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Where to invest in Oil ... after it bottoms, of course
COP. Just initiated. Plan to add in tiny baby steps. Just when we think oil is at bottom, boom--- surprise! What I've seen from the company in terms of becoming profitable again is encouraging. But ANY company would put together such stuff for wide consumption. M* posts an Analyst rating of 4.3 out of 5. "MarketWatch" (Jim Cramer's thing?) shows a BARELY bullish buy-signal. (Analyst ratings along a scale on the page, there.) See "Flashratings," also: https://www.flashratings.com/stocks/3529-COP?in=true
Such sarcasm. I'm taking my Analysts and going home! I wanted something in the beaten-down oil sector. This is the BIGGEST one in the world. They are slimming down, backing away from deepwater holes, cutting expenses, focusing.... In the end, you pays yer quarter, you takes yer chances. Even if I were to lose everything I've already got in COP, it's not even a drop in the bucket, yet... On the other hand, my electric utility choice is going gangbusters: PNM Resources. Ticker: PNM. Franklin, TRP and Vanguard are among mutual fund holders of PNM. The company has had some significant legal and regulatory victories of late.
@ Chinfist - IF you are primarily interested in just the major producers and have an account at Fidelity I'd suggest looking at FENY. It trades for free.
Personally I think that there's still some more downside and tax-loss selling in the works and I am content to wait for the beginning of a rebound before buying any of them again.
On a side note I can't for the life of me figure out how Valero and Tesoro escaped the carnage in this sector.
Mark, thanks for your advice. I don't have have a Fidelity account. I would still prefer a mutual fund rather than an ETF. The fund I have been considering is VGENX, but the main fund manager is going to retire. I will have to research what other mutual funds are out there. I agree that there will probably be more downside, so I will wait a little.
This list is from M* for the energy sector for mutual funds. There are duplicates of funds on this list, due to various classes of the same fund. Click on the "YTD" or other columns to sort returns by best or worst.
Agree with @Mark, FENY is what we have also been watching (have an acct with Fidelity). This etf contains many of the big players, has an ER of .12 and a decent yield.
This list is from M* for the energy sector for mutual funds. There are duplicates of funds on this list, due to various classes of the same fund. Click on the "YTD" or other columns to sort returns by best or worst.
Regards, Catch
Thanks Catch. That is definitely helpful. I think I will look into the Fidelity and Blackrock funds (which I think I can get load waved).
Sorry, but if we can predict when it bottoms, it's going to matter less WHERE you invest. I'm really hoping Gold, Emerging Markets and Oil all bottom at the same time and US Global Investors has still not gone bankrupt and I can buy LEAPs for pennies on GROW. All before anyone notices of course. That's WHERE. That would be fun and especially if ALL of the above happens.
@Chinfirst As to a "sub-sector" relative to energy, my first thoughts would/or will take me towards the large cap providers as with FSENX. My second thought would be a possible follow through with FSESX, as this fund is directed more towards the servicing sector provided to the producers. I'm not saying there is a clear investing path for traditional energy, but that I would expect that perhaps a recovery in the large cap company areas would be followed by a positive move from the service providers. I am less concerned with where the global exposure might be..........as not unlike McDonald's, one is getting both domestic and international exposure to earnings from such a company; and likely the same for many large producers.
This internal Fidelity page is set to "composition" of FSENX. As you scroll down the page you will see that most of this fund is domestic, but we know that earnings from these companies also come from non-U.S. based operations. NOTE: you may use many functions on this Fido page without having an account/login. Example: at the search box to the top right of the page, one may insert a ticker and obtain the same "composition" info, if Fido has that particular fund info for use. You may also click onto any of the other tabs on either side of the highlighted composition tab for other information. I happen to like the visual layout of this type of page for a quick and dirty look at a fund, etf or stock ticker. Obviously, a more complete view would be from the fund vendor.
I have not taken any time yet to try a breakdown between domestic and international energy companies.
