Beyond Gold: 6 Overlooked Alternative Investments
With gold at a record high, these investments may shine.
Oct. 4, 2010— -- There are those who will tell you that gold still has room to roam: that you ain't seen nothing yet. That even though an ounce right now tops $1,300, you should hock your kids to buy some.
At least, that's the advice of Dan Oliver and Dan Mahony, who think gold could peak at over $10,000. The two Dans follow the gold market.
"Gold is hardly over-owned," Mahony says. "All the gold in the world, at today's prices, is only worth eight-tenths of a percent of financial assets, versus nearly 5 percent in the 1960s.
"If you adjust gold's price for increases in the money supply -- which the Fed keeps raising -- gold is actually near its all-time low," Oliver says.
Be that as it may, if you're skeptical and feel you can't afford to buy in now, here are other opportunities you might consider:
If you own land with oil shale on it, you're in luck. Shale deposits cover North Dakota, much of Montana and parts of Colorado, Kansas, Nebraska and Wyoming.
In late September, the value of shale oil leases leaped, following announcement of a new process that makes oil extraction more economical.
Before this discovery, extraction was profitable only when oil was trading at $70 a barrel or higher. (Right now it's at about $80.) The new technique drops the threshold to $50. Mineral leases that would have sold two years ago for $10 an acre now are selling for $5,900, according to industry consultants Wood Mackenzie.
The value of oil shale may increase further as the extraction process becomes even more efficient.
"Will there be further advancements? Absolutely," says Harold Hamm, chief executive of Continental Resources, one of the developers.
"Real men don't buy gold," argues writer Joe Eqcome, who dismisses gold as a "pantywaist" investment. The reason? If civilization truly falls apart, the things of value will be the basics: food, potable water, clean air, energy, guns and ammunition. His Survivor Index compares gold's performance to a composite average of the stocks for seven companies making stuff survivalists will want to have--canned food (Ball Corp); air (Airgas); potable water (Dr. Pepper); guns (Smith & Wesson); and energy (Cummins). Since 2000 the Index has outperformed gold handsomely.
