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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (55852)	8/14/2015 12:19:01 PM
From: Graham Osborn	1 Recommendation Recommended By E_K_S Read Replies (1) \| Respond to of 78673

The E&Ps are basically premium free commodity derivatives in this price range IMO. You have to enjoy commodities and being willing to engage in macro speculation, which most don't. The flip side of that is Dalio got started in the 70s when there was little money to be made (long side at least) on stocks and much in commodities. Also recall that excerpt from Super Stocks that oil was one of the few investments that paid off. The amount of pain experienced in the oil sector at this point by many if not most (including me at times) is an indication of how few are willing to invest in these stocks now. In 5 years, who knows, maybe that will be equities in general :) Even the banks are getting flamed for their energy loans now. When I read that article in the fate of Carlyle's Vermillion fund I was reminded there is only so far (and it's not far) contrarian investing can go with institutional money. Once the hedge funds and institutions have vomited their last shares, the bottom will be reached. As I've said, Brent sub $45 seems fundamentally wrong to me long term, since only the Saudis can produce below $45 and hence, they have no incentive to do so.

To: Paul Senior who wrote (55852)	8/14/2015 5:16:58 PM
From: Coolwire	Read Replies (1) \| Respond to of 78673

One point about energy use in economies around the world. They are becoming more and more efficient with regard to the required energy inputs. This from the Economist in 2011: THE energy required to produce a unit of GDP is falling in most countries around the world. As countries industrialise, energy-intensive businesses make up a bigger share of the economy. Peaks generally correlate to the high point of heavy industry, before lighter industry and higher value-added businesses (such as services) begin to replace old-fashioned smokestack manufacturers.