View the article online at http://citywire.co.uk/money/article/a602645
Diary of a Dumb Investor: I'm going to make a fracking killing
I've hit onto a cunning investment idea, but it'll make me a total hypocrite. I'm grateful for my anonymity.
So a bloke in the Jolly Gardeners tells me that America is undergoing an energy revolution – ‘fracking and horizontal drilling’.
Sips his Guinness. Sucks a pork scratching.
‘This means that companies making nitrogen-based fertilisers are quids in…’
‘Whoooaaa, what?’ I interject. Fracking, I’ve read about – beyond that I’m clueless.
Well, some Googling later and I can tell you that nitrogen processing uses lots of natural gas, which has been getting much cheaper as a result of fracking leading to a supply glut. Lower natural gas costs for fertiliser-making companies = ker-ching!
This is good to me. A financial dud I may be, but I’m comfortable in the world of science. Finally, I might be investing in something I can understand (though admittedly, my scientific background is limited to the rather niche study of fungus).
Shrewder investors than me are of course already onto this. Cormac Weldon, a fund manager for Threadneedle, is investing in companies that make nitrogen-based fertilisers. One of them is a US company called Lyondellbasell.
But it remains early days. Fracking is still shiny-new.
So now I’ve freed up some cash, I might have a crack. Or a frack. Maybe stick a cool thou on it.
Of course I’m compromising my environmental credentials here. When I started investing I despised folks who could talk about oil, tobacco and arms companies only in the cold diction of financial abstraction.
But, hiding safely behind my anonymity, I’ll readily admit that profits have begun to come first. Shame on me.
News sponsored by:
The Citywire guide to investment trusts
In association with Aberdeen Asset Management
Andrew Friend, acting co-manager*, and Marcus Langlands Pearse, co-manager of the Henderson UK Property Unit Trust (HUKPUT), provide an overview of the key risks and opportunities for the UK commercial property market.
More about this:
More from us
- Diary of a Dumb Investor: Diamond’s raspberry in your face
- Diary of a Dumb Investor: everyone says buy BP. I say run
- Diary of a Dumb Investor: I won't be following America off a cliff
- Diary of a Dumb Investor: Lloyds in the eurozone scrapyard
- Diary of a Dumb Investor: where has my money gone?
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.
by Gavin Lumsden on Apr 23, 2014 at 09:00