Let's keep in mind that energy is under weighted by both institutions and the general public. The brokers, venture capitalists and investment bankers, having bilked the public out of billions in the Internet bubble, are going to find people less than enthusiastic about tech for some time. If the NAZ gets down to 1800 or below, perhaps a very long time.
I suspect investment bankers, green mailers, VCs, M&A people, and other unsavory types (VBG), may now be drawn to the energy sector with the mantra that it is really energy that powers the new economy. For long term investors who choose not to try to time the intermediate swings, it will be the entry of these types that will both trigger the largest gains as well as be the key signal that it is time to look for the exits.
If the recession is deep, the we certainly should expect a nasty correction in energy along the way. With oil supplies concentrated in just two major swing producers, part of that risk is eliminated, but not all of it. The really dumb money has yet to enter this sector. if it does, valuations will go well above fair value. |
