Peak Oil Theory Springs a Leak - Is “Peak Alpha” Theory Far Behind?
Nov 23rd, 2006 | Filed under: CAPM / Alpha TheoryPeak Oil theorists have recently predicted that the world was once again running out of gas. But it appears from new research that you can keep that SUV on your 2040 holiday gift list after all. This report from Cambridge Energy Research Associates (via The Kirk Report) says that evolving technologies will facilitate cheaper extraction of unconventional reserves.
Says CERA’s November 14th press release:
This is the fifth time that the world is said to be running out of oil, says CERA Chairman Daniel Yergin. Each time — whether it was the ‘gasoline famine’ at the end of WWI or the ‘permanent shortage’ of the 1970s — technology and the opening of new frontier areas has banished the specter of decline. There’s no reason to think that technology is finished this time.
“Peak Alpha Theorists” would have us believe the world is running out of alpha. However, like oil, new market inefficiencies (i.e. alpha opportunities) will continued to be discovered as long as markets evolve. And, while alpha may look like it’s drying up sometimes, “there’s no reason to think that technology is finished this time.”
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