Energy stocks have had a nice lift in the last couple of days, naturally a lot of folks have come out calling for $68 or some other bigger figure than we have now.
To me that is just noise that may or may not help your portfolio in the short run. I have not reduced energy since the spring but I did do a dollar for dollar swap out of a stock into an ETF.
I continue to view energy as a big macro theme. As such there has been and should continue to be a lot of short term action in and around the big macro element. If you read this site during the decline you might recall I was not worried, I made comments like "it is no shock that I will lag when energy gets crushed." I haven't tried to game this and now that energy is doing well I see the portfolio doing a little better.
This ties into a sort of predictability that I want to embed in my portfolio. I want it to behave in the manner I expect. If you think tech, as an example only, is the right place to be and you go 20% tech you know that when tech does poorly so will your account.
This sort of predictability makes the task of participating in the market much easier.
Wikinvest Wire
5 comments:
IMO just reading your site makes participating in ther market easier. I investigate and learn more about the whole process 1000% more than I did prior to 2002. Your site is a valued part of that investigation. Thank You. Tom in Indy
cousin Tom? Is that you? Hey you still owe me that $100.
joke joke joke
Thanks Tom, that is very kind.
Beneath the surface, so to speak, are the costs of extracting energy. The majority of oil and gas companies like to continually press release their "proven reserves". However, if these reserves are expensive to bring up and out in comparison with competing company reserves, profits shrink - as well as the company's share price.
CSFB has an excellent read on this topic presented in an industry update published yesterday.
Which energy ETF did you switch into? I am curious if it was a driller ETF or an oil company etf? thanks
i wrote about the trade it was DKA
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