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Harry Newton's In Search of The Perfect Investment Newton's In Search Of The Perfect Investment. Technology Investor.

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8:30 AM EST, Tuesday, March 20, 2007: We squander energy. We finance our own insecurity. But there is good news. Silicon Valley is investing massive monies in new non-oil, energy sources. And the upcoming energy crisis will finally force us to do something.

This is the last slide of 40 in a presentation that Matthew Simmons, a world energy expert, gave in early March:

In the talk he talks about America's long oil history:

But our oil is running out, so...

But there were problems with this thesis...

So, what now?

For the entire Simmons presentation, click here.

I asked my own energy expert, Jim Kingsdale, for his interpretation:

I think Simmons speaks the truth regarding declines in oil production from old fields, which will cause global oil flows to peak very soon. But there are also a growing number of mitigations in development, including especially new technologies for producing renewable energy (solar, wind, geothermal, ocean wave, biodiesel, ethanol, coal-to-liquid, and coal-to-gas). Also, there are huge savings in fleet mileage possible with emerging developments in hybrid, hybrid/diesel, and plug-in hybrids, all of which will be accelerated by new developments in battery technologies and some nanotechnologies.

My sense is that the "energy crisis" will develop as a series of step functions. Oil will go to $100 - $125 when we recognize that production has peaked and cannot be expanded, which I expect within the next 18 months. That will temporarily reduce demand and a temporary glut will appear, bringing the price back down below $100 for a while. Then, as the global production plateau begins to go into recognizable decline, maybe in 4 years, the price will spike again - maybe to $250. Then another decline in demand will cause a temporary pullback.

Each new plateau will give added impetus for the implementation of more energy saving behavior changes, particularly added fleet efficiency through the availability and, more importantly, the public's purchase of more fuel efficient cars and trucks. Also, the price spikes will spur more production of ethanol, bio-diesel, and coal liquids and more transfer of work from cars/trucks to trains and boats, and more intercity and intracity light rail. And they will also spur the growth of alternative electricity generating capacity from nuclear, wind, solar, etc. and the migration of transportation from petroleum dependency to electricity dependency.

So ultimately society will adjust to the reduction of oil availability of maybe 87 million barrels a day in a year or two down to, say, 75 in ten years and 65 in 20 years. We'll be able to grow the economy despite these declines because we'll be using more electricity generated by non-petroleum means and by investing in more efficient transportation alternatives (the car and truck fleet and light rail)

But I suspect that these substantial increases in the price of oil, when they come, will be sufficiently shocking to the economy and the psychology of the market, that when they occur it will not be very pleasant to be invested in common stocks. Oil and oil service stocks should fare better, but when things go down hard everything gets impacted. So there may be very few places to hide.

In sum, it's not the end of the world. But it is the end of the era of cheap oil that has allowed us all to squander it. And it may be the beginning of the end of a number of personal and geopolitical habits, like flying anywhere at the drop of a hat, living 50 miles from work, or thinking that the U.S. can afford a global military presence. As always, the rich will find a way to have fun throughout and the poor will pay the biggest price -- and that will hold true both for individuals and societies.

Buy a piece of dubious history: Ken Lay's jinxed desk. The first bid is $25,000. But you can still bid on Ken Lay's desk. Click here.

Houston, Texas, March 16 -- Saving Animals announced today its receipt of the executive desk used exclusively by Mr. Ken Lay, Founder, Chairman and CEO of Enron, from 1987 through 2002 and the executive desk used by Mr. Richard Kinder and Mr. Jeffrey Skilling while Presidents of Enron. The custom furnishings were donated to Saving Animals, a non-profit animal protection organization. The charity will auction the items exclusively through e-Bay beginning March 16, 2007 and ending March 26, 2007 with proceeds to benefit the group’s programs to help animals and community improvement.

The one-of-a kind desks were designed by Gensler Architects and fabricated by Brochstein’s, one of the nation’s premiere manufacturers of custom architectural furniture. According to Brochstein’s, the desks, with an elegant Makore Pommelle veneer, would cost well into five-figures to replicate today, in addition to the iconic value and the historical significance of the pieces. Provenance, the documented ownership histories that confirm the authenticity of the furniture, available for review and provided to successful bidders.

Saving Animals was selected as the recipient of the unique gift because of its commitment to the City of Houston and its citizens to address the tragedy of pet-overpopulation by providing sterilization surgeries for dogs and cats, preventing homeless animals, and promoting adoptions.

Sean Hawkins, Founder and President of Saving Animals reminds, “It is fitting that something positive will come from the sale of the Enron Building to help the community. By spaying or neutering pets, and promoting adoption of homeless animals, we’re keeping strays off the streets and creating a healthy community for animals and people,” said Hawkins.

I don't make this stuff up.

Yellow Rain
Two Irishmen, Patrick Murphy and Shawn O'Brian grew up together and were lifelong friends. But alas, Patrick developed cancer, and was dying. While on his deathbed, Patrick called to his buddy, Shawn, "O'Brian, come 'ere. I 'ave a request for ye." Shawn walked to his friend's bedside and kneels.

"Shawny ole boy, we've been friends all our lives, and now I'm leaving 'ere. I 'ave one last request fir ye to do."

O'Brian burst into tears, "Anything Patrick, anything ye wish. It's done."

"Well, under me bed is a box containing a bottle of the finest whiskey in all of Ireland. Bottled the year I was born it was. After I die, and they plant me in the ground, I want you to pour that fine whiskey over me grave so it might soak into me bones and I'll be able to enjoy it for all eternity."

O'Brian was overcome by the beauty and in the true Irish spirit of his friend's request, he asked, "Aye, tis a fine thing you ask of me, and I will pour the whiskey. But, might I strain it through me kidneys first?"

Keeping informed
A sweet grandmother telephoned St. Joseph's Hospital. She timidly asked,

"Is it possible to speak to someone who can tell me how a patient is doing?"

The operator said "I'll be glad to help, dear. What's the name and room number?"

The grandmother in her weak tremulous voice said, "Norma Findlay, Room 302."

The operator replied, "Let me place you on hold while I check with her nurse." After a few minutes the operator returned to the phone, "Oh, good news. Her nurse has told me that Norma is doing very well. Her blood pressure is fine; her blood work just came back as normal and her physician, Dr. Cohen, has scheduled her to be discharged Tuesday."

The grandmother said, "Thank you. That's wonderful! I was so worried! God bless you for the good news."

The operator replied, "You're more than welcome. Is Norma your daughter?"

The grandmother said, "No, I'm Norma Findlay in 302. No one tells me crap."

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads. Thus I cannot endorse any, though some look mighty interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Claire's law school tuition. Read more about Google AdSense, click here and here.
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