Great post.
I think the negative macroeconomic news - likely more severe in the next few months - will put a damper on the entire market, including energy.
I am a former Tech Clown who has seen the light and transformed my PF in 6-8 months from a heavily tech bias into a defensive mode. I am in cash, Yen, Swiss Fr., gold, commercial real estate ultrashort ETF (SRS), UST funds, financials ultrashort ETF (SKF), an agricultural ETF (DBA) and a couple of refiners, VLO and WNR. Structuring my PF defensively in this way has served very well so far, but it is time to think ahead of the downsloping macroeconomic curve for we know it will not last forever. In that regard, I think your message about energy has a lot of merit.
The macroeconomic downturn will not last forever and neither will oil. Over the long term, an increased demand for crude crashing headlong into Peak Oil will mean that the energy sector will do very well indeed. In that sense, the latest pronouncements by Pickens seem spot-on. I see a lot of long term opportunity in energy but also a lot of short term opportunity to pick up good stuff on the cheap.
I am therefore now looking for good O & G plays. The first one I am examining is PWE, whose distributions are terrific; they don't appear to be threatened at this time. At a time when stagflation and, dare I say it, deflation, could occur, the income flow from it looks terrific. I am a complete novice at natgas, but I suspect it may very well have even more long term potential than crude. Natgas is a very strange market segment to me so I suppose I will be doing a lot of reading about it in the near future. |
