If gas reaches $5.00/gal are you done?

[CPCooper]

Well we looked at Diesel Pushers on the highway for years and said "maybe someday". Now we have one and are planning a trip to Alaska after retiring in one year. I don t care what it goes to(diesel) We are gone. Of course we may not eat on the trip but oh well you have to sacrifice sometimes.

[Always-RVing]

I recently cancelled a trip after adding up the fuel cost of $3,000. For fuel, RV parks and whatever else, it was going to cost over $4,000.00. For that amount, we could travel to Tahiti, UK, Hawaii, etc. It just didn't make sense anymore.

[Dave and Jaime]

Originally Posted by thelastplace

This started out as a question 'If gas is $5.00 a gallon what will you do?'. Well, if you've been to Orlando lately there are a couple of [moderator edit] dealers already charging OVER $5.00 per gallon. The true value of gas is measured by how badly you need (or want) it.
When gas was $2.50 a gallon and oil was $70.00 a barrel, the oil companies were making BILLIONS of dollars. Now oil is up 40% but gas prices are up 65%, so I guess the oil companies are making even more money. I don't like government regulation of anything, but rather than release our strategic oil reserves to bring prices down ( and I don't think it will), let's put a little 'control' on oil companies and their profits. They were doing just fine making BILLIONS, do they really need more?


But the true travelers are they who leave for leaving’s sake
Saying continuously, without knowing why: ‘Let us go on’.
Paraphrased from Baudelaire’s ‘The Journey’

Who are the "oil companies" that are making billions? Do you forget these are publicly traded stocks, comprised of millions of shareholders? If you have mutual funds, it is likely that you own, indirectly, shares of these oil companies and are benefiting from their profits. Even if you are not, why not quit complaining about their profits and just buy their stock? You, as a shareholder, will then own and benefit from these billions in profits.

Companies are not these imaginary entities -- they are all owned by real people. Pension plans, individuals, 401Ks, IRA's etc all own shares in them. This doesn't just apply to oil companies. If you think Apple Computer products are overpriced and that they are making "too much" money go buy their stock and take advantage of the situation.

As long as the free market is allowed to prevail, companies will continue to supply all that we demand. Institute price controls and supply will go down (economics 101). Then, you will be back in the days of limited supplies -- remember gas lines in the 70's during the OPEC embargo? You couldn't get gas at any price in some instances. Gas stations ran out. There was odd/even rationing, etc. Frankly, I would rather see free markets, and pay the prevailing price as long as supply is available. Sure beats running out of fuel in the middle of no where. Yes, I would love to see fuel prices below $3.00 but not if it means shortages and rationing.

[Rich and Cork]

Originally Posted by Dave and Jaime

Who are the "oil companies" that are making billions? Do you forget these are publicly traded stocks, comprised of millions of shareholders? If you have mutual funds, it is likely that you own, indirectly, shares of these oil companies and are benefiting from their profits. Even if you are not, why not quit complaining about their profits and just buy their stock? You, as a shareholder, will then own and benefit from these billions in profits.

Companies are not these imaginary entities -- they are all owned by real people. Pension plans, individuals, 401Ks, IRA's etc all own shares in them. This doesn't just apply to oil companies. If you think Apple Computer products are overpriced and that they are making "too much" money go buy their stock and take advantage of the situation.

As long as the free market is allowed to prevail, companies will continue to supply all that we demand. Institute price controls and supply will go down (economics 101). Then, you will be back in the days of limited supplies -- remember gas lines in the 70's during the OPEC embargo? You couldn't get gas at any price in some instances. Gas stations ran out. There was odd/even rationing, etc. Frankly, I would rather see free markets, and pay the prevailing price as long as supply is available. Sure beats running out of fuel in the middle of no where. Yes, I would love to see fuel prices below $3.00 but not if it means shortages and rationing.

Very good post.

