted 5 minutes of my life I can't get back"... then I move on to the next post


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## takingprofits (Apr 13, 2009)

CanadianCapitalist said:


> First, let me preface my comments by saying I'm not an economist and not an expert on peak oil, by any means.
> 
> Oil is not a renewable resource, of course. That means that peak oil will be at hand at some point of time. Well before it does, the higher prices due to supply/demand imbalance would force people to cutback. We've seen this time and again. In the face of consistently higher oil prices, human ingenuity will kick in. We'll find ways of producing more oil on the supply side. We'll find new and smart ways of doing the same things with less oil. We'll substitute oil with other energy sources. In short, I'd never bet against ingenuity. We're a long way from hunting animals with spears.


Very well said.


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## Sampson (Apr 3, 2009)

CanadianCapitalist said:


> We're a long way from hunting animals with spears.


Now we just shoot things  (animals and each other)

I've seen some recent interviews with him pitching this new book. One thing I don't think we've fully seen is how much people are willing to pay to keep the luxuries. Last summer was close, but only the worst of the worst (gas guzzling SUV's) were hit. Even then, if my annual gasoline bill doubled/tripled, I'd still drive.

This same questions has to be asked of each 'exotic' product we consume. Sure a 500% increase in the cost of philipino mangoes is crazy, but if that amounts to $3 a mango, I might cut down but probably won't stop buying them outright.

I'm on board the human innovation front, its just a question of which items get cut from our lists and which stay on regardless of price increases.


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## Rickson9 (Apr 9, 2009)

Retired at 31 said:


> Does FOS, BKL KSWS manufacture off shore?
> 
> Unless one believes that that the earth is manufacturing new oil, the concept of peak oil is inevitable. Sooner or later yearly extraction/production will decrease. When is the only question. How quickly the supply and demand curves diverge will determine when we're living in huts chasing animals with spears!


I'm sure that Kartsotis, Hirschfeld, and Nichols have a handle on how this impacts their respective businesses better than I would.

Again, speaking for myself, these topics are irrelevant to me. I just don't have enough brain space.


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## Spidey (May 11, 2009)

Rickson9 said:


> I'm sure that Kartsotis, Hirschfeld, and Nichols have a handle on how this impacts their respective businesses better than I would.
> 
> Again, speaking for myself, these topics are irrelevant to me. I just don't have enough brain space.


I can see disagreeing with Rubin, but find it hard to see how the future of oil and the ramifications of reduced supply could be irrelevant to any investor. The effects will be far more reaching than in just the price of oil and will probably even influence the performance of the securities you own. As one example, most of your holdings seem to be US securities. What effect would high oil have on the American dollar versus the Canadian?


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## Rickson9 (Apr 9, 2009)

Spidey said:


> I can see disagreeing with Rubin, but find it hard to see how the future of oil and the ramifications of reduced supply could be irrelevant to any investor.


No disrespect, but I don't see the relevance to me.



Spidey said:


> The effects will be far more reaching than in just the price of oil and will probably even influence the performance of the securities you own. As one example, most of your holdings seem to be US securities. What effect would high oil have on the American dollar versus the Canadian?


Nobody knows and I don't particularly care. I'm too focused on making money than to worry about these uncontrollable, unpredictable macroeconomic issues that are unimportant to me.

However, having said that, I hope that you find the answers that you're looking for. Best regards.


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## Sampson (Apr 3, 2009)

Rickson9 said:


> I'm too focused on making money than to worry about these uncontrollable, unpredictable macroeconomic issues


I suspect that most people here aren't worrying per se, but trying to understand how this will change/affect their efforts to make money.

I can't say this for sure, but I'm guessing you would think that macroeconomic factors will affect the companies you hold. You state earlier that you simply let the CEO's of those companies make the decisions, I'm guessing there are some here that would like to react to peak oil with methods of their own choosing.


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## Spidey (May 11, 2009)

Rickson9 said:


> No disrespect, but I don't see the relevance to me.
> 
> 
> 
> ...


Now you've got me curious, especially since you've been fairly successful with investing. I realize that no one can predict trends with 100% accuracy but when I invest, I try to take into account macroeconomic trends such as: the general direction of the economy, interest rates, inflation, demographics, debt levels and the price of necessities such as oil.

So if you don't take any of these things into account, what factors influence you to invest in, for example, Fossil or Columbia sports wear? I'm asking out of interest and not as an attempt to engage a debate.


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## Rickson9 (Apr 9, 2009)

Spidey said:


> So if you don't take any of these things into account, what factors influence you to invest in, for example, Fossil or Columbia sports wear? I'm asking out of interest and not as an attempt to engage a debate.


It's a fair question.

I look at the company's financial statements and SEC Form 4s is about the extent of it.

With regards to macroeconomics, I treat the information like entertainment - like watching a movie or reading the comics. One of our friends consults a fortuneteller and tells her how the predictions relate to her life. This may sound silly, but I actually have the same reaction when somebody starts talking about macroeconomics and how it relates to their investments.

I just can't get my limited minset to understand how a fortuneteller's stories relates to somebody's life any more than I can understand to how macroecnomics relates to investing success. However, I'm happy to listen to how they create a relationship. 

"There are 60,000 economists in the U.S., many of them employed full-time trying to forecast recessions, oil prices and interest rates, and if they could do it successfully twice in a row, they'd all be millionaires by now...as far as I know, most of them are still gainfully employed, which ought to tell us something." - Peter Lynch

"I don't read economic forecasts. I don't read the funny papers." - Warren Buffett

"Thousands of experts study overbought indicators, oversold indicators, head-and-shoulder patterns, put-call ratios, the Fed's policy on money supply, foreign investment, the movement of the constellations through the heavens, and the moss on oak trees, and they can't predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack." - Peter Lynch


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