ly 2, 2012, 2:10 P.M. ET Vanguard’s Barrow ‘Nervous’ On Oil, Bullish On Seadrill
By Brendan Conway Jim Barrow, manager of the Vanguard Windsor II Fund ( VWNFX, VWNAX), tells the Independent Adviser For Vanguard Investors that he remains underweight energy stocks and, in his words “nervous” about commodities “as a generalization” and “certainly” about crude oil.
One reason: He’s unenthused about emerging markets. “I never held to the idea that the BRICs were going to take care of everything,” Barrow tells the Independent Adviser, in its July newsletter. I don’t see much going on in Brazil, and I certainly don’t see much going on in India. China continues to grow, but at a much slower rate. That is reflected in what is going on in commodities.”
The comments also come with a dose of single-stock bullishness:
One energy stock in [Vanguard Selected Value ( VASVX)] we like a lot is Seadrill [ SDRL]. It’s not a household name, but is the dominant factor in high-quality, high-tech drill ships. They are all new gorillas. The oil companies, after the Macondo incident, are very careful about making sure the equipment is up to date. Seadrill has the newest fleet in the world. Their boats rent for more than other people’s do. It is a great company run by Norwegians who know exactly what they are doing. If you have to drill in difficult environments or very deep waters, they have boats that drill in 10,000 feet of water, they have their own blowout protectors and train their own crews.
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