About oil price

Finance
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Ooh, long ago here I added nothing. Alas, until recently there was at all no opportunity to be engaged in independent researchers. Now it became slightly simpler with it, and it means that I will shortly publish some practices.

Plus still is an idea entirely to move to the independent website shortly.
Amicably, it would be necessary to give some comment on the global markets from the equipment or macroeconomic, especially against the background of the arriving news.

It is remarkable that the other day Google recorded a historical maximum by requests for World War III. News of this sort always pushes people to invest in the “protected” assets and commodity. On the one hand, it looks quite reasonable, at the conflicting demand for raw materials will increase. But there is one problem: historically the prices don’t keep long at the high levels, and correction will take away finally all collected profit. I have shown to one client who has wanted to invest for a long time in oil I the following chart:


The schedule shows dynamics of the price of oil from 1861 to 2011. At the same time, the blue line  price in nominal dollars, and the red line – in brought on inflation since 2011.



What can draw a conclusion? And very simple: Adjusted for inflation, the average price of oil of the hysteric woman was always not more expensive than $40 for the barrel. Any “carrying out” above finally was corrected. It means that oil purchase – initially unprofitable investment. The cost of providing a position, inflation and percent finally will destroy all profit, even if the price of some time grows.



Unfortunately, not so many people adhere to similar logic. And most of my clients don’t consider similar historical extrapolation a sufficient argument and continue to play “random walks.”

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