OPEC just made history again.
Two weeks ago, the Organization of the Petroleum Exporting Countries (OPEC), a cartel that supplies 40% of the world’s oil, agreed to cut production for the first time in eight years.
OPEC made the deal because the world simply has too much oil.
You see, after topping at $106 two years ago, the price of oil went on to fall more than 75%.
Oil companies are supposed to pump less oil when prices crash like this. But that didn’t happen.
You can see in the chart below that OPEC has actually ramped up production since 2014. It’s now pumping a record amount of oil.
In a way, it made sense for OPEC to do this. After all, crude oil is the cornerstone of every OPEC nation’s economy. It makes up 73% of Iran’s exports…76% of Saudi Arabia’s…and 99% of Iraq’s.
If these countries produce less oil, their economies could slow…even unravel. But at this point, OPEC is doing more harm than good by flooding the market with oil. It’s why they agreed to cut production two weeks ago.
• OPEC struck another deal over the weekend…
Bloomberg reported on Saturday:
Russia and several other non-OPEC nations pledged to curb oil production next year by more than 600,000 barrels a day at a meeting in Vienna on Saturday, joining forces with the Organization of Petroleum Exporting Countries to end a global glut, a delegate familiar with the situation said.
This is the first time in 15 years that OPEC and non-OPEC countries have both agreed to cut production. The deal includes 25 total countries.
According to Bloomberg, the deal could bring balance back to the oil market within months:
If OPEC and non-OPEC countries stick to their promises, the oil market could turn into a deficit by the second half of the year.
• Today, oil surged 3.4% on the news…
It’s now trading north of $54, for the first time since July 2015.
For the first time in two years, the oil market looks stable. A lot of investors are probably now wondering if it’s time to get back into oil stocks. After all, many companies that couldn’t make money at $30 or $40 oil are suddenly profitable again.
But you have to realize something important: OPEC doesn’t always do what it says it’s going to do. It wouldn’t surprise us if one or two major oil-producing countries backed out of this deal.
This would likely cause the price of oil to fall. Weaker companies could struggle to make money again. As for stronger oil companies, many of their shares have already skyrocketed.
• The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) is up 45% this year…
XOP tracks 60 major U.S. oil producers. The fund is up so much this year because the market “priced in” higher oil prices months ago.
In many ways, the big money has already been made. Some Casey readers are already sitting on huge gains.
• Crisis Investing editor Nick Giambruno recommended a world-class oil company in March…
It was a bold investment, to say the least.
Just six weeks earlier, the price of oil hit a 12-year low. Most oil companies were bleeding cash at the time. Some didn’t survive the downturn.
In other words, the oil market was a bloodbath. Most investors wanted nothing to do with it.
But Nick saw an opportunity. According to Nick, a genuine crisis will often give you opportunities to buy world-class businesses for dirt-cheap. Occasionally, you’ll get the chance to buy a dollar’s worth of assets for pennies.
• When Nick told his readers to buy the stock, it was trading 35% below its 2014 high…
Nine months later, his readers are sitting on a 43% gain.
More importantly, they own shares of a world-class business that could hand them triple-digit returns if oil keeps rising.
That said, Nick doesn’t think new investors should buy this stock at current prices.
But there’s good news: Nick always has more than one crisis investing opportunity on his radar…
• Nick has been stalking one of the world’s most distressed markets for months…
Regular readers know we’re talking about uranium, a metal used to fuel nuclear power plants.
Between 2000 and 2007, the price of uranium rose roughly 15-fold. But like many bull markets in the resource sector, this one crashed violently.
You can see in the chart below that the price of uranium has plunged 85% over the past nine years.
• Nick says it’s hard to think of a more hated market right now than uranium…
He sees this situation ending one of two ways:
1. Uranium prices don’t go up. Miners have no incentive to produce. Nuclear power plants run out of uranium, and the lights go out for billions of people.
2. Uranium prices go up and incentivize enough production to meet the demand.
Nick is betting on the second outcome…
• Last month, Nick told his readers to buy one of the world’s top uranium companies…
Now, we can’t tell you the name of this company. That would be unfair to Nick’s subscribers. But we can tell you why Nick is so bullish on it:
I have no doubt the company will survive this downturn and deliver huge profits to investors in the coming uranium bull.
It has the upside of a junior exploration company—think 10-bagger or better. But it’s very low risk. This is the kind of trade we look for in crisis markets, with the risk/reward skewed in our favor.
• Nick’s top uranium stock is up 14% since he recommended it three weeks ago…
But this could be just the beginning. During the last uranium bull market, this stock surged 3,600%.
You can get in on this investment today by signing up for Crisis Investing. Before you do, we encourage you to watch this video. It talks about one of the biggest crises that Nick’s watching right now.
As you’ll see, this potential crisis could put millions of Americans out of work. It could send tens of thousands of U.S. businesses into bankruptcy. It could even trigger a massive stock market crash.
