Long Live the Oil Burners

‘Car people’ are my kind of people.

I blame my parents, really. As a teenager, they moved me into a street that was full of young teenage boys. I spent those Christmas holidays making friends with the kids in the street.

Turns out these kids were car people. One of the kids lived on a double block. Any spare patch of dirt that wasn’t holding the house up had a car resting on it — all in various states of working order.

It was in this backyard 20 years ago that I learned you don’t park a 1963 EH Holden; you ‘berth’ it. And that the locks are so dodgy on a Kingswood you can open a door using a five-cent coin.

I’m a car person.

But, like most car people, being able to distinguish between throaty and beasty engine types is becoming a useless skill. In a day age where electric cars are becoming commonplace, distinguishing between engine types doesn’t matter. Because electric cars don’t make much noise.

There is a Tesla Model X in my apartment-building complex. This car is supposedly the fastest SUV ever built, reaching 100 clicks an hour in 3.1 seconds. That’s fast. But, the thing is, you don’t hear it.

In fact, it’s only when this Tesla X comes within two metres of me that I hear its high-pitched electric beater sound.

Yet I’m not the only one with a penchant for cars.

The Historic Automobile Group International (HAGI) reported that cars have provided cashed-up investors with a 129% return in the past five years. That’s more than double the 55% collectable wine has returned in the same timeframe.

Furthermore, classic and vintage cars managed to hold their value through the financial crisis in 2008. Peoples’ passion for the combustion engine has returned 404% in the past decade according to the HAGI. This alternative investment class beats art, diamonds, stamps, coins, watches and antique furniture in the same 10-year period.

Now, I’m not suggesting you dump all your money in a vintage car as an investment. Nothing goes up in a straight line for starters. And the value of cars tends to rise and fall with the stock market.

But, whether you’re a fan of muscle cars, early Japanese ‘fast four’ types, or vintage European coupes, there is one requirement they all have in common: they all need crude. Fossil fuels keep these machines running.

I know oil-burners and petrol-chuggers are copping a whack in the press at the moment. Especially with the UK and France committing to ban new petrol and diesel cars by 2040 last month.

The fact is, oil is needed. And they are banning new car sales, not getting rid of the ones that need crude to keep them going.

With the oil price hovering either side of US$50 per barrel, you couldn’t find a more contrarian play in the marketplace right now. There’s a huge opportunity coming in oil stocks, and the biggest gains are going to start showing themselves by the end of this year. You don’t want to miss out on this.

Details here.

This week in Markets & Money

Vern started the week with a simple lesson: Never spend your money before you earn it. When it comes to managing personal finances, this is generally the first lesson we learn. Yet, as Vern points out, never before has it been so easy to spend money you don’t have. The problem is, Australians who spent up big-time during the mining boom using cheap credit are heavily in debt, and their incomes aren’t growing. As Vern explains, the effects of this will be felt, and soon.

For the full story, click here.

On Tuesday, Jason looked at the debt ceiling in the US. The way Jason sees it, with President Donald Trump in charge, there is little doubt the debt limit will be increased. However, increasing the amount of the debt in the US has wide-ranging implications for the gold price.

For Jason’s full analysis on what these ramifications might be, go here.

On Wednesday, Greg looked at the gold/oil ratio. Many analysts often forget the crucial role this ratio plays in predicting market crises. As Greg explains, the gold oil ratio isn’t far off hitting an all-time high, which is a bullish signal for oil stocks.

For more on this story, click here.

On Thursday, Greg cast his eye over the ‘Big Australian’ — BHP Billion. The miner reported a rebound in earnings, suggesting that commodity prices have well and truly turned a corner. But Australia’s biggest miner still has one problem to tackle. What is it?

For more on the story, click here.

Want to know how you can amass 25 properties before 40? A total reliance on debt and perpetual growth… On Friday, Vern explained how a belief in perpetual property growth is encouraging investors to drown themselves in debt. This will have serious implications for Australia’s four largest banks.

For more on the story, click here.

That’s all for this week.


Shae Russell,

Editor, Markets & Money

Shae Russell started out in financial markets more than a decade ago. Working with a derivative brokering firm, she helped clients understand derivative markets, as well as teaching them the basics of technical analysis. Since joining Port Phillip Publishing eight years ago, Shae has worked across a number of publications. She holds the record for the highest-returning stock recommendation, in which a microcap stock returned over 1,200% in six months. Ask her about it, and she won’t stop yapping on. For the past two years, Shae has worked alongside Jim Rickards as his Australian analyst, translating global macro trends for Aussie investors, and how they can take advantage of these trends. Drawing on her extensive experience, Shae is the lead editor of Markets & Money. Each day, Shae looks at broad macro trends developing around the world, combining them with her distaste for central banks and irrational love of all things bullion.

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