JBL: Ahead of the Curve

The key to making big money is being ahead of the curve. The further ahead the better.

T. Boone Pickens has spent his life ahead of the curve. He made money in oil when no one wanted to own oil. He saw the coming energy crisis. People considered him crazy, and with a name like T. Boone, that moniker seemed to fit. Now people just consider him rich.

Growing up in West Texas, I learned a couple of things were true: Friday nights were reserved for high school football, and summers had water rationing. T. Boone is now buying up water rights in the West Texas Ogallala aquifer. Some believe he will make more off water than he made off oil. He is still way ahead of the curve.

The only way I have found to play the water shortage is like T. Boone, to buy up water rights. This is becoming increasingly difficult to do. However, the way T. Boone first made his money is still the way we can make money now: Buy oil while prices are falling.

In my first article for TheStreet.com, I recommended to shy away from oil and go with big-cap companies. I believe it is now time to buy back into oil and be ahead of the curve.

I believe gas prices are down due to summer driving season being over. But the supply and demand issues have not changed; prices are taking a breather, nothing more. If this is an unusually cold winter, prices will get higher sooner rather than later.

Amerada Hess

Oil companies hedge future oil prices to reduce volatility. The bad news is that Amerada Hess (AHC Quote) did a terrible job of hedging this year and managed only to reduce its profits.