Monday, July 28, 2008

Petrol proves a hit with small investors

Pay attention, I’m going to make you rich.

Like me, you’ve been watching your assets evaporate in recent months. Your mortgage is going backwards, that rental property you bought a year ago at the top of the curve is running rapidly downhill and the dabble on the stock market proved to be very bad advice.

You look around and ask yourself what’s increasing in value? And the reply is – commodities. But little guys like you and me can’t afford shares in mining companies or steel mills and we can’t invest in milk unless we own a few hundred cows.

But there is one commodity we can all get a stake in. It’s local, it’s profitable and it’s available.

I’m talking about petrol, and I don’t mean trading shares in oil companies: I mean literally buying petrol.

Think about it. Four months ago a litre of 91 octane was worth $1.76. Today it’s $2.18. If I had bought 1,000 litres of petrol four months ago, costing $1,760, I could sell that today for $2,180. That’s a profit of $420 or about 25%. What other investment today will return 25% in four months? That’s 75% profit per annum!

What’s the risk? Nil. The international oil geezers say petrol prices are going up until 2013. It’s a sure-fire, can’t-lose, gilt-edged investment and you heard it from me.

Investing in petrol is perfect for small buyers like ourselves. Listen up and I’ll tell you how it’s done.

What I do is collect the empty milk containers and Coke bottles from the neighbours’ green bins on a Monday morning (I pretend to be jogging with an empty wool fadge). Then every time I fill up the car I also fill up a few extra containers. I’ve got about 3 or 4 hundred of these stacked in the garage. Recently I extended the mortgage a bit and moved into 10 litre paint buckets and I’m about to step up again thanks to a farming friend who’s just dropped off a few 100 litre offal drums.

You can pour petrol into pretty much any container but you have to be careful you don’t overreach yourself. A mate of mine rang BP recently and asked them to deliver a tanker load around to his house. He’d lined an old septic tank with polythene and reckoned he could get a few thousand litres into it. As it turns out there are rules about things like that, so my advice is stay fairly small and low key.

One thing you want to be careful about is security. You’ve got to protect your investment and we all know there are a few mongrels who’d be into your stockpile given half a chance – even here in Tinwald.

I’ve hidden most of my petrol in an old coal bin behind the garage. Other investors store it beneath the floorboards or behind the fireplace. One mate of mine filled an old beer fridge in his garage, which caused a couple of problems when some mates called around unexpectedly for a few bevies. Now he’s got two fridges, one labelled ‘beer’ and the other ‘petrol’.

I’ve been giving some thought to the selling side of things. Obviously guys like you and me can’t just set up a forecourt on the front lawn. However, if we keep it simple we can sell all we like and the people we’ll sell to are the idiots who, for the sake of a few dollars, drive their cars on empty and keep running out of gas. Apparently this is happening all over the place. So when I’m ready to sell I’ll simply fill the station wagon and peddle the stuff along a stretch of SH1.

The added bonus of this strategy is that guys who’ve run out petrol in the middle of nowhere will pay top dollar. I could probably charge $3.50 a litre and if they don’t want to pay I can rent them a bicycle!

Direct selling of this nature will become competitive and I predict we’ll see turf wars on popular stretches of highway, along the lines of the famous whitebait wars on West Coast rivers. With that in mind I’ve been putting out feelers to the Triads for security. The closest I’ve come is a local Tri-Hard gang up on Melcombe Street. They might do it - I’ll keep you posted.

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