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Perspective

Deep drilling
Price action of crude has time and again proved that market gyration has very little to do with demand and supply

N Mahalakshmi

Last week, Goldman Sachs revised its 2015 crude price estimates downwards. Its report not just predicts that the price of crude could dip to $41, but also that the price needs to stay lower for much longer in order to curb production and end a global supply glut. Back in mid-2008 when crude was all fired up, trading at an all-time high of close to $150, the marquee investment behemoth predicted that crude will flare up to $200 because of global demand outstripping supply. Crude obliged by taking a kamikaze dive right after the Goldman prediction. It eventually bottomed out around $30. Is it time for crude to reverse course again? Price action has time and again proved that market gyration has very little to do with demand and supply; it is often dictated by other factors and this time the buzz is that it’s political.

So we headed right to Saudi Arabia, the biggest producer in the OPEC cartel and the epicentre of the current ‘standoff’ to meet the billionaire financier who has a ringside view. Prince Alwaleed Bin Talal is sought after not because he is the nephew of Saudi King Abdullah but because he is an astute investor. Not surprisingly, Alwaleed candidly talked about the long-term peril of a low crude price as a strategy to ward off competition from alternatives like shale, “It will be a race to the bottom and isn’t a good strategy.” Pleasantly, Alwaleed is all praise for Prime Minister Narendra Modi and hopeful that his pro-growth policies will take India to new heights. He happily shows us his tweets on Modi, made after the election results: “Impressive Indian Prime Minister.” If Modi walks the talk, Alwaleed is waiting to deploy his billions in India. Read our exclusive interview here.

Among other features, Motilal Oswal’s Raamdeo Agrawal talks about spotting stocks that can go up a 100 times titled How To Spot A 100-Bagger. For money to multiply 100-fold, a lot of factors have to go right. But along with the stock, you’ve got to mind your own behaviour. Buy right, be patient and the rewards will come. Heard that a hundred times before? Now, time to not just read, but also practice.

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