Kazira

At first I did not want to buy this book. I looked at the cover and thought, this guy seems to be one of those “religious fanatics” who carries a banner in his hand saying “The end is coming”. But at the same time, the oil prices were (at the time I bought the book) flirting with higher 90’s and 100 per barrel. And so I thought to myself “What the heck!!” – It looked like an easy and a fast read – let me give it a shot and, worst case scenario, at least get some chuckle out of it.

But then, as I started reading this book, the author, while repeating himself in most part of the book – convinced me that the way things are going – both on the political and on the financial front – US is bound to see some tough choices ahead. This book was written before the recent big jump in the oil prices and before the “sub prime” financial crisis. I think at the time of his writing, the oil was about $60 a barrel. The author first linked the dependence of and advancements in the Western Civilization to Oil and then, by performing exhaustive research on the oil, conveys how the rise in the price of oil threatens the very existence of it. By the way, most of his research on oil is borrowed from his earlier book, which was titled the “Oil Factor”. By using his hard core research, human psychology and other historical tidbits, the author created a compelling argument that can not be shrugged aside. The author furthers his arguments by performing historical assessment of the stock prices and its dependence on the price of crude oil, oil production capability and production trends. To make things worse, the author adds, the leadership in Washington has put blinders and marching down a path that may destroy our civilization.

And today (April 22, 2008) I read in the Wall Street Journal that “Saudis Face Hurdle in New Oil Drilling – Big, Complex field Seems to mark End of Easy Picking”. Don’t forget that Saudis are the only OPEC members that supply almost one third of the world oil supply and they pump extra oil to keep the oil prices stable. Also, not to forget, the rest of the OPEC members (including Saudi Arabia) – Are not particularly America’s friends (Iran, Iraq, Venezuela, Russia etc.). Saudi Arabia has the King who is US friendly, but the rest of the Saudis (Wahabis especially) HATE America. Now that I finished reading the book and understand the oil politics a bit more, I can safely conclude that this may be one of the reasons for US to occupy Iraq .. Just connecting the dots here …

So, with oil production dwindling and the rest of the oil guarded by the enemies of the US, we need to pay serious heed to this doctor – who has Ph.D. in Psychology – and whose prediction have (unfortunately) come true in the past. No to mention, the economic growth in India and China is not helping the scenario as all. Given this, my friends, $200 a barrel does not seem too far fetched – this would mean $10 /gallon on the gas pump. Are you ready for this??????? Don’t forget, this will increase inflation which in turn will raise transportation costs and decrease the industrial efficiency.

Anyway, while given these doomsday predictions – the author offers hope by suggesting that we could make serious amounts of money EVEN under these grim scenarios. The author also mentions that a persons with more of “Emotional Intelligence” than the higher IQ will survive the coming market collapse – make money in it. HERD mentality and following everyone else to make money will not be an option. Only serious research and investigation would yield profits. He draws a parallel of current and near future economic conditions will be similar to the one that US economy faced in the early 1970’s. And with this in mind – he offers investment advice – some of which – has also come true. I was a little late in picking up this book – or else I would have made good money in Gold and petroleum based stocks. I don’t want to give away the thunder from the book – but author finishes the book by suggesting “Investment Pitfalls” and “Investment Jackpots” during the upcoming stagflation in the US market. I would seriously ask you to read and consider his investment advice and prosper. I have placed my bets already ….

Here is the link to the Amazon site in case my review has peeked your curiousity enough.

Recently, I met a friend who invests a lot in stocks. He mentioned how much money he made from stocks last year and the chances that he would earn the same, this year. The topic was so interesting and came just at the time when I was evaluating various options for investing. So, I got interested in stocks and it made me start browsing Yahoo Finance the very next day. Having said that, I’m still going back and forth on what is a good investment. In this article, I’d like to share a few thoughts on investing and even more importantly…"Safe Investing".

A few friends and some magazines gave a very crucial tip for investing…to always tie a safety net before climbing the trapeze. I absolutely agree with that. The top investment option on my annual plan is the one that fetches a growth of 3-4%, at least and this is what I’d like to talk about in this article. This will be followed by the more risky but higher yielding investment options. To start with, here are some investment options that fall in my safety net.

For short-term investment and returns, my choice would be to go with an online savings account and a CD account. Both of these have an annual yield of around 3-4%, even after such a terrible time for the banks. This is a much better option than doing nothing with your money in a traditional savings account. For the detailed rates for each of these, my pick would be BankRate.com. This website not only gives the latest rates for almost all types of bank accounts but also a few useful tools for investing. However, it was interesting to note that this website did not list WaMu while comparing the rates from various banks. Considering the fact that WaMu offers one of the highest interest rates for online savings, I thought it was worth checking out. So, I also check Deals2Buy.com frequently as this website often provides info on the highest rates being offered by the banks.

Here are a few thoughts on opening a CD account -

• Decide whether you want to make it a long-term investment (like 1 yr, 5 yrs etc) or just a short term (like 3 months, 6 months etc). If someone asked me this question, I would decide this based on my requirement for cash in the next few months. So, let’s say, a person wishes to invest $20,000 in CD and doesn’t have the need for cash for at least 1 yr, my suggestion would be to invest $10,000 in online savings and the remaining in CD for a period for 1 year. This is just in case if a sudden need comes up, the money can be withdrawn from the savings account with no penalties. -

• Decide which bank to go with. The first thing to check for before opening an account with a bank is whether the bank is FDIC insured or not. Since there’s too much happening with banks these days, I feel that this point becomes very important.

Believe me, these accounts are very simple to open and can be applied for online. Please do note that the interest earned is taxable in most states.

For a long-term investment, I would prefer to go with a traditional 401K or an IRA account. I’d rather not go much deeper into these as most of the information can be found from your employer or from www.bankrate.com.

In my next post, I will present a few more "safe" investment options. But until that time, here is wishing you a Very Happy and Safe Investing!