A Lesson We Learned About the Price of Oil - From Ray Dalio
This caught my eye the other day and reminded me of an important lesson I learned as the price of oil continues to drop.
So what's the lesson here? You need to cultivate diverse sources of information and intelligence when it comes to making investment decisions. While the word "diverse" has become overused these days, mostly due to the endless calls for "diversity" that are mindlessly repeated day after day, the meaning of the word applies here - "showing a great deal of variety; very different" - with the emphasis on "very different."
And lest you might be tempted to gloss over this, in thinking about all this, I happened across these words from Ray Dalio, founder and Chairman of Bridgewater Associates, the world's biggest hedge fund. Over the years, I've found him to be one of the real "thinkers" worth reading, at least as his thoughts apply to investing. Apply what he says to the price of oil, and your own understanding of it. In fact, read the whole short article. It's packed with valuable words and thoughts that could help you think more clearly about investing.
(Read the rest of Mr. Dalio's comments HERE.)
(Bloomberg) -- A record surplus in U.S. crude inventories may soon strain the nation’s storage capacity, renewing a slump in prices and curbing its output, according to the International Energy Agency.For years, an investment analyst I followed - whose subscriptions are, by the way, very expensive, touted oil going to $300. Month after month, as oil wavered between roughly $90 and $110 for what seemed like forever, this gentleman relentlessly published analyses that explained why those calling for lower oil prices were wrong, wrong, WRONG. Oil had to rise in price. Reams of statistics demonstrated that supplies were tight and demand was growing, even in the face of a stagnant world economy. After all, China and many of the up and coming Asian economies thirsted for oil to fuel as they built industries that only a decade before simply didn't exist. The whole phenomenon of "off-shoring" the manufacture of the world's goods virtually guaranteed continued growth in the East, so the demand for oil would not only sustain, but grow. It all sounded so clear, so logical, so definite, so inevitable. Except that's not what happened, of course.
So what's the lesson here? You need to cultivate diverse sources of information and intelligence when it comes to making investment decisions. While the word "diverse" has become overused these days, mostly due to the endless calls for "diversity" that are mindlessly repeated day after day, the meaning of the word applies here - "showing a great deal of variety; very different" - with the emphasis on "very different."
And lest you might be tempted to gloss over this, in thinking about all this, I happened across these words from Ray Dalio, founder and Chairman of Bridgewater Associates, the world's biggest hedge fund. Over the years, I've found him to be one of the real "thinkers" worth reading, at least as his thoughts apply to investing. Apply what he says to the price of oil, and your own understanding of it. In fact, read the whole short article. It's packed with valuable words and thoughts that could help you think more clearly about investing.
To make money in the markets, you have to think independently and humbly. You have to be an independent thinker because you can't make money agreeing with the consensus view...
(Read the rest of Mr. Dalio's comments HERE.)
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