There are still winners in the energy space, but you have to move quickly. In advance of the rebalance U.S. Global Investors CEO Frank Holmes is expecting toward the end of 2016, he and analyst Samuel Pelaez point to the sectors taking advantage of opportunities, including refiners, midstream MLPs, low-cost producers, airlines and chemical companies. In this interview with The Energy Report, they name their favorites and outline the fundamentals that will make 2016 look a lot different than the year that just ended.
You read that headline correctly. Don't look now (you might jinx it), but Chevron Corporation (NYSE:CVX), the large integrated oil major, now sports green monthly and weekly Trade Triangles on its MarketClub chart. And this with oil at $35 per barrel.
CVX has given back about 29% of its value since closing at $134.85 on June 24, 2014 (on a price-only basis). At its worst, the stock's peak-to-trough decline was nearly 47% as of this August 25th, when CVX closed at $70.02. Wednesday's closing price was a much better $93.44 – good for a cool 33% gain for anyone lucky enough to have caught the falling knife right at its recent bottom.
CVX is now down just 12.9% for 2015 year-to-date (YTD) when including dividends. On a 3-year annualized basis, CVX shares have lost 0.6% annualized, and on a 5-year basis, the number is +4.77% per year. All those performance numbers are on par with Exxon Mobil Corp. (NYSE:XOM) and other integrated oil majors. You could safely say it's been a wild ride for all of them. Continue reading "Chevron Flashes Buy"→
The Energy Report: You call yourself an "outsider," and have founded an investment club of that name. In what sense are you an outsider?
Nick Hodge: Being an outsider stems from my upbringing. Both my parents were middle to lower middle class, and I never had anything given to me. I've always had to work for what I have, starting with a lawn-service business when I was 12 and working my way through college as a butcher. I look at the "mainstream" with a skeptical eye. I'm a contrarian. I'm not on the inside of big business, big banking and politics, and don't want to be.
The Outsider Club has been around for about a year now. I founded it after writing for several newsletters over the past decade about energy and speculative investments.
TER: What does being an outsider mean with regard to your views on energy?
NH: I'll give two examples. First is my belief in the peak oil theory. Second is my early adoption of a belief in renewable technologies, such as solar and smart-grid technologies.
The Energy Report: Your book, "The Colder War," is based on the idea that world domination will come through control of the energy economy, and that Russia is winning the fight. How is Russia using the petrodollar to achieve energy supremacy?
Marin Katusa: Under the leadership of President Vladimir Putin, Russia has reestablished itself as the alternative to the American superpower. Putin has aligned himself with nations like China to work in concert against U.S. interests globally. Furthermore, a new bank formed by the BRICS countries Brazil, Russia, India, China and South Africa will attempt to assert itself as an alternative to the International Monetary Fund.
The Colder War will be a long battle, just like the first Cold War, but in the Colder War, judgment day of the petrodollar will be the critical battle. One must understand global politics and the Colder War to be a successful investor in the energy sector.