Only my view/opinion at this time. I have looked and almost hopped into this area over the past 6 months. @hank noted above about "what bottom"......but there will be a bottom price in energy and perhaps a sustained move upward being reflected in positive pricing. Tis a tough call; no doubt. And, of course; we are mostly discussing traditional crude oil stuff here; but natural gas is another wild card for pricing and impact against crude uses. NG is also watched here for a pricing entry point as an investment area. We still live in strange investing times........... Various sectors (including energy) are going to continue to have erratic recovery periods, IMHO and there may not be much from the past to offer a guidepost. Hope to have been of some help for the brain cells. Regards, Catch
This is a reprise of a comment that I made recently in another post, but it sort of slipped into oblivion. I posted this over in the "Where to invest in Oil ... after it bottoms, of course" thread also, to try to get as many opinions as possible.
I'm really curious- do any of you folks have any thoughts on this?
What I can't compute is the nature of the endgame. OK, our best-buddies the Saudi's can shut down our shale and marginally more-expensive production. Then what? They can jack up the price again but not all that far- our reserves aren't going anywhere- if they increase the barrel price a bit too much, we're back on line again. It seems to me that from an anti-OPEC cartel situation we are in a very good position: no need to even actually pump, just maintain the threat.
Some things are not adding up here, at least to me.
Great question by OJ. Just too many unknowns. To answer it requires answers to at least some of these basic questions:
1. Are commodities (including energy) a leading indicator of something bad coming down the road that will eventually infect all major risk assets including stocks?
2. How will the geopolitics among global producers finally play out? (This one seems to be the thrust of OJ's question.) Umm ... what would the proposed "carpet bombing" of certain areas in producing nations do to world oil supply? We're already blowing up tankers in the region without much effect on global oil prices.
3. How serious are the industrialized nations about curbing CO2 emissions?
4. How rapidly will alternative energy sources come on-stream? One example is the hydrogen fuel cell. In theory, cars could run on water.
5. How many more warm winters will the U.S. (and much of the industrialized world) experience over the coming decade?
Just a few questions few of us can get our heads around today. Yet 25 years from now the answer to OJ's question will seem perfectly obvious and we'll wonder how we missed it.
Just as an add-on regarding technology. Of course fracking has been a huge game changer. The "sky is falling" (looming oil shortage) prophets of the 70s and 80s appear to have missed that innovation.
Now, think about driverless delivery vehicles. They'll drive more efficiently saving fuel. And the weight of the driver is gone. Average guy or gal weighs-in at what? 100-200 lbs? Magnify that number times thousands and you're talking about a lot of tonnage not being transported daily. Toss-out the vehicle's energy consuming air conditioner too. Won't need it.
Part of the recently passed "budget" from the house and likely to be passed by the senate too, is to allow oil exports, as well as expansion/extension of credits for solar/wind/etc.
Mr. Putin recently noted that production will not be reduced, if I recall properly. Looking at the list of major producers, I don't see any that are willing to reduce production; as they need the cash flow, eh?
The continuing end game outcome for crude production will remain to revolve around technology, IMHO; versus actual demand for crude based products. Will these demands or changes with a major impact arrive before you and I leave this 3rd rock from the sun? I doubt this will happen. But, changes are happening at a very fast rate.
You and I, with backgrounds in technology fully understand the impacts in this area. A 4 year old somewhere today, playing with a smart phone or an Ipad will discover and bring forth ideas the Googles and Facebooks have not yet thought about, eh?
But, cash flow is the name of the game at this point in time. I don't see the major producer countries having many choices right now.
I sure as heck want to get directly into the energy area; but perhaps it will not be an oil play, but another form of energy production, many of which are already in play.
I may have run around the block with this; and not really said much.......or nothing new.
