Petrol Prices Up!

I had just finished my dinner at Al-Amin near Upper Changi Road . It was a filling meal (one day i will write up a post on it.) and was happily slowly walking back home when i passed by Shell Petrol Station. I was shocked and flabbergasted (Couldn’t help taking the pun with our dear Home Minister Wong Kan Seng words of wisdom.) The prices all went up with Shell 98 coming at $2.310 per litre.

What the crap is this!

What’s with the rise?

I am shocked as news have actually been good indicating that oil prices should go down. The United States (The World’s biggest oil consumer) has actually seen a dip in their usage of oil. Saudi Arabia (the world’s largest oil consumer) have promised to raise productions from 9 million to 9.7 million barrels a day from July onwards. In reality, this should cause a drop in oil prices.

And yet oil continues to climb and hover around $134 a barrel. I do concur with the Chairman of Opec when he said that this is no longer about affected supply of oil to the world. Rather it’s caused more by speculators simply pushing the prices up higher and higher. Just as what happened to Gold ($887) and Platinum ($2029). Due to the weakening US market, investors are spooked and have few options to place their money. 

AS always, whenever a disaster or calamity occurs, investors will quickly run for the hills with their tails or rather their money to commodities. When 911 happened (I was having my JC1 Promos the next day) , i saw that oil and gold prices rose drasticly as frantic investors quickly displaced their money. At times i despise such investors. I understand that most investors are there to earn money and increase or protect their wealth. So they use stocks to ensure their profits.

Owning a company share was once actually respecting and believing the company. It was once filled with honour and principles to own company’s share. However, in today’s day and age, investors are unlike past investors. It isn’t the case anymore about whether they believe in the CEO or it’s board, whethere the company has high morals and improves the society.

Now, it’s all about how much profit does it make QUARTERLY. And whether their profits continue to increase each year. It’s no longer based on principles or whether the company does a lot of charity, having good work motto and habits to improve and aid the society.

I have always had a stick as to why must a company aim to have increasing profits each year. I understand that it indicates the company is growing and that it is continually expanding. However, is it so important to continually expand? I believe prices should not be based on profits but also on other aspects such as creating job opportunities for a nation, welfare and relief to charities, useful & innovative inventions, good principles and service.

At the most, a company should aim to at least have growth which is slight above the inflation rates to ensure that a person’s wealth or stock is not shrinking. There has to be a radical paradigm shift in the mentality of investors. Investors have to change their attitudes to choose a stock not because it has a catchy name, that it continues to make profits but rather have faith in the Goodness of the Company.

Only once investors have such a mentality, there will be no worry as to rises in oil prices or commodities due to weakening of US Markets. Indeed, are companies closing down in America? Are services and goods dwindling over the months? Have anything crashed?  As far as i can see, the banking sector digged their own grave by folowing bad principles of not properly choosing suitable loan applicants. Yet, the economy still runs. Computer, Health, Technology, Lifestyle, Maufacturing, Agriculture industries are all still running!

I am still keeping my shares of Visa, Nvidia, Applied Biosystems & Domino’s Pizza. Although they do give continued expanding profits, i choose them not for the earnings but as companies that have solid foundations & principle, companies that identifies me and am proud to hold their shares. I guess everyone have their freedom to choose which aims they want but i do hope people begin to realise that their actions inadvertently troubles the world. (As those investors that have parked their cash in commodities.)

All i can do now is just wait for the US elections (Let’s hope it’s Obama!) to boost their economy once again. Thus, these foolish investors will once again go hunting for US stocks that will finally reduce oil & commodities prices. Till then, i think i should either start cycling around or begin researching in my laboratory on bacteria that will increase rate of decompostion of wastes to ethanol. At least i can use some for my car.   

P.S. For avid petrol watchers – Petrolwatch.com.sg

Fai @ ilovelookinggood