Publications: Notes at the Margin

Some Lessons from History (February 13, 2012)

 

History is a harsh teacher, especially for those who sleep in class. Anyone buying, selling, and investing in oil is now being reminded or will soon be reminded of past lessons. Those buying oil out of concern that a dispute with Iran will send prices skyward will likely be rewarded with large losses as prices drop in the immediate aftermath of the attacks. Those investing billions to produce oil from the tar sands are now realizing the tragedy of “sunk costs” as prices collapse. Those expanding refinery capacity on the US Gulf may soon have a similar epiphany as the industry experiences its “Kodak moment.” Those wanting to succeed may do better by reading more history and focusing less on chart patterns.

 

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