Will Goldman Be Right After All? Oil Price FREE WEEKLY REPORT 18/12/2015 Some corners of the energy world dismissed Goldman Sachs’ prediction earlier this year that crude oil prices might fall below $30 per barrel. But no longer. The investment bank reiterated http://www.houstonchronicle.com/business/article/Goldman-says-only-20-oil-can-guarantee-market-6706218.php?t=90ec76519e438d9cbb&cmpid=twitter-premiumits belief that oil prices may need to fall to $20 per barrel in order to force a significant volume of supply off the market, and such a scenario is no longer seen as a remote possibility. U.S. oil production has only declined moderately thus far, down about 300,000-500,000 barrels per day since peaking at 9.6 million barrels per day (mb/d) in April 2015. But with so many drillers barely hanging on, everyone is still pumping as much oil as possible in order to keep the lights on, delaying the inevitable adjustment in supply. “This rebalancing is far from achieved,” Goldman concluded this week. For now, the world is still producing somewhere around 1.5 mb/d more than it needs. Capital markets have shunned some of the most indebted drillers, but access to finance remains open for investment-grade oil drillers. In this context, unless oil prices drop another $10 to $15 per barrel, Goldman says, the necessary contraction may not take place quick enough. http://oilprice.com/newsletters/free/opintel18122015
KENNYPOLCARI 8:21 AM 12/18/15 And the Headlines Say it All! “Europe continues to struggle, China is slowing, Hi Yield is imploding, Oil is crashing, earnings are being cut, housing is still under pressure, job growth is suspect, manufacturing suggests that we are (already) in a recession, and this bull mkt is long in the tooth…… ” The fear now is that IF oil does NOT hold at the 2008 lows of $32.40, then you should move away from the fan….because when it hits it won’t be pretty and the start of 2016 will be one for the record books……maybe our friends at GS are right……Could we really see oil at $20/barrel?…….. I mean look - all of the major oil producers (think Saudi’s and the OPEC nations) continue to produce like there is no tomorrow - refusing to 'give in’……..as they try and slaughter the competition (think Russia, US and Non OPEC producers) …..If that is the case then we could all be in for some very rough time in the first half of 2016. How about that JUNK? Since 2007, the percentage of corporate bonds that Standard and Poors has rated 'junk’ (or more politically correct - Hi-Yield/Speculative) , has climbed from 40% to 50%. We can thank the FED for this - mostly because they encouraged companies to borrow massive amounts of money at near zero rates to 'kick start’ the economy….. and naturally, much of this borrowing came from the energy, metals and mining sectors - which are now in distress. (Fun Fact: The country is now looking at about $180 billion of total 'distressed debt’* - the highest level since the end of the Great Recession). [*Distressed debt is the debt of companies that have filed for bankruptcy or have a significant chance of filing for bankruptcy in the very near future.] And so - sports fans……that IS a problem - because Standard and Poors says that: “a whopping 72% of the bonds in the metals; mining and steel industry is now distressed. That makes sense given the fact that prices for raw materials like copper, iron ore, aluminum and platinum have recently plummeted to crisis levels. It’s so bad that a key Bloomberg index of commodity prices is now sitting at its lowest level since 1999.” Notice that they did not estimate what percentage of distressed debt is in the energy space….. and if oil prices stay depressed for much longer, more energy companies could default which will cause those mkts to 'sieze up’ - forcing asset managers to sell what they can…..(and here is where you have to think stocks…..because why? Because stocks are the most liquid, easily saleable, transparent asset class there is….Need to raise money - hit the sell button and BOOM - you are done) . http://kennypolcari.tumblr.com/post/135441517380/and-the-headlines-say-it-all-try-the-simple
OK, so if that happens, then OPEC will again own the market. The only problem is that their income won't be anywhere close to what they need to maintain their living standards. "Production cost" is one thing; required national income is quite another. Saudi Arabia, for example, needs oil at around $100 to satisfy their income needs, from what I've read, and at the moment they are drawing down their financial reserves to supply the income difference.
The house of Saud may be many things, but stupid with respect to the world oil market probably isn't one of them. So where does that leave them?
It seems highly possible to me that there's something else going on here, that we're just not seeing yet. I wouldn't be too surprised if the threat of a major production increase from Iran is a factor in Saudi thinking, but even so, I can't see any commercial logic to the present situation.
