gfs_1999,
I found your comments interesting, in particular:
Looking at some economic points I see that some countries grew to fast and now they need to expand some sectors to continue its expansion. Look now Brazil, 5 years growing inflation problens solved, people buying all goods
but now like California, Brazil needs to stop due Energy problens.
Sectors that provides services and equipment to energy, industrial and governmental customers will work during this bear market. IMO FED is giving now the tools. How long it will last is the question.
Your comments address a pet theory of mine that relates to energy and the markets. As in the past an increase in energy prices has put the brakes on a bull market. I am looking at the situation beyond the energy cost effect on the economy and more to sustainability of a bull market where there is not enough energy infrastructure to maintain
the economic pace. While shortages of natural gas and heating oils were short lived last winter, they were significant indicators that capacity extrapolated into the future of a bull market, were that bull to extend for some years into the future, was insufficient. With natural gas for instance, despite significant increases in drilling, actual production has indicated diminishing returns compared to the effort. One has to look further out and through short term inventory figures which are effected by things like moderate temperatures this spring in many consuming areas of US.
A development which seems to give credence to this assessment with NG is the fact that plans are being made for new LNG terminals in the US, currently I believe we only have two. Mid East has a lot of gas, more than they can transport, the LNG terminals would perhaps address that.
All of which seems to indicate that the economy must pause for a time while the energy infrastructure catches up with it. Not talking energy shortage here as much as the ability to get that energy where it needs to be. However, were energy demand to continue to ratchet up one only has to add demand from emerging economies to the equation to come up with an energy shortage in the future.
Conventional energy sources, carbon based, must fill demand while alternate energy sources are expanded and improved.
Therefore, while I have also sold most of my energy holdings, I still maintain a sizable position in some stocks in Sectors that provides services and equipment to energy, industrial and governmental customers will work during this bear market.
It seems from reading the threads that there is a high consensus that energy has had its run and it is time to shift into other sectors. I am becoming increasingly suspicious that this cycle in energy will not end like the others before it.
Guess I'm saying it could be different this time, ggg.
BTW, I'd be interested in any details you might have on Brazils energy situation.
Best Regards,
Roebear |
