Yet Another Oil Update
So far my investing has been going pretty good. [Apart from the small setback in the stock market crash of 2000.] I bought real estate in San Diego at the right time. I sold it at the peak. I got out of my other California properties right at the top too. I got into Salt Lake City right as it was about to take off. I bought some gold right before it made a 35% jump. So far I’ve been quite accurate at identifying investments trends and profiting from them.[Or maybe I've just been lucky!]
I’ve spent the past several months researching oil and gas and have even invested a bit in a small well and am about to invest in another one through my corporation’s pension plan. I also think oil is going to be the next highly touted investment. I bet some washed-out actor like Eric Estrada will appear on late night ads promoting oil investments in the next 2 years.
Everyone knows that oil has jumped to $70 per barrel but most people don’t know how to invest in it. Since I’ve figured out some of the steps and pitfalls, I think its time to capitalize on my knowledge. I’m planning on putting together an LLC with a partner which will pool in money from friends & family. Together we’ll invest in several projects, thus lowering the risk.
Not only will I invest my money along with them, I’ll take a small management fee. I’m thinking it’ll be in the range of 30% of the profits after the investors get 10%. If I can’t provide a 10% return then I really don’t deserve any profit-split, right? Although most financial overseers don’t agree with this philosophy, that was how Warren Buffet had originally set up his partnership. He got a 25% share of the profits after the first 6% was returned to investors.
Well I’m talking to an attorney about it tomorrow. I’ll let you know what I find out.
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May 31st, 2006 at 2:19 pm
Sounds interesting. You don’t think oil is mostly played out? I guess we’ll know when Al Gore is selling warrants to ANWR drilling, should the government ever recind the ban.
Seriously, wish you luck, it sounds like a goood opportunity.
May 31st, 2006 at 4:09 pm
No, oil as an investment is just starting.
oil isn’t going to get any cheaper and the demand is just going up. better to get in now before everyone jumps on it and brings down the rates.
just as cap rates for commerical bldings in california are hovering in the 3-6% range, the same thing will happen to oil. right now you can get 25-50% return on your money. but with too much money chasing it, it’ll come down.