The good news is that you don’t have to be a victim. By taking the right steps today, you can “flip” this crisis into an opportunity to make big gains. To see how, watch this eye-opening presentation.
Delray Beach, Florida
December 12, 2016
Is AI an Existential Threat to Mankind?
Editor’s Note: Today, instead of our usual Chart of the Day, we’re sharing a special essay from Chris Wood, editor of Extraordinary Technology. As you may know, Chris is our in-house tech expert. His specialty is finding small tech stocks with huge upside.
This year, Chris has had huge success with his approach. In April, he told his readers to buy a groundbreaking tech company. That stock is already up 31%. Another stock in Chris’ portfolio, a cybersecurity firm, has surged 32% since May. He also recommended a revolutionary biotech company that’s up 68% since November 4.
A few days ago, Chris told his readers about another tech company with huge potential. This company is one of the leaders in the booming artificial intelligence (AI) industry.
Many brilliant people think the technology could radically change our world for the better. Other serious thinkers are worried it could destroy the human race.
In the essay below, Chris tackles this issue. We hope you find this essay as insightful as we did.
By Chris Wood, editor, Extraordinary Technology
That’s what it’s been called by some really smart people.
When Bill Gates, Elon Musk, and Stephen Hawking share a concern, we should at least pay attention. After all, these three icons didn’t get where they are by worrying about the frivolous and irrelevant. The billionaire software engineer, the inventor/entrepreneur, and the cosmologist are all serious thinkers. So what future threat do they all worry about? Technological singularity.
Technological singularity is a theory about AI and where it will take the human race. According to the theory:
• AI-driven computers, which are currently confined to accomplishing specific problem-solving or reasoning tasks, will continue to improve. Eventually, they will possess the full range of human cognitive skills.
• With those skills and the ability to “think” faster than their human creators, these machines will, at some point in time, surpass human intellect. That point in time will be without precedent, without equal, and beyond which there will be no return. It will be singular. Hence the term “singularity.”
• From there, these machines will rewrite their own software to become even more intelligent. After all, why wait on a slower and less intelligent human to do that task? And perhaps they will even design new, more intelligent machines to replace themselves.
If all this happens, how will these super-intelligent machines relate to us mere humans? Nobody knows. But in his much-acclaimed 2011 Time magazine article about the singularity, journalist Lev Grossman ventured a guess. He wrote:
“It’s impossible to predict the behavior of these smarter-than-human intelligences with which (with whom?) we might one day share the planet… Maybe we’ll merge with them to become super-intelligent cyborgs… Maybe [they] will help us treat the effects of old age and prolong our life spans indefinitely. Maybe we’ll scan our consciousnesses into computers and live inside them as software, forever, virtually.”
None of that sounds so bad. But then Gross added this little zinger: “Maybe the computers will turn on humanity and annihilate us.”
Perhaps they would do this for sport or as a means toward some other goal… like eradicating cancer. No humans, no cancer.
Which brings us back to Gates, Musk, and Hawking. Each has expressed concern about potentially dire consequences of AI gone wild. Gates has been the most restrained of the three, simply saying, “I am in the camp that is concerned about super intelligence… I don’t understand why some people are not concerned.”
Hawking is more emphatic. Though he believes achieving super AI would be the “biggest event in human history,” he also believes it “might be the last.” He says, “Whereas the short-term impact of AI depends on who controls it, the long-term impact depends on whether it can be controlled at all.”
Meanwhile, Musk calls super AI “our greatest existential threat” and compares AI development to “summoning the demon.”
But not everyone is buying into the singularity theory. In fact, most full-time AI researchers are not, according to Joel Achenbach of The Washington Post.
And the director of MIT’s Computer Science and Artificial Intelligence Laboratory says she isn’t worried about the singularity. “The progress [with AI] has not been as steady as people say,” says Daniela Rus, “and the machine skills are really far from being ready to match our skills.”
Miguel Nicolelis, a top neuroscientist at Duke University, describes the singularity as “a bunch of hot air.”
“The brain is not computable and no engineering can reproduce it,” says Nicolelis. “How in heavens do you simulate something you have no algorithm for? Our brain is ‘copyright’ protected by its own evolutionary history!”
With so many big brains on both sides of the fence, we can’t offer anything new to the conversation. But whatever the final result will be can’t be stopped at this point. The wheels have been in motion for too long and they’re moving too fast. So our plan is to sit back and enjoy the ride… making smart AI investments along the way.
Editor’s Note: Chris just recommended a top AI company. In less than two weeks, his readers are up 5%.
You can learn all about this stock by signing up for Extraordinary Technology. But we encourage you to watch this brand-new presentation first.
It reveals one of the biggest opportunities in tech today. Leading technology companies like Facebook, Google, Microsoft, and Intel have already invested billions of dollars in this emerging technology. Wall Street is pouring money into the space, too. But Chris says individual investors stand to make the most. To see why, check out this new video.