[Gary - K7GLD]

Even if you are not, why not quit complaining about their profits and just buy their stock? You, as a shareholder, will then own and benefit from these billions in profits.

YUP - sounds glorious, and yes, *I* own some small amount of oil company oil stock thru Mutual Funds - BUT, I can assure you that profits from those stocks would probably not fill my MH tank even ONCE in a years time.

OR, to put it another way, how big a dollar investment would an ordinary investor like me have to put into oil stocks to obtain, say, a $1000 annual return, eh?

Any "big oil" supporters care to respond to that one?

[Wanabee FTer]

Originally Posted by Gary - K7GLD

Any "big oil" supporters care to respond to that one?

Big money makes money. The rest of us are just along for the ride

[Gary - K7GLD]

Originally Posted by Wanabee FTer

Big money makes money. The rest of us are just along for the ride

My thinking EXACTLY!

What the rest of us ordinary mortals/"investors" make is pure chicken feed in comparison!

[Dave and Jaime]

Originally Posted by Gary - K7GLD

YUP - sounds glorious, and yes, *I* own some small amount of oil company oil stock thru Mutual Funds - BUT, I can assure you that profits from those stocks would probably not fill my MH tank even ONCE in a years time.

OR, to put it another way, how big a dollar investment would an ordinary investor like me have to put into oil stocks to obtain, say, a $1000 annual return, eh?

Any "big oil" supporters care to respond to that one?

Well, let's see. In September 2010, Exxon Mobil stock was $60/share. Today it closed at $84/share. If you bought $10,000 worth of that stock in September, you would have received 167 shares. Today, those 167 shares would be worth $14,000. If you sold, you would have profited $4000. So that in those 6 months, you would have the equivalent of $1000 a year for 4 years.

Even if you only invested $2500 in September, you would have received 42 shares of stock. That would be worth $3500 today. A $1000 profit that you were seeking (in 6 months). So again, if you have a problem with the oil company profits go buy stock.

[RustyJC]

Not to mention the income you would have derived from ExxonMobil's dividends - quarterly dividend history shown:




Rusty

[Gary - K7GLD]

Originally Posted by Dave and Jaime

Well, let's see. In September 2010, Exxon Mobil stock was $60/share. Today it closed at $84/share. If you bought $10,000 worth of that stock in September, you would have received 167 shares. Today, those 167 shares would be worth $14,000. If you sold, you would have profited $4000. So that in those 6 months, you would have the equivalent of $1000 a year for 4 years.

Even if you only invested $2500 in September, you would have received 42 shares of stock. That would be worth $3500 today. A $1000 profit that you were seeking (in 6 months). So again, if you have a problem with the oil company profits go buy stock.

UMMmmmm - might be a bit more realistic to use a more average time span - like, say 10 years or so, rather than the last 60 days or so...

Sure, betting on a "winning horse" TODAY makes the return look fantastic - but what of the race YESTERDAY, and the ones in the NEXT year or so...

And ALSO sure, we've made relatively small returns over the years with our own mutual funds related to oil, and probably incrementally better in the last several months - but hardly have made us wealthy, nor would I choose to put all our eggs in one basket, regardless of how nice it looks over the immediate last several months - and I doubt Warren Buffet does, either...

Anyone knowing for sure what would happen with the sudden spike in oil prices would be foolish (perhaps!) to not invest as much as they could afford in oil futures - but looking back NOW at what has happened, and claiming those same conditions and price spikes would CONTINUE for ANOTHER few months might be equally foolish.

More to the point, did YOU foresee world events related to oil, and invest substantially in oil 6 months ago - or would you do so TODAY?

Oil investment over the last decade HAS been a good choice, and undoubtedly will continue to be - but it's still the heavy-hitter investors making the big $$$, not the ordinary guys like me - we simply don't have the large capital of discretionary $$$ to make the direct and specific investment.

