4. Construction Companies Tied to Oil Infrastructure and Refining
As the demand for oil increases in China, India, and around the world in the years ahead, we’ll need to find places to store it and ways to transport it. Infrastructure and transportation companies will do well in the coming boom. But don’t forget about the companies that design and build the pipelines, the refineries, the cracking facilities, and the export terminals. These “picks and shovels” companies will also benefit from this emerging trend. When we’re talking about picks and shovels, we’re talking about any businesses that provide the vital equipment and services needed to explore for and extract resources. The classic picks-and-shovels success story is set in the 1850s. Back then, a German immigrant moved from New York to San Francisco to participate in the California Gold Rush. Rather than the “all or nothing” route of looking for a big gold strike, this guy sold basic goods to the miners. He eventually started producing a new type of durable pants. They became a huge hit... And he became rich. His name was Levi Strauss. Levi didn’t risk it all on trying to find the big strike... He just sold the stuff everyone else needed to try to find the next big strike themselves. The idea of owning picks and shovels may be an investment cliché. But it can be an incredibly profitable, diversified way to profit from rising commodity prices. And that’s especially true in the oil and gas sector. In addition to the construction companies that will play a key role in the evolution of this coming boom, many other picks-and-shovels possibilities exist... including the next type of company to watch…
67
Made with FlippingBook - Online Brochure Maker