Product Description: Stephen Leeb shows how hard times can be a boon for smart investors. As the world faces an energy crisis of unprecedented scope, renowed economist Stephen Leeb shows how surging oil prices will contribute to an economic collapse. With meticulous research and analysis, Leeb shows that due to strong competition from India and China, prices could soon double, a cost for which most countries and investors are ill-prepared. Now, in this groundbreaking book, Leeb not only shows how this crisis will affect consumers, but how savvy investing can turn these dire times into financial gain.
Maybe or Not I wish he saw the credit market collapse and subsequent bailout. I'm off topic, i know, sorry. Regarding oil, hind sight is 20-20. After reading the book i in summer '07 i went off to my CFA and got this take: oil prices are being fueled by speculators, in inflation adjusted numbers it's still less (even at $100 plus) then the spikes in the early 80's, Not to worry the price will come done. Now with oil at 90 plus (10/08), my CFA has proven correct at least in the short term.
The book takes good sources, references, common sense, and some marketing license with the title and makes a good case. The author still sounds shrill. During the period of $140 plus, i went to the authors site expecting to get the i told you so and the get ready here it comes and here's what you can do...but NOTHING! So much for committment.
Don't get me wrong, if nothing he has heightened my senses and i will keep a diligent eye towards the oil industry, international economies, government action and inaction. I think it has elevated everyones thinking and the should be the sole reason for reading this book.
Great book, wish I read it earlier. This book has a lot of great info, particularly about economy and aspects of history that may be misunderstood, or may have been completely misrepresented to us. The book is also a relatively easy read. I read it about a year ago, which was actually a little late, but even now it is still a worthwhile investment.
skip this one The investment advice is based on the assumption that the "coming economic collapse" will be like the recession in the 1970s. Pretty unlikely, given that the causes are totally different. He just wants us to buy gold - who needs his book to hear this?
This is a simplistic book with little to recommend it.
Speculations about the Coming Economic Collapse At the end of the book Leeb gives some solid tips for picking stocks that will benefit from higher oil prices and inflation. His general thesis that the next decade could mirror and exceed the trends of the 1970's does seem compelling. Unfortunately I have some serious concerns about the soundness of the research that he uses to predict that an imminent and prolonged oil shock is on the horizon.
In general he seems to draw from his experience as a PhD psychologist more than from either his math or economics background. He repeatedly makes the assertion that "group think" is responsible for the experts ignoring the fact that we are reaching a peak in oil production and that demand will far outstrip supply in the near term. This assertion is the core of his thesis. If you allow that there exist experts that depend on accurate analysis of oil reserves and demand that do not suffer from "group think" then the book amounts to little more then a speculative stock picking book. I also noticed that most of the references he makes in the book are to Scientific American articles or popular non-fiction books such as Jared Diamond's "Collapse". His research does not appear to be any deeper than what any layperson could cobble together from the books and magazines they normally read.
I believe in the end that speculative stock picks is all this book has to offer. It is a stock picking book by a professional stock picker, who has accurately identified trends in the past, and has found a new concern among investors and capitalized on it. His previous prediction about the collapse of technology shocks shows he has good timing, but good timing does not guarantee that everything he believes will come to pass in the time frame he predicts. If speculating on the market is what you want to do, then his book is as good as any on the topic. It does not appear to offer principled investment advice based new research or insights though.
I took notes, see below, on the points that led me to my conclusion. Perhaps you'll want to review these sections to see if you also find them troubling.
Pg 66-68 - Author shows his support of Keynsesian economics. He argues for government spending is a preferable response to inflation then balanced budgets. He never discusses the place that increased productivity plays in decreasing inflation. If "Chindia" does become modernized in the next ten years, as he asserts, won't that increased productivity have a negative impact on inflation?
He advocates a get rich quick scheme is better then a get rich slow system offered by modern portfolio management. The saying, "you can't cheat an honest man" comes to mind when I read that.
Pg 82 - Leeb writes: "The government wll likely resist conservation for fear of the economic consequences." This does not appear to ring true to me.
Aren't poor nations likely to conserve even more then the U.S.A.? He says Chindia must grow - but can they afford to grow if oil becomes expensive?
He claims US Natural Gas has peaked, but I thought there were large untapped gas deposits in the US.
Pg 86 - Leeb writes: "Safe to assume Saudi own energy consumption will again grow by about 10% a year" and will consume 1/2 of new production. This does not ring true to me. Seems like more complex story here.
Pg 96 - "no new energy supplies waiting to come online." But what about Alaska? If things get tough, we have the Arctic National Wildlife area right?
"Government debt at record highs ($7.8 trillian)" BUT - as an inflation adjusted percent of GDP how big is our debt? He doesn't say. Using absolute values like this is misleading.
Pg 99-100 - Leeb down plays downside of letting inflation rise to devaluded the dollar. Focus on inflation hurting returns, but not cost to business planning. Fed may not allow inflation for that reason.
Pg 112 - Leeb claims best strategy in the 70's is essentially to buy at start of a rally and sell at top of a rally. Nothing more then buy low, sell high. Not a great insight and no plan for the future.
Would be worth reading "The Prize" by Yeagin. This is written by a true oil industry insider.
Pg 141 - Leeb writes - "Only massive effort by Federal Government will be able to solve the energy crisis". Here he shows his statist bias. How about some trust in the power of capitalism?
Pg 149 - claims oil/gasoline price is subsidized by the US Government. He sites tax breaks, but this does not ring true to me. It seems like the government taxes gas and oil more then it creates special targeted subsides.
Pg 136 - Claims hydrogen from wind is a viable technology. This ignores massive problems with hydrogen storage and inefficiency of straight electrolysis. Basic physics is completely ignored.
Pg 173 - According to chart, gold peaked for a very short period around 1978/79, then has averaged approx $350 since. 1975 deregulated gold which accounts for the big increase and he uses that short peak when he describes the profit made from gold. Using such precise stock timing to make his point strikes me as dishonest.
Review This book predicted the housing collapse, the credit crunch and the problems we are having with gas and gas guzzlers
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