U.s. Global Investors, Inc. · NASDAQ:GROW
U.s. Global Investors — Investor Presentation (March 2006)
24 slides from U.s. Global Investors's investor presentation, March 2006
Slide 1: Oil & The Future
Oil & The Future Dr. Stephen Leeb, MegaTrends Fund (MEGAX) U.S. Global Investors, Inc. 7900 Callaghan Rd. San Antonio, TX 78229 210.308.1234
Slide 2: Dr. Stephen Leeb, Ph.D.
Dr. Stephen Leeb, Ph.D. Portfolio manager of the MegaTrends Fund (MEGAX) Author of The Oil Factor: Protect Yourself – AND PROFIT – from the Coming Energy Crisis
Slide 3: Energy and Investing
ENERGY AND INVESTING The urgent message for investors: Oil prices are on the rise the uptrend is long term rising prices will come to dominate the economic and investment outlook. Oil supplies will become inadequate sooner than is generally understood
Slide 4: Capacity Limits
CAPACITY LIMITS Back in early 2002, $30-a-barrel oil was widely viewed as an anomaly Most anyone with an opinion on energy – from Wall Street analysts to oil industry executives – believed oil prices were in a long-term trading range centered around $20 a barrel This opinion rested on the assumption
Slide 5: Capacity Limits
CAPACITY LIMITS Much of that capacity was in the hands of the Saudis – but Saudi Arabia had always proved a reliable supplier of last resort The emerging Russian oil miracle: from the late 1990s on, Russian oil production and exports had been rising sharply By 2004 - burgeoning demand for oil became
Slide 6: AMEX Oil Index Prices
AMEX OIL INDEX PRICES AMEX Oil index, XOI – price weighted index of the leading companies involved in the exploration, production and development of petroleum. AMEX Oil Index (XOI), 1988 - Present 800 700 600 500 400 300 200 100 0 12/30/1988 12/31/1990 12/31/1992 12/30/1994 12/31/1996 12/31/1998 12/
Slide 7: Are Oil Prices Headed Higher? Even if demand were to slow?
ARE OIL PRICES HEADED HIGHER? Even if demand were to slow?
Slide 8: Demand
DEMAND Lately oil has been in the headlines constantly as prices have reached previously unseen levels demand will continue to rise investors should respond Rapid growth in Asia will be a major reason demand for energy will accelerate
Slide 9: Energy Demand: World Primary Energy Consumption
ENERGY DEMAND World Primary Energy Consumption http://www.eia.doe.gov/oiaf/ieo/world.html 700 623 HISTORY PROJECTIONS 568 600 517 Quadrillion BTU 500 471 404 400 348 369 311 285 300 243 207 200 100 0 1970 1975 1980 1985 1990 1995 2001 2010 2015 2020 2025
Slide 10: Possibility Increases in Supply
POSSIBILITY INCREASES IN SUPPLY To the extend that Saudi Arabia and Russia can produce extra oil inevitable that they will need to consume much of it themselves Enormous investment in which ironically growth requires energy
Slide 11: Russia
RUSSIA In the 1990s and early 2000s, Russian GDP dropped by more than 30 percent. Good thing for the rest of the world Russian demand for energy fell by 20 percent 1. If Russian energy consumption had grown by just 2.5 percent a year during the same period 1. Russian consumption by 2004 would have n
Slide 12: Saudi Arabia
SAUDI ARABIA Internal consumption of oil production has been in a sharp uptrend Energy-intensive economy growth has exceeded 4 percent energy use has grown by 12 percent
Slide 13: Bottom Line
BOTTOM LINE While oil may be volatile shorter term – Longer term there are simply no scenarios apart from a massive worldwide recession As long as growth in oil supplies isn’t keeping pace with growing demand, oil prices will continue to rise Whether curbing demand or boosting supplies…highly unplea
Slide 14: Inventories
10 /2 6/ 19 250,000 270,000 290,000 310,000 330,000 350,000 370,000 390,000 410,000 84 10 /2 5/ 19 85 10 /2 4/ 19 86 10 /2 3/ 19 87 10 /2 1/ 19 88 10 /2 0/ 19 89 10 /1 9/ 19 90 10 /1 8/ 19 91 10 /1 6/ 19 92 10 /1 5/ 19 93 10 /1 4/ 19 94 10 /1 3/ 19 95 10 /1 1/ 19 96 10 /1 0/ 19 Crude Oil Inventories
Slide 15: Ultimate Answer
ULTIMATE ANSWER Development of alternative energies Likeliest to have the most immediate impact on helping us meet our energy needs Nuclear energy Wind Energy Tar Sands Liquefied natural gas
Slide 16: Investing
INVESTING Heavily in stocks that are suitable for both inflationary and deflationary portfolios Big players in alternative energies Wonderful hedges All-weather stocks that can go in any portfolio
Slide 17: Recommendations
RECOMMENDATIONS Exelon Entergy Air Products and Chemical (inflationary portfolio) Canadian Oil Sands FPL Group Of course direct energy plays as well
Slide 18: Exelon
EXELON Nuclear energy will temporarily fill the gap Exelon is the nation’s largest nuclear utility entire fleet is unregulated Potential expansion and building additional facilities Could result in double-digit profit growth
Slide 19: Entergy
ENTERGY Nation’s second-largest nuclear utility Capacity is regulated More downside protection in the event of a recession and upside exposure to nuclear energy
Slide 20: Air Products and Chemicals
AIR PRODUCTS AND CHEMICALS Liquefied natural gas (LNG) has the potential to add the equivalent of about 5 or 6 million barrels a day to the world’s energy supply Heat exchangers - vital components in converting natural gas into liquefied form Also produces hydrogen - vital in refining alternative fo
Slide 21: Canadian Tar Sands
CANADIAN TAR SANDS Nearly 180 million barrels of oil sands reserves - tar sands are the second largest source of fossil fuels in the world The Catch - difficult and expensive to mine these sands Still an important energy niche
Slide 22: FPL
FPL Wind the most promising alternative energy Best-situated all-weather stock 85% of revenues from being a regulated utility in Florida staid but steady income Nation’s Largest wind generator (General Electric - is the largest integrated wind company)
Slide 23: Continuing Uptrend
CONTINUING UPTREND Turbulent times that lie ahead What to buy and what to avoid in order to protect yourself and profit Upside potential for investors is enormous
Slide 24: Disclosures
DISCLOSURES ’ !"" !#$ $%$& ' ( ) *+ , - . ! " #$% & ' ! (% &' ! )* *+ " * , + , * * - ") # .* + ". / 0
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