How To Manage A Natural Resources Fund When You're Bearish On Natural Resources

Adam Feik - INO.com Contributor - Energies


I wrote a couple weeks ago about whether we're seeing the end of the oil supercycle. In my article, I heavily referenced a money management firm (WHV Investments) that has been bullish on energy investments since predicting a “supercycle” in 2000 (great call at the time!). Despite the massive turmoil since last June, WHV continues to be bullish.

An oil-bullish money manager

To get a flavor for stocks owned by a manager who is bullish on the continuation of the energy supercycle, check out this partial list of WHVIX's stock holdings. Granted, the holdings data are a few weeks old, but WHV tends to have very low turnover and says it’s sticking with its thesis. WHV management believes we’re still in the oil supercycle; accordingly, WHVIX owns stocks like these (as of 12/31/2014, source: WHV.com; this list represents selected stocks rather than a complete Top 10 list):

WHVIX Natural Resources Stock List

* “Bullish signal” refers to whether MarketClub is displaying “green triangles” for both the intermediate - and long-term outlook.

Of the above holdings, WHVIX appears to have (during 4Q 2014) increased its exposure to Suncor, which derives a large plurality of its business from “downstream” refining and marketing activities. Additionally, Suncor has significant development efforts in Canada’s Athabasca oil sands. Continue reading "How To Manage A Natural Resources Fund When You're Bearish On Natural Resources"

If the oil supercycle is dead, do you believe in resurrection? Or reincarnation?

Adam Feik - INO.com Contributor - Energies


As INO’s Energies contributor, how could I ignore Saudi Prince Alwaleed’s provocative statement that oil will “never” hit $100 “anymore”? In his interview with Maria Bartiromo for an article in Monday’s USA Today, Prince Alwaleed aptly summarized key reasons for today’s low oil prices, but (importantly) he didn’t give offer any evidence that oil would “never” again reach triple digits.

Still, many are decrying the “end of the oil supercycle.” Perhaps the supercycle is dead; or perhaps not. Either way, the world still needs energy from someplace, right? And lots of it! Which path, then, does the future hold? A resurrection of the oil supercycle? Or a reincarnation of a new energy supercycle based on resources other than oil? (Or “all of the above”?).

One prominent money management firm I’ve followed for most of my investment career, WHV Investments in San Francisco, was the first to introduce me to the term “supercycle” – referring to the coming oil- and steel-intensive “industrial revolution” that kicked into high gear in emerging countries in the early 2000s. By way of background, WHV is no “closet indexer.” Its managed portfolios, rather, reflect the firm’s conviction in top-down macroeconomic themes and trends identified by its team of analysts and managers. Continue reading "If the oil supercycle is dead, do you believe in resurrection? Or reincarnation?"