when I said:
"tell him to invest in oil companys since they are going to keep finding more and more oil forever since god wills that there is an infinite amount. great way to play the market on his divine stock tip. see if he'll really put his money where his mouth/faith is."

and you responded:
LoneSnark: “Uh, if oil is plentiful and forever available, thus cheap, then owning stock in an oil company is a bad investment.”

If I had said make sure to stay away from oil stock instead, as a means of putting your money where your mouth is, then I’m sure someone would have said “oil is a solid bet, if there wasn’t unlimited amounts, then it’ll eventually run out which would cause the oil companies will crash.”

I think a company that can sell a cheap product, & will never die b/c it runs out of products might be a good investment. I mean walmart sells lots & lots of cheap products, its not like it floods the market to where it doesn’t make a profit… people keep needing new clothes, more food, & more oil.

But they can charge higher prices b/c people think it’s a limited resource, even though god will magically make more oil as needed, so it’s actually a good investment.

Maybe I was wrong on how the economics of the situation would go… but I was afraid I’d be called out regardless of what said… my only point was to see if one could find some way to get him to put his money where his mouth/faith is to see how strong that 7000 year old magic oil belief is. It’s easier to have convictions that don’t affect your wallet.

4/26/2006 8:35:33 AM

^ True, it is a situation that is not-obvious to read. So I guess, for the sake of wasting time, I'll break it down.

An oil company usually has many parts that work together. However, these parts respond differently to considerations of future oil shortage.
Owning stock in an oil company presumes ownership over oil wells and, more specifically, oil underground. The value of this oil increases dramatically if God isn't making oil and no new oil is discovered (instead of $20 a barrel, the oil is worth $120 a barrel, big windfall, etc). However, it is kinda a gamble on your part, because the expected value of the oil is included in the price of the stock. So, if God floods the market and the price drops to $10, your ownership of oil has lost you a lot of money.

Conversely, oil company also own refining and distribution systems. These industries are the exact opposite: if the supply of oil drops, the demand for oil refining and distribution drops, eventually causing bankruptcy and closure.

Now, as far as things go, the potential losses on both oil wells and refining are fundamentally limited to the amount we already have invested. At the same time, the potential profits of oil refining are also limited because competitors exist that can build new refineries and compete, driving down profits potentially to zero (just because the industry overall is successful doesn't mean I am).

Here is the crux of the situation: the potential profits of owning oil wells are NOT limited in such a fashion. If God decreed that no other oil existed on the planet then no matter how much time passed my profits could not be eaten away by new-commers.

4/26/2006 9:42:24 AM

^supply of oil is not the only thing that determines the value of oil. The existence of substitutes can also cheapen the price of oil. If an alternative source of energy were viable and affordable, you could see the demand for oil go down, thus lowering the value.

4/26/2006 9:44:37 AM

^ You must remember, I said "God Decreed" which means no other variables, including new technology, are allowed to interfere in my metaphore.

4/26/2006 9:46:38 AM

ah, so using the economics term, "ceteris paribus" your metaphor works.

4/26/2006 9:49:55 AM

Quote :

"So no, it doesn't strain our relationship whatsoever."

sorry i guess misunderstood your original post.

when you said it makes you "angry" and you imply that your dad is not "sane", but rather an "ultra" extremist who views science as "witchcraft", someone with whom debate is "pointless", as he won't even accept "2+2=4"...

well, i thought there just might have been a little strain.

but since everything is groovy, debate away.

4/26/2006 5:20:25 PM

haha, yeah, he's just ignorant. He'll grow up one day.

4/26/2006 6:47:30 PM