Friday, April 28, 2006

Spot forgot

Spot forgot to mention a couple of things in his last post Invisible hand job.

First, Sticks says in his comment to The Power Liberal post that margins aren't particularly good in the oil business compared to some other businesses. Of course not, you numbskull, it's a commodity business, not the jewelry business. Cargill and Archer Daniels Midland don't have big margins, either, but manage to do pretty well, thanks. It's all, well mostly, about volume. This is neither here nor there, save to say it has nothing to say about rate of return.

Second, both the public and the business and investment community suffer from the same limited event horizon. Neither can imagine a world dissimilar from the one in which they currently live. But very different the future is likely to be from an energy standpoint. And the public will be inclined to punish our poltical leaders rather than our business leaders. This is probably as it should be, since it is unrealistic to expect business to do anything other than try to maximize profits.

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