Monday, January 2

New Year Clear Out: Investment

With the ushering in of a new year comes the investment spring cleaning - a time to sort out finances, paperwork and take advice from those predicting the future. As a contrarian investor, I like to do this in December to get into new investments before everyone else thinks about their annual shake-up. My thinking goes - by the time 'tips' appear in the media, the market has already moved.

The best I've read on the year ahead comes from my favourite investment blog Mao Xian - read his post "Interesting Bits in Barron's -- Week of January 2, 2006" [ed.Thanks for the updated link MaoXian]. Investing is about trends - Emerging markets, recovery of the sleeping dragon (Japan) and increasing shift towards technology - all should continue to dominate headlines in 2006. But I was particularly suprised by this view on the future:

"is a continuation of an inexhaustible increase in the use of oil, particularly in the countries where they are barely using any oil. The wealthier they get, the faster they start using oil. The idea that $60 oil is really hurting the emerging economies is a myth. It doesn't seem to be affecting them at all........ I've placed a $5,000 bet that oil prices will average $200 a barrel in 2010.

If the prediction comes true, now's the time to invest in alternative energy. Businesses will soon ditch their petrol cars/trucks for new energy when running costs really hit bottom lines. BP announced $8bn investment in alternative energy just a month ago (no coincidence) and expects to generate £3.5bn income from alternative energy


Anonymous Anonymous said...

Thanks for the link, Simon. Your readers may get frustrated searching for that post since I recently switched to Wordpress and my "old site" isn't easy to find. Here's a direct link to the post:

~C. Maoxian

23 March, 2006 06:22  

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