This is so very untrue (that it wil be worthless), if every car in the world were electric, demand would be marginally less, but oil is used to make plastic, chemicals, Kerosene - pretty much everything useful
Stock noob - oil
- Thread starter Cryogenic
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This is so very untrue (that it wil be worthless), if every car in the world were electric, demand would be marginally less, but oil is used to make plastic, chemicals, Kerosene - pretty much everything useful
Thanks, I have seen other people do it on what to any normal person would seem ridiculous.
My friend sold his house to invest in a new school teaching Japanese (wtf) - his income has gone up 30x in 2 years. Other friends have borrowed money to start a mikshake bar with chocolate bits inside as their niche - they make £500/day and are on their 3rd branch.
What is so wacky about me doing the same?but thanks about wishing me well
Your friends saw an opportunity, they took a big risk and they were rewarded. Your hear their success stories but you rarely hear about the failures, which are much greater in number, overall.
I think your first priority would be getting a good idea, the one you mentioned is not one.
Thanks, I have seen other people do it on what to any normal person would seem ridiculous.
My friend sold his house to invest in a new school teaching Japanese (wtf) - his income has gone up 30x in 2 years. Other friends have borrowed money to start a mikshake bar with chocolate bits inside as their niche - they make £500/day and are on their 3rd branch.
What is so wacky about me doing the same?
I think the main issue here is that you have no idea about what you seem to be doing? I think it'd be very different if you had £40k under you mattress in cash and had to physically take this money down to the bank to gamble.
If you are going to invest in something, make sure you know a little about it. The people you mentioned would have sat down and worked out all the ins and outs, had forecasts and a plan. They didn't just sit there and think, hmm where shall I lump this money..I know, I'll choose something that I can have absolutely zero power or effect over.
You can get a remortgage for buying a car as the reason, you can sell that car later down the line. There is nothing illegal about this as the bank are taking the vast remaning 60% equity in the property as security so they are safe as houses if you dont pay up - they dont care what you do with it as long as you pay the mortgage to term.
Sound advice for sure - kudos!
Like I said I need to research it first, if it looks even slightly pear shaped, it goes no further 
How did all these people start off - as noobs like me. But there came a time when they were experienced enough to go the next step
The point was that everyone else takes the risk so that in the long term they have a stable and secure home, which you already have. To compare your endeavour of mortgaging your house so you can play at being a 'strategic thinker' and make a fortune is completely mad really, it's not remotely the same.
Whether you want to admit it or not, throwing 40k at futures markets to make 500k is very much a dream of easy riches.
As for comparing throwing money into futures because oil must go up to friends who have identified business opportunities and developed them into success, that's just as misguided as your mortgage comparison, so much so I'm starting to think the earlier calls of troll thread were on the money, it's too hard to believe anyone would actually think in the manner you seem to be.
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Agreed, 40k is not my whole house, just a remortgage of around 40%. Agreed about the booms, but scarcity and middle east dictatorships are a sure fire bet - I would bet my life on it
could turn into your whole house quite easily - for the sake of an example as to how this could go wrong very easily
OK supposing you put up your £40k margin and go long 20 brent crude futures (assuming for this example $60K USD in margin and $3K margin per contract)
the price drops by 1 dollar, you lose $20,000
also assuming your broker hasn't actually closed your position automatically already(more than likely with most) - do you take out another mortgage to cover the additional margin you now need to maintain it?
the price drops by a couple more dollars
take out another mortgage? You've now required an additional £40K GBP ($60k) to hold the position over this $3 drop in the price of oil.
Sure you might be very very lucky and go long right at the bottom of the market, see the oil price increase by over $30 over a few months and get a 1000%+ return on your investment... in reality that isn't going to happen
Price can fluctuate a fair bit.... maybe oil will increase over your horizon of several years but can you afford to hold the position while it bounces around - would you be prepared to risk your whole house? The most liquid contract is the front month, currently that expires in December - you'll have to roll your position to the next month and so on.
So maybe you don't invest the whole £40K... maybe you just buy a few contracts and have the rest in cash to cover additional margin requirements - well you're not so leveraged now so your huge % returns aren't feasible any more.
