Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
FYI: Bargain hunting can be a thrill, but remember that it can also be dangerous. Brave investors are picking through energy stocks, looking to buy those pummeled by the plunging price of oil. Billions of dollars flowed into energy stock funds last month, a huge leap from the norm, enticed by prices marked down by 25 percent or more since last summer. But many mutual fund managers and other professional investors have a warning for the bargain hunters: Don’t be surprised if it takes years for the prices of energy stocks to fully recover. Regards, Ted http://www.dallasnews.com/business/personal-finance/headlines/20150119-energy-stocks-buy-low-or-get-out-of-the-way.ece
What I have done is to do an Instant Xray analysis on my portfolio to see how much energy I currently own. My findings was that I am currently overweight energy by better than two percent when compared to the S&P 500 Index so I am doing nothing at this time. However, where I have been looking for opportunity is in the minority sectors of materials, real estate, communication services, and utilites to make sure I have at least a five percent weighting in each of them. In this way when they are performing well as real estate and utilities have been of late then they have a greater influence in portfolio performance because of their increased weighting.
So don't overlook the minority sectors and by overweighting them, over time, I have found to be a good strategy. Currently, I am carrying a double weight in each of them.
What's someone's estimated upside/downside? What's their risk tolerance and time horizon? I think at this point there are a number of energy names where there's more upside than downside, although downside is certainly there. Just depends on how long your time horizon and risk tolerance is. As I've said before though, I still think you want to own the biggest and the best rather than the small speculative players.
Dittos on Old_Skeet's observation regarding real estate and utilities. They had a very good 2014 and are continuing that trend so far this year. The idea of overweighting sectors is something I also practice. It has been effective for me. Many here are overweighting healthcare for the same reason.
Only time I worry about "weighting" anything is me....in investments I tend to gravitate to winners no matter what they weight, my portfolio doesn't care, it wants big FAT WINNERS...
You should write a book. You seem to alway achieve gains in the markets no matter the circumstances. You could name the book "Making Fat Winners in The Stock Market. "
I wonder how you would have fared from 1966 to 1982?
I'm 30% in Healthcare(as reported here many times), how am I doing in that weight? Overweight? Should I worry?, should I change? Because some "Person" says Weighting in investing is important, Sorry, you don't need a book....
Tough call. Had a poster here a month ago recommending oil at $58 as a sure-fire bet. Come to research past posts, and he'd been buying at around $90 a month or so earlier (but said he had "shorted out" of that position as WTI continued falling.) Today, it's closer to $48.
Deflation is the biggest wild card here and my crystal ball on that subject is badly shattered.
Based on past cycles ... oil will recover nicely at some future time (measured in years rather than decades). ---
Caught T. Boone Pickens on CNBC this week. He's thinking oil will drop to the low-mid $40s in coming months - but than rebound to $65-$70 by year's end as the effects of domestic curtailment in production take effect and remain around that level. Recommended waiting a bit longer to buy. I've also commented before that it won't hit $40 - and am sticking with that bet. Even at lower prices, major suppliers, like Shell and Exxon, may prosper - as the stuff still needs to be moved, stored, and sold at retail. Unlike the well-head cost, those costs are relatively fixed. ---
I'm overweight this sector and so wrestle with the things that could go wrong. Among the unknowns and worrisome possibilities: -Continued global price deflation -Global warming (and a shift away from fossil fuels) -Fracking (more of it and at lower cost) -Alternative energy sources becoming more cost competitive ** -New technology to extract more energy from a gallon of fuel -Less reliance on traditional forms of transit as drones and automated/driverless vehicles expand.(Driverless vehicles would consume less fuel for a number of reasons - especially if carrying no passengers)) -Use of lighter-weight industrial materials reducing the amount of energy used to transport them.
**Alternatives: solar, wind, hydro (especially tidal energy), geo-thermal, hydrogen (which can be extracted from water, but at great expense) and advances in nuclear which will reduce or eliminate the hazards commonly associated with it.
Comments
So don't overlook the minority sectors and by overweighting them, over time, I have found to be a good strategy. Currently, I am carrying a double weight in each of them.
I wish all ... "Good Investing."
Old_Skeet
my portfolio doesn't care, it wants big FAT WINNERS...
You should write a book. You seem to alway achieve gains in the markets no matter the circumstances. You could name the book "Making Fat Winners in The Stock Market. "
I wonder how you would have fared from 1966 to 1982?
Sorry, you don't need a book....
Come to research past posts, and he'd been buying at around $90 a month or so earlier (but said he had "shorted out" of that position as WTI continued falling.) Today, it's closer to $48.
Deflation is the biggest wild card here and my crystal ball on that subject is badly shattered.
Based on past cycles ... oil will recover nicely at some future time (measured in years rather than decades).
---
Caught T. Boone Pickens on CNBC this week. He's thinking oil will drop to the low-mid $40s in coming months - but than rebound to $65-$70 by year's end as the effects of domestic curtailment in production take effect and remain around that level. Recommended waiting a bit longer to buy. I've also commented before that it won't hit $40 - and am sticking with that bet. Even at lower prices, major suppliers, like Shell and Exxon, may prosper - as the stuff still needs to be moved, stored, and sold at retail. Unlike the well-head cost, those costs are relatively fixed.
---
I'm overweight this sector and so wrestle with the things that could go wrong. Among the unknowns and worrisome possibilities:
-Continued global price deflation
-Global warming (and a shift away from fossil fuels)
-Fracking (more of it and at lower cost)
-Alternative energy sources becoming more cost competitive **
-New technology to extract more energy from a gallon of fuel
-Less reliance on traditional forms of transit as drones and automated/driverless vehicles expand.(Driverless vehicles would consume less fuel for a number of reasons - especially if carrying no passengers))
-Use of lighter-weight industrial materials reducing the amount of energy used to transport them.
**Alternatives: solar, wind, hydro (especially tidal energy), geo-thermal, hydrogen (which can be extracted from water, but at great expense) and advances in nuclear which will reduce or eliminate the hazards commonly associated with it.
Oil is a necessity....can not live without
Regards,
Ted
Is It Time to Invest in Energy Stocks?
https://www.google.com/search?newwindow=1&site=&source=hp&q=Is+It+Time+to+Invest+in+Energy+Stocks?+wsj&oq=Is+It+Time+to+Invest+in+Energy+Stocks?+wsj&gs_l=hp.3...6814.12229.0.12710.5.5.0.0.0.0.73.340.5.5.0.msedr...0...1c.1.61.hp..2.3.205.FgXH4E9HiBY
Re: "Oil is a necessity...can not live without."
Now - go shove another 8-track into your boom-box there at the beach.
(Did someone say "sarcasm"?)