hytaki
Beginning Investor
Posts: 1 
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Post by hytaki on Sept 28, 2008 18:33:32 GMT -5
In somewhat of an amazing coincidence to the mess on wall street as I am writing this, I have a game that I have been playing off and on for awhile now (in year 2015) and for the first 5-7 years things were going gangbusters, even with the $100 dollar/bbl new "standard oil price. Then comes the last couple years, an oil shortage even that has shot the price of oil up to 300-350 depending on the quarter. Has anyone had this happen to them? there are banks going bust left and right and probably 75% of the messages are bankruptcies.
Yikes!
My wealth has been hit but I am solvent and sitting on about a bill and a half with my original bank being the only independent company I won left, I've had the bank buy up my holding co so that there is a vehicle for the bank to rejuvenate seized (bankrupt) companies.
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Post by jmart2387 on Oct 2, 2008 22:45:29 GMT -5
Now would obviously be the best time to play the oil boom, either with an integrated oil or oil service company. Now is also the best time to buy everything else (especially banks), assuming that your interest rates are through the roof.
A bank generates awesome earning power if you have it solely invest all its equity in business loans. If you get control of a bank and dump all bonds and mortgage and consumer loans, you reduce the risk of writedowns to 0 if you don't hold any D rated loans. When interest rates shoot up like I assume they are for you right now, highly leveraged banks usually shift to negative equity because of declines in the bonds they hold and loan writedowns. This can be easily solved if a bank has their own bonds outstanding. Usually their own bond prices are heavily beat down, so if they would only dump a few loans and pay off their bonds, their equity would shoot right back up.
I say this because I actually like the game so much better when interest rates are high. This prevents awesome buying opportunities, and depending on how much money you have right now I would take advantage of them. If there are so many bankruptcies, there should be a ton of companies with D credit ratings that can buy back their bonds on the cheap and you will reap a huge profit.
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Post by wowposter on Nov 8, 2008 7:58:53 GMT -5
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Post by ddddyyyy on Sept 9, 2009 1:47:34 GMT -5
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