Corporateraiders are economic assassins. They strike fear into
the hearts of company executives. And T. Boone Pickens has been
one of the best.
The oilman turned corporateraider was one of the pioneers of
the leveragedbuyout craze of the 1980s, producing hugegains for
his investors while becoming one of the richest people in America
with anet worth of $1.4 billion. As a legendary oilman, investor
and corporate raider, Pickens has a knack for two things: knowing
when to strike and when to play big.
T. Boone Pickens' Biography
Pickens showcased his lethal business smarts at an early age. At
age 12, he expanded his paper route from 28 to 156 papers. In
1956, after graduating with a degree in geology from Oklahoma
A&M and working for Phillips Petroleum for three years,
Pickens founded the company that would eventually become Mesa
By the early 1980s, Mesa had grown into one of the largest
independent gas and oil companies in the world, transforming
Pickens into a business celebrity and an extremelywealthy man.
But unsatisfied to rest on his laurels, the booming days of
leveraged buyouts in the 1980s saw Pickens make some of the most
targeted and leveragedinvestments of his life.
T. Boone Pickens'Investment Strategy And Big Wins
In the early 1980s, Pickens correctly predicted that the United
States was in the early stages of a booming economic cycle that
would drive demand for energy resources. Recognizing the
magnitude of the opportunity and trend, he set about to grow his
company aggressively. His favored strategy was the leveraged
buyout, wherein one company buys another with littlecash andlots
||Pickens has a knack for two things: knowing when to
strike and when to play big.
This a high-risk investment that has the ability to produce
huge gains in abull market and huge losses in abear . Either way,
the core of Pickens' investment philosophy was on display:
knowing when to strike and when to play big.
Pickens earned his corporate raider moniker as a pioneer in
the leveraged buyout boom of the 1980s, executing a number of
high-profile deals that pushed the limits of scale andleverage .
In 1981, Pickens led Mesa'stakeover of Hugoton Production, which
at the time was 30 times larger than Mesa. Pickens and Mesa
followed that up with attemptedtakeovers of Cities Service, Gulf
Oil, Phillips Petroleum and Unocal. Pickens later successfully
executed theacquisition of Pioneer Petroleum and the midcontinent
assets of Tenneco. These leveraged acquisitions enabled Pickens
and his investors to score huge gains in thebullish energymarket
in the 1980s.
T. Boone Pickens' Portfolio: What's He Holding Now?
Pickens had the right amount of insight and experience to
identify the coming oil boom in the 1980s and knew when to play
big. But if you missed out on Pickens' big play in energy the
first time around, don't worry -- he's up to his old tricks.
Pickens is once again making big investments in energy. But
he's no longer betting on crude. He's been vocal about his take
on peak oil, claiming that world oil production is entering a
period of production decline. That's why Pickens is leading the
charge in natural gas.
Pickens has been a pioneer in the natural gas market. In 1997
he formed Pickens Fuel Corp. and began touting natural gas as the
best alternative to gasoline because of its domestic abundance
and lower cost and toxicity. The company changed its name to
Clean Energy Fuels Corp. in 2001 and now owns and operates
natural gas fueling stations from British Columbia to the
U.S.-Mexico border. Pickens'capital management firm BP Capital is
also making big bets on natural gas companies, with each of his
$100 millionfund 's top 10 holdings in energy and natural
Pickens has also dabbled in wind, but with much less success
than his fossil-fuel efforts. In October 2012, Pickens sold his
stake in a huge wind-farm development proposal, suffering a $150
million loss. This experience reinforced his belief that natural
gas is the energy source of the future, saying: "I've lost my
(rear end) in wind power. Oil and gas are where the jobs are
What's he holding now?
Action to Take -->
There are few people in the world with as much insight into the
global energy markets as T. Boone Pickens. The oilman turned
corporate raider cashed in on the bullish trend in oil during the
1980s, producing big gains for investors and becoming a
billionaire in the process. But now, 25 years later, Pickens sees
another big opportunity for investors to cash in on a bullish
trend -- this time in natural gas.
And there are plenty of great ways to cash in.
United States Natural Gas (
is anETF (exchange-traded fund) that provides investors with
exposure to natural gas prices.
EOG Resources (
is a domestic leader in the booming natural gas industry, making
big investments in the Bakken and Barnett shale formations, two
of the biggest shale plays in the country.
Carbo Ceramics (
is a pick-and-shovel play in the natural gas space, specializing
in selling consumable materials used in the extraction process of
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