A strange world these days with oil and energy prices through the roof, seesawing up and down. Lots of reasons and speculation, but quite simply demand outstripping supply.  I watched the Enron debacle explained on PBS last night, and it was interesting and… well, downright scary. How a corporate culture became more about the “cult” aspect was amazing. But I had a few thoughts, especially as I watched how Enron plotted and manipulated energy and money, especially throughout the western U.S. and California. One of the fallen leaders was quoted at one point talking about how “Enron was going to change the world…” You know what? They did… and not positively. I think in many respects Enron showed the rest of the world how one company… and a few people, can manipulate energy prices to the tune of billions of dollars. Heck, if Enron could do it why not OPEC? Why not some of these two-bit countries who are now nationalizing energy resources that foreign companies, notably many American companies, have put tons of investment and research into? I think Enron showed the world that manipulation… speculation…. arbitrage… exploiting loopholes… all can be used to take advantage of the need for a given resource. I’m not a conspiracy theorist by any means, but I think as demand increases for resources, there are countless many who will take advantage of that demand by doing whatever will make them the most money, ethically or not. The free markets at the extreme perhaps. So for now we live with high fuel prices. My only hedge is to invest in the energy sector myself… find a good company with excellent fundamentals. Maybe the gains in that investment over time will help take the sting out of prices at the pump. At least I’m helping pay for the success of the companies I invest in! Of course the other hedge is to drive my 45 mpg Metro as opposed to the F-150. I never figured out why GM shut down the Metro line… they basically gave the business to the Japanese auto makers. Bad timing on their part as fuel prices were low at the time- but they probably didn’t make much on the car anyway. I think we paid a whopping $7200 for it in 1999. Of course it’s not the most luxurious ride… (an understatement). But that little car just keeps on chugging and barely sips fuel.  It has its place, and the fundamentals for what it does are excellent. I like to think of stocks the same way.
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