Betting On Black Gold

By Matt Briscoe

Every great once in awhile a wave of prosperity hits the state of Texas like a tsunami. It’s here for a little while and then gone before you know it. It’s known simply as an oil boom and in Texas, it simply comes and goes in waves of prosperity. The smart gamblers invest their money, knowing that the good times won’t last forever–despite what the talking heads might say. The less savvy might just spend, spend, spend leading to huge temporary microeconomic impacts. But for many, who call the Texas oil fields home, there is the stark reminder that the good times never last.

Data compiled from oil field service company Baker Hughes shows that as of November 21, 2018 the rig count in Texas was 532 rigs, that up 18.49% from this time last year, according to the report, and analyst suggest that by early next year, that could could be at near historic highs.

But what does that mean for the small, oil belt communities that dot much of the state? It just depends on how you play the hand.

Some say that this coming boom could be as big as the state has seen in sometime. Others say that it will likely fizzle pretty quickly, depending on what happens in Washington and in overseas OPEC nations. But some are already betting on this boom–and for good reason.

Some investors are already looking at hotels and motels in the usual places, while others are betting on the more personable mancamps.

Ronaldo Gonzalez, a mechanic from near Cotulla says that when he leaves for an extended period of time, he nearly always hooks his travel trailer up to his pickup and finds a campground or mancamp to stay at.

But then, there are the other service industries that pop up that are often overlooked, the ones like ATV dealers and tire repair companies.

Analysts suggest that as the potential for big profits looms not so far in the near future, companies like ATV and travel trailer shops are usually a pretty safe bet–especially in areas where they have often been overlooked.

But what about after the boom goes bust? Experts say that now is the time to plan, even before it gets started.

The smart move is that everybody should have an end game when it comes to the oil patch, simply because it never does last forever.

For those who have weathered the booms for years, they understand that the patch will leave you more destitute than you were before. But they also understand that it has the power to change your life, if you let it.

Noel Gutierrez knows from experience. Gutierrez worked in the last boom and made a ton of money. It was only after it was over did he realize that he had a ton of debt and shrinking bank account.

“I would have met with a financial planner back then and had them help manage my money better for the long term,” Gutierrez says. “I know now what to do and I am already doing it. Don’t finance anything and save for a rainy day, for sure.”

Wise words from a man who has already been down this road once. “You don’t want to find yourself broke and needing a job at the end of an oil boom in Encinal, Texas. No way,” he says.

So for whatever may come, it won’t last forever, and the wise will certainly prepare for the inevitable end that always comes when you’ve bet the farm on the volatile Texas oil boom and bust system.

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