At Old_Joe If I recall properly from a news blip today (Dec 18) that U.S. output is still quite high......... The Saudi's can still try to grind everyone else into the "sand" from production. But, Iran wants to sell, Libya needs to and what about a few South American countries. And Mexico, too..........the list goes on, eh? Norway's social structure has a big stake in North Sea production. Regards, Catch
Sorry, but if we can predict when it bottoms, it's going to matter less WHERE you invest. I'm really hoping Gold, Emerging Markets and Oil all bottom at the same time and US Global Investors has still not gone bankrupt and I can buy LEAPs for pennies on GROW. All before anyone notices of course. That's WHERE. That would be fun and especially if ALL of the above happens.
Treasury Bills Beat Oil 30 Years On Posted on December 22, 2015 by David Ott Acropolis Investment Management The annualized standard deviation of monthly returns for WTI spot was 25.21 percent. To put that in perspective, it was 16.86 percent for the S&P 500 during the same period, which include the tech bubble/burst and the 2008 financial crisis. That’s right, oil was 50 percent more volatile than stocks, but it yielded lower returns than Treasury bills over a 32 year period. The orange line below takes the historical prices and puts them into today’s dollars ... I find it remarkable that oil was trading at the equivalent of $65 per barrel when the data first started (1983)compared to the $35 level today. http://acrinv.com/treasury-bills-beat-oil-30-years-on/
Update 12/23/15 Oil and Energy Stocks Posted on December 23, 2015 by David Ott One of my favorite long-timer readers asked me today to follow up on the chart from yesterday to include the performance of energy stocks The best quality sector data from S&P only dates back to 1989, so this data set isn't quite as long as what I showed yesterday, but the story is basically the same and I have to admit that I was surprised by how well energy stocks have done over the last 25 or so years. In fact, despite the absolute bear market in energy stocks, which have fallen by about a third since their peak last year, they are still outperforming the S&P 500 when you look at the entire period. (1989-present0 In that same vain, when we look at this shortened period, WTI crude has kept pace with inflation, unlike the chart yesterday that showed crude failing to keep up with inflation - it just goes to show how so much data is period specific. http://acrinv.com/oil-and-energy-stocks/
Dumped my MLP funds INFIX and TMLPX, waited too long, but with them down almost 50% since they were added, that would mean they would have to move up 100% for me to get back to even. Doubt that will happen anytime soon to say the least. Right now proceeds parked in cash, but they represented only 4% of my equity portion when purchased. I am not likely to reenter this sector in near future, I do have some exposure with more general equity funds anyway. That's enough for now.
Jeez. I recall 1971, and gas was .19 cents per gallon. Easier to comprehend that. How does $2.00 gas compare, today? (inflation, and everything else...) My still shiny-new, miniscule stake in COP is down -10.5% since it was begun, just a few weeks ago. I'm not thinking of adding until into the New Year. Further to fall? Not trying to time the bottom. Even if it comes off a new bottom, these are BARGAIN prices.
@Crash The Bureau of Labor Statistics "CPI Inflation Calculator" says $1.11 today has the same buying power as 19 cents had back in 1971. So, if that is what you are wondering about, gas still has a ways further to drop before its that cheap to fill the tank....and they used to throw in pumping, window washing, checking the oil, and free glasses too!
Comments
See "Flashratings," also:
https://www.flashratings.com/stocks/3529-COP?in=true
Helluva nice dividend in COP.
Personally I think that there's still some more downside and tax-loss selling in the works and I am content to wait for the beginning of a rebound before buying any of them again.
On a side note I can't for the life of me figure out how Valero and Tesoro escaped the carnage in this sector.
This list is from M* for the energy sector for mutual funds. There are duplicates of funds on this list, due to various classes of the same fund.
Click on the "YTD" or other columns to sort returns by best or worst.