[Dave and Jaime]

Originally Posted by Gary - K7GLD

UMMmmmm - might be a bit more realistic to use a more average time span - like, say 10 years or so, rather than the last 60 days or so...

Sure, betting on a "winning horse" TODAY makes the return look fantastic - but what of the race YESTERDAY, and the ones in the NEXT year or so...

And ALSO sure, we've made relatively small returns over the years with our own mutual funds related to oil, and probably incrementally better in the last several months - but hardly have made us wealthy, nor would I choose to put all our eggs in one basket, regardless of how nice it looks over the immediate last several months - and I doubt Warren Buffet does, either...

Anyone knowing for sure what would happen with the sudden spike in oil prices would be foolish (perhaps!) to not invest as much as they could afford in oil futures - but looking back NOW at what has happened, and claiming those same conditions and price spikes would CONTINUE for ANOTHER few months might be equally foolish.

More to the point, did YOU foresee world events related to oil, and invest substantially in oil 6 months ago - or would you do so TODAY?

Oil investment over the last decade HAS been a good choice, and undoubtedly will continue to be - but it's still the heavy-hitter investors making the big $$$, not the ordinary guys like me - we simply don't have the large capital of discretionary $$$ to make the direct and specific investment.

This was a 7 month period, not 60 days. Plus, the poster was complaining about the runup of oil/gas prices over the last few months, not a longer period of years. But you make a good point -- since the stock prices in earlier periods were not spiraling upward, it dispels the myth of long term extremely high profits.

Short term price spikes (and profits) yes. My point is very simple. Buying the stock is a hedge against the increased fuel costs. Definition of a "Hedge" = "To minimize or protect against the loss of by counterbalancing one transaction, such as a bet, against another." When fuel costs stop rising, the price of the stock will stop increasing. Sell the stock. If the prices increase again, buy the stock. The point is not that you get rich on the stock -- it is that your higher fuel costs are canceled out by the profits on the stock; ie., a hedge.

You don't need a chrystal ball here, just look at fuel prices. When you start complaining, buy the stock.

[Gary - K7GLD]

Originally Posted by Dave and Jaime

This was a 7 month period, not 60 days. Plus, the poster was complaining about the runup of oil/gas prices over the last few months, not a longer period of years. But you make a good point -- since the stock prices in earlier periods were not spiraling upward, it dispels the myth of long term extremely high profits.

Short term price spikes (and profits) yes. My point is very simple. Buying the stock is a hedge against the increased fuel costs. Definition of a "Hedge" = "To minimize or protect against the loss of by counterbalancing one transaction, such as a bet, against another." When fuel costs stop rising, the price of the stock will stop increasing. Sell the stock. If the prices increase again, buy the stock. The point is not that you get rich on the stock -- it is that your higher fuel costs are canceled out by the profits on the stock; ie., a hedge.

You don't need a chrystal ball here, just look at fuel prices. When you start complaining, buy the stock.

YUP - agreed, probably won't put you in Bill Gates category, or necessarily keep your fuel tank filled as a day-to-day profit maker - but still a good historical investment for those who can afford it...

This guy in a related Mobil stocks forum pretty well sunmmed it up for the common investor:

I own Exxon Mobile stock. The amount I receive in dividends doesn't begin to equal increased prices at the pump. You'd have to own a lot of stock for that to happen. Most people cannot afford that big an investment, and of course it's foolish to put all your investment capital into a single stock or industry.

[ulric]

I didn't buy a beautiful, luxurious RV to park in the driveway until all the crackbrained theories under the sun fail to make the price of oil go down. I mean if the ante is too high then fold, but my hand is pretty good and I'm going RV'ing!

Might make shorter trips, however...

[Wanabee FTer]

Originally Posted by Dave and Jaime

You don't need a chrystal ball here, just look at fuel prices. When you start complaining, buy the stock.

I agree, the time to buy is when prices are going up.
Unfortunately there are only a privileged few that are privy as to when to sell for a huge profit.