everybody , his auntie, and their dog, recommends buying financials and energy stocks
he makes the common mistake of assuming that the market is overweight energy. energy is only 10% SPX cap weighting, compared to 14% of earnings weighting and some much larger percentage yet of the market's incremental earnings growth rate. so market is seriously underweight energy.
instead of considering actual facts like the above, he bases his analsyis on who is on CNBC. this kind of analysis seems to be a type of magical thinking. if somebody touts energy on CNBC, then it must be overly popular, even if it is underowned by the entire market. well, i rarely watch CNBC. i mean, i have to be strapped down in a chair and drugged to watch it.
as it happens, yesterday i was strapped down in a chair and drugged (at the dentist)...and they turned CNBC on on the LCD TV which had a nice long and expensive-looking articulating boom mount so that it could be positioned for my supine viewing pleasure.
granted, i could not hear much over the drills, but i saw some people touting physical gold and gold stocks as i was getting my teeth drilled (to replace some old fillings with gold, btw), so gold must also be owned by all aunties and dogs according to the above logic.
the "everybody and his auntie" energy trade happens when energy is well north of 20% of SPX. in the meantime, energy will have periodic, violent drawdowns to flush out weak hands and ensure enduring hatred of the sector. |
