David Rubenstein of the Carlyle Group says he would not wait for oil to bottom, but would buy it now that it has declined 54% since late June.
Oil went into free fall in the latter half of last year, but stabilized somewhat this February. However, Rubenstein told CNBC’s Squawk Box that he wouldn’t wait for the commodity to dip again, but would buy it now, “The great fortunes are made when the prices are low. They are not made when they are close to the top and you think they will go higher.” Carlyle tends to invest for the long-term and holds many investments for as much as 7 years. An increase in supply due to domestic drilling is one factor causing oil prices to be very low.
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“We have a lot of oil and gas that is relatively cheap compared to its replacement value, ” Rubenstein told CNBC. “As the result of that, I think it will be one of the great areas to invest in the next 5 or 10 years, as it has been for many years.”
While alternative fuels are a virtuous investment, Rubenstein doesn’t think the money is there. He told CNBC, “I think renewable energy is a great thing, and we might get to Heaven quicker by investing in it, but it’s not clear you’ll make money in it.”