Maybe you can buy a load of call options... but there is a reasonable chance they'll expire worthless.
I think if you're going to take a long term view on the price of oil then using lots of leverage to do it is a bit silly, the price can bounce around all over the place... If you want to speculate on these price fluctuations over a shorter period of time then perhaps it is feasibly to make use of leverage... problem is there are rather a lot of fairly sophisticated firms doing that and you're not likely to beat them at this game.
In 2001 the US imported around 90% of their oil, now they import a couple of rent. The US has relaxed oil exportation rules, very soon they will be exporting. The reason oil priced are low now is that supplying is starting to outstrip demand. The fear of peak oil is ever distant., in,proving technology means it is viable to extract from ever smaller fields or new areas like shale fraking.
Moreover, the developed countries are slowly seeing the big pictures wrt to climate ch age, fossil fiule pollutants, renewable energy and a livable future for our children with global warming constrained to manageable levels under 3*C warming. Long term demand for oil is likely going to go down a lot. Cars will all go hybrid or fully electric, solar power is now at grid parity and wind has beaten parity for some time, home and offices are getting more efficient, newer technologies are coming to light. Who knows what future technologies bring, e.g. In 30 years time will nuclear fusion become viable, instantly making all coal oil and gas powdered station redundant?
There are plenty of ways to realize that oil prices might reduce and stay that way. I'm not saying I'm confident in that, but these are the counter arguments.
Moreover, the developed countries are slowly seeing the big pictures wrt to climate ch age, fossil fiule pollutants, renewable energy and a livable future for our children with global warming constrained to manageable levels under 3*C warming. Long term demand for oil is likely going to go down a lot. Cars will all go hybrid or fully electric, solar power is now at grid parity and wind has beaten parity for some time, home and offices are getting more efficient, newer technologies are coming to light. Who knows what future technologies bring, e.g. In 30 years time will nuclear fusion become viable, instantly making all coal oil and gas powdered station redundant?
There are plenty of ways to realize that oil prices might reduce and stay that way. I'm not saying I'm confident in that, but these are the counter arguments.
That was the research I was looking to do, but as you have been kind enough to explain I will put it on the back burner and try something else in the meantime - like I said I am not a fool just curious as to the possibilities
You's be surprised at how talking to a dragon from Dragon's den for an hour may change your outlook or business plan. This thread is no different to guys at a bar sitting around the table having a discussion, and yes, there is a lot of new information which has been asbsorbed. On a side note, I do apply myself at work and do get promoted as a result, the rate is a few pence per hour more on every promotion. Nothing wrong with this but ask yourself why the national lottery exists in the first place, why not simply close it down today
This is so very untrue (that it wil be worthless), if every car in the world were electric, demand would be marginally less, but oil is used to make plastic, chemicals, Kerosene - pretty much everything useful
With imposed green targets and the reduction in oil demand the price will be low. Worthless is just relative. Non-oil based plastics etc. are already the norm. Crude oil isn't used that much to make plastics, gas is the normal source (LPG etc.) . Society aims to reduce oil consumption per person and one day it will be barely anything.
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wouldn't count on it.
ahh no here's the misconception we're aiming to reduce the amount of oil burnt per person
there's no political or social movement to reduce the amount of oil used for plastics, pharmaceuticals, fertilizers, lubricants or road surficing.
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How did all these people start off - as noobs like me. But there came a time when they were experienced enough to go the next step
The fact you think that investing a pile of money in starting your own business (milkshake bar, school in Japan) is the same as borrowing money from a bank to gamble on the stock market is simply further evidence that you have no real understanding of what it is you intend to do and anyone willing to lend you the money do it is almost as foolish as you are.
http://www.eia.gov/tools/faqs/faq.cfm?id=34&t=6 less crude oil is used these days for plastics. If you are going fot a long term investment to try make huge returns then there is a risk that in that period all items using oil will be restricted for synthetic and other sources.
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yes if you read your link they're made from natural gas instead.
simply because its cheaper to use the already light products than clean up crude to be the stuff you need.
but its not a significant change, if gas starts getting more expensive they go back to oil.
Either way, sit still a fossil product.
Yes but that is a different commodity.