Agree with @Mark, FENY is what we have also been watching (have an acct with Fidelity). This etf contains many of the big players, has an ER of .12 and a decent yield.
https://screener.fidelity.com/ftgw/etf/goto/snapshot/snapshot.jhtml?symbols=FENY
Regards,
Catch
What is this? Groundhog Day with Bill Murray or something?
Short answer: There is no bottom.
As to a "sub-sector" relative to energy, my first thoughts would/or will take me towards the large cap providers as with FSENX. My second thought would be a possible follow through with FSESX, as this fund is directed more towards the servicing sector provided to the producers. I'm not saying there is a clear investing path for traditional energy, but that I would expect that perhaps a recovery in the large cap company areas would be followed by a positive move from the service providers.
I am less concerned with where the global exposure might be..........as not unlike McDonald's, one is getting both domestic and international exposure to earnings from such a company; and likely the same for many large producers.
This internal Fidelity page is set to "composition" of FSENX. As you scroll down the page you will see that most of this fund is domestic, but we know that earnings from these companies also come from non-U.S. based operations. NOTE: you may use many functions on this Fido page without having an account/login. Example: at the search box to the top right of the page, one may insert a ticker and obtain the same "composition" info, if Fido has that particular fund info for use. You may also click onto any of the other tabs on either side of the highlighted composition tab for other information.
I happen to like the visual layout of this type of page for a quick and dirty look at a fund, etf or stock ticker.
Obviously, a more complete view would be from the fund vendor.
I have not taken any time yet to try a breakdown between domestic and international energy companies.
Only my view/opinion at this time. I have looked and almost hopped into this area over the past 6 months. @hank noted above about "what bottom"......but there will be a bottom price in energy and perhaps a sustained move upward being reflected in positive pricing. Tis a tough call; no doubt. And, of course; we are mostly discussing traditional crude oil stuff here; but natural gas is another wild card for pricing and impact against crude uses. NG is also watched here for a pricing entry point as an investment area.
We still live in strange investing times...........
Various sectors (including energy) are going to continue to have erratic recovery periods, IMHO and there may not be much from the past to offer a guidepost.
Hope to have been of some help for the brain cells.
Regards,
Catch
I'm really curious- do any of you folks have any thoughts on this?
What I can't compute is the nature of the endgame. OK, our best-buddies the Saudi's can shut down our shale and marginally more-expensive production. Then what? They can jack up the price again but not all that far- our reserves aren't going anywhere- if they increase the barrel price a bit too much, we're back on line again. It seems to me that from an anti-OPEC cartel situation we are in a very good position: no need to even actually pump, just maintain the threat.
Some things are not adding up here, at least to me.
1. Are commodities (including energy) a leading indicator of something bad coming down the road that will eventually infect all major risk assets including stocks?
2. How will the geopolitics among global producers finally play out? (This one seems to be the thrust of OJ's question.) Umm ... what would the proposed "carpet bombing" of certain areas in producing nations do to world oil supply? We're already blowing up tankers in the region without much effect on global oil prices.
3. How serious are the industrialized nations about curbing CO2 emissions?
4. How rapidly will alternative energy sources come on-stream? One example is the hydrogen fuel cell. In theory, cars could run on water.
5. How many more warm winters will the U.S. (and much of the industrialized world) experience over the coming decade?
Just a few questions few of us can get our heads around today. Yet 25 years from now the answer to OJ's question will seem perfectly obvious and we'll wonder how we missed it.
Now, think about driverless delivery vehicles. They'll drive more efficiently saving fuel. And the weight of the driver is gone. Average guy or gal weighs-in at what? 100-200 lbs? Magnify that number times thousands and you're talking about a lot of tonnage not being transported daily. Toss-out the vehicle's energy consuming air conditioner too. Won't need it.
Part of the recently passed "budget" from the house and likely to be passed by the senate too, is to allow oil exports, as well as expansion/extension of credits for solar/wind/etc.
http://www.vox.com/2015/12/17/10442030/oil-export-ban-solar-wind
The end game? Saudi's, Russia and others.
