As an especially concentrated natural resources investor, the recent 30+% drop in oil prices has caused a huge hit in my paper wealth.

Fortunately, if I manage my expenses I can survive a nuclear winter in oil.

Still, it's been an especially humbling week.

Love him or hate him, Murdoch's a shrewd businessman and he has the benefit of experience.

Crashes in the oil industry are nothing new, as onetime world's richest man and petroleum pioneer J Paul Getty wrote in his 1976 biography, As I See It.

Mr. Getty

Mr. Getty

Let's turn to page 7 of the book for a little historical context and learning:

Then, every oilmen is acutely aware of the First Axiom of the petroleum industry: whatever crude prices may be today, they may be far, far different tomorrow. At present, crude is selling for what seem to be high prices…

Will the prices hold?

Another good--and for the oilman, anxiety creating question. Crude prices have often plummeted abruptly and drastically in the past, and no oil producer on the face of the earth has any guarantee that history will not repeat itself.

The record--as shown by a few random examples--speaks for itself.

In May 1903, Oklahoma crude was worth $1.03 a barrel at the wellhead. Exactly two years later, the price fell to 52 cents a barrel-- and by 1915, was down to 40 cents and even less per barrel.

World War One and its aftermaths reversed the trend. The 1920 base price for crude was up to $3.50 a barrel, with better grades commanding high premiums. Some of my own wells were then producing oil that sold for $5.25 per barrel at the wellhead.

What has gone up came down. In January 1920, the crude price nosedived to $1.75 a barrel, soon slumping further, to $1.25. After the great East Texas oil fields were opened up in the early 1930s, the flood of "new" oil was catastrophic to the price structure. Enormous quantities of crude were sold for as little as ten cents a barrel.

Any sane minded resource investor should own Getty's book. (Amazon link)