Wednesday, June 01, 2005

One of the smarter guys in the room

Peter Thiel, in my humble opinion is one of the smartest and most articulate investor / fund manager around. He was the co-founder of Pay-Pal and now manages $ 700 Million at Clarium Capital Management LLC in San Francisco.

He takes an intermediate to long term view of things (3-10 years).
His current calls (May 31st 2005) are
  1. Long on the dollar – believes that dollar will strengthen against the Euro
  2. Long on oil – believes oil will hit $80-100 per barrel in 5-10 years – recommends Canadian tar-oil stocks

Opti Canada
Western Oil Sands

  1. The housing bubble will gradually deflate when the Fed stops its rate increases by late 2005

I think I agree with his opinion on the dollar, after all as long as the welfare loving Europeans prefer afternoon siestas, wine and cheese to actually working the Euro isn’t going anywhere, after this weekends French rejection of the European constitution – its going to be even harder to get any business friendly legislation done. The Japanese are recovering but in the forex market it’s all a relative game and comparatively the US seems to be doing fine although not roaring along. I have to say I had recommended buying Euros in January 2005, but after a brief rally in March its been all downhill since, lost my shirt on those leveraged deals.

I cannot say anything about Oil, although as a small investor I would not invest in such small and speculative companies, it always pays to hold some large Oil stocks in your portfolio like Exxon, Shell, BP or Chevron – after all oil pretty much runs the engine of the world economy (no pun intended).

The housing phenomenon is an enigma to me – having always lived in the North-east and California my views are biased – In my experience housing prices were high in 1999 and they are higher today in 2005 – its as if the prices never really went down, so yeah maybe we’ll see a slight dip but as far as I am concerned a house is a place I got to have a place to live. So well if housing tanks - I dont think it will, so I would still hold on to the Home Depots and Lowes of the world.