Product Description

In The Oil Factor, Stephen Leeb accurately predicted the current oil shortage and showed how savvy investors could profit. But now the world is facing an energy crisis of unprecedented scope, and the recent surge in oil prices is only the tip of the iceberg. With meticulous research and analysis, Leeb shows that due to strong competition from India and China for the world?s oil reserves, prices could soon top an astounding $200 a barrel, bringing an economic collapse that most countries and investors are ill-prepared for. Now in this groundbreaking book, Leeb shows how this crisis will affect you, but how savvy investing can turn these dire times into financial gain.

Product Details

• Amazon Sales Rank: #592852 in Books
• Published on: 2007-02-21
• Format: Bargain Price
• Number of items: 1
• Binding: Paperback
• 224 pages

About the Author
Steven Leeb is President of Leeb Capital Finance and editor of Personal Finance, a financial newsletter that has been honoured as 'the best in North America'. A Ph.D and academic prodigy, he has degrees in economics, maths and psychology and has written

Customer Reviews

Get out of oil-dependent assets, as long as politics corrupt, energy policy will never be real

I am giving this book a 5 instead of a 3 or 4 because I believe that it does a superb job of laying out some facts that every normal adult needs to understand, and I want to encourage everyone to buy and read this book.

That having been said, I also found it disappointing. The author's main points can be summed up in this review, and take less than an hour to absorb in the actual book:

1) Peak oil and the need for alternative energies are being over-shadowed by myopic media and lack-luster academics that focus on poverty, climate change, terrorism, everything but the core Achilles heel of the Western world, its addiction to cheap oil which is no more.

2) Cheap oil is made possible by blatant political and financial maneuvers that enrich a few and set the rest of us up for life long poverty. Government subsidies and tax breaks purchases by expensive lobbyists giving expensive gifts and cash bribes to our politicians are directly responsible for pre-determined failure of our energy policy and the lack of an energy strategy.

3) The catastrophic nature of the collapse of cheap oil is dramatically enhanced by the combination of the *huge* U.S. deficit and by the increased prospects of war over oil.

The author concludes with some bottom line advice for investors: get out quickly from stocks associated with high oil usage (airlines, autos, chemicals; followed by cosmetics, food requiring processing and transport, and retail dependent on far away factories and raw materials).

I disagree with one key point he makes. He assumes that Wall Street and the media have been ignoring this problem because of "group think." I certainly do agree that the larger mass of the public and the average bureaucrat that do not know any better have fallen prey to unethical propaganda, but I am quite persuaded by Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy; Crossing the Rubicon: The Decline of the American Empire at the End of the Age of Oil; The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century and other books that this catastrophe in the making was clearly understood by the White House and the US Senate in 1974-1979, and a very deliberate selfish even treasonous decision was made to profit in silence and let the people fry.

This is a much simpler book than most of the others I have read and recommend, but I give it a solid five stars because if you can only afford to buy and read one book, this is the one that will be easiest and most to the point.

And just to drive the point home, when WIRED had the cover story on alternative energy, Cheney was meeting secretly with Enron and Exxon, and went on to amass 25 documented high crimes, 23 of itemized in my review of this book (Cheney makes Agnew and Johnson look like wall-flowers--this is the guy that put HIGH into "High Crimes."
Vice: Dick Cheney and the Hijacking of the American Presidency

Ignore the lurid, juvenile title.
The only disappointing thing about this book is the title. If I had not already read Leeb's previous book, 'The Oil Factor', I probably would have passed on this. Instead, I bought it immediately. The title puts it in the same crackpot category as Ravi Batra's rantings and the old gold bug diatribes from the 1970s, and that's a shame.

The book itself is an interesting sequel to the 'Oil Factor', but not quite as eye-opening since I've had 2 years to get into Peak Oil literature and energy investing. Leeb is an investment advisor, and his books are clearly biased toward the profit motive. His best contribution in the new book is his neat explanation of why Peak Oil isn't all over the media. Leeb's background is in psychology (a PhD), and he explains the psychological theory of "groupthink" where the best and brightest in government, industry, and academia simply go along with a consensus way past the point where it makes sense. In this case, the idea that there's plenty of oil out there is the groupthink chant coming from the likes of Rex Tillerson (Exxon CEO) and Daniel Yergin. The rest of the world then follows along. On the other hand, Leeb's investment advice is conservative enough that if Rex and Dan turn out to be right, you will end up owning some fairly conventional large cap investments like GE, Exxon, Schlumberger, P&G, and a few utilities, as well as some gold. Not a bad portfolio.

Leeb also differs from James Kunstler ('The Long Emergency') in his optimism for alternative energy sources. Kunstler would call this "cargo cult" mentality, where those technological/free market demigods will come down from the sky and give us the great gift of a cheap, non-polluting replacement for oil/gas/coal.

I'd give 'Oil Factor' 5 stars simply because it made me some money and clued me in, and this one 3 stars -- a decent book but kind of superficial compared to the other peak oil lit. However, the seriousness of the situation is starting to dawn on people like Leeb. The energy situation, if it's as bad as peak oilists think, is more than just a chance for a few clever investors to make a pile of money (see Richard Rainwater's comments in a recent issue of FORTUNE), it's a real emergency. Leeb thinks it's a matter of survival, and believes that whether we like it or not, families with the most money will have a better chance of survival in a very dangerous future.

A Must-Read
This is a funny book. I am quite interested in the subject of peak oil, and for a non-geologist, fairly well acquainted with the science behind it.

What's funny about this book is that the title and the cover lead one to think that it's another "How to profit from the coming asteroid strike!" investment books. I picked it up expecting little more than a good laugh, and ended up shelling out hard cash for a full price copy -- something I rarely do, and I have the receipts from Amazon to prove it.

I find much to agree with in the review written by "a diplomatic historian," but here's the nub of the problem:

"This book is based upon the major notion that growing energy demands from China and India will squeeze us and propel oil prices into the stratosphere. This is self-correcting through normal economic processes."

No, it isn't self-correcting through normal economic processes, unless one includes stratospheric oil prices as a normal economic process.

Almost 30 years ago, a song by the band Tower of Power warned that "there's only so much oil in the ground." The song was written during the first oil crisis, which as Leeb points out was really a political crisis rather than a supply crisis. It turned out that there was considerably more oil in the ground than most people would have thought in the late 1970s. However, Tower of Power basically had it right. Natural economic processes hold great sway over natural resources -- up to a point. But if a resource is truly in short supply, economic processes cannot conjure more of it out of thin air. If they could, we would be buried in cod, what with the prices having gone up manyfold in the last decade or so.

In any event, this book is very much worth reading for its clearly argued contention that a shortfall of oil supply is about to push us towards a very serious economic and social crisis. Leeb is right about the growth of China and India and he's right about the lack of growth in oil production. In short, he's right.