This link is crude production by major countries from 2004-2014 and is linked for 2014. Click on a year to change the graphics.
http://money.cnn.com/interactive/news/economy/worlds-biggest-oil-producers/
Mr. Putin recently noted that production will not be reduced, if I recall properly. Looking at the list of major producers, I don't see any that are willing to reduce production; as they need the cash flow, eh?
The continuing end game outcome for crude production will remain to revolve around technology, IMHO; versus actual demand for crude based products. Will these demands or changes with a major impact arrive before you and I leave this 3rd rock from the sun?
I doubt this will happen. But, changes are happening at a very fast rate.
You and I, with backgrounds in technology fully understand the impacts in this area. A 4 year old somewhere today, playing with a smart phone or an Ipad will discover and bring forth ideas the Googles and Facebooks have not yet thought about, eh?
But, cash flow is the name of the game at this point in time. I don't see the major producer countries having many choices right now.
I sure as heck want to get directly into the energy area; but perhaps it will not be an oil play, but another form of energy production, many of which are already in play.
I may have run around the block with this; and not really said much.......or nothing new.
Opps........... to add: http://www.bloomberg.com/news/articles/2015-12-17/what-just-happened-to-solar-and-wind-is-a-really-big-deal
And "some" energy etf's list in broad sectors.........you may uncheck the boxes at the left edge to sort the list of your choice.
Regards,
Catch
Oil Price
FREE
WEEKLY REPORT
18/12/2015
Some corners of the energy world dismissed Goldman Sachs’ prediction earlier this year that crude oil prices might fall below $30 per barrel. But no longer. The investment bank reiterated http://www.houstonchronicle.com/business/article/Goldman-says-only-20-oil-can-guarantee-market-6706218.php?t=90ec76519e438d9cbb&cmpid=twitter-premiumits belief that oil prices may need to fall to $20 per barrel in order to force a significant volume of supply off the market, and such a scenario is no longer seen as a remote possibility. U.S. oil production has only declined moderately thus far, down about 300,000-500,000 barrels per day since peaking at 9.6 million barrels per day (mb/d) in April 2015. But with so many drillers barely hanging on, everyone is still pumping as much oil as possible in order to keep the lights on, delaying the inevitable adjustment in supply. “This rebalancing is far from achieved,” Goldman concluded this week.
For now, the world is still producing somewhere around 1.5 mb/d more than it needs. Capital markets have shunned some of the most indebted drillers, but access to finance remains open for investment-grade oil drillers. In this context, unless oil prices drop another $10 to $15 per barrel, Goldman says, the necessary contraction may not take place quick enough.
http://oilprice.com/newsletters/free/opintel18122015
KENNYPOLCARI
8:21 AM 12/18/15
And the Headlines Say it All!
“Europe continues to struggle, China is slowing, Hi Yield is imploding, Oil is crashing, earnings are being cut, housing is still under pressure, job growth is suspect, manufacturing suggests that we are (already) in a recession, and this bull mkt is long in the tooth…… ”
The fear now is that IF oil does NOT hold at the 2008 lows of $32.40, then you should move away from the fan….because when it hits it won’t be pretty and the start of 2016 will be one for the record books……maybe our friends at GS are right……Could we really see oil at $20/barrel?…….. I mean look - all of the major oil producers (think Saudi’s and the OPEC nations) continue to produce like there is no tomorrow - refusing to 'give in’……..as they try and slaughter the competition (think Russia, US and Non OPEC producers) …..If that is the case then we could all be in for some very rough time in the first half of 2016.
How about that JUNK?
Since 2007, the percentage of corporate bonds that Standard and Poors has rated 'junk’ (or more politically correct - Hi-Yield/Speculative) , has climbed from 40% to 50%. We can thank the FED for this - mostly because they encouraged companies to borrow massive amounts of money at near zero rates to 'kick start’ the economy….. and naturally, much of this borrowing came from the energy, metals and mining sectors - which are now in distress. (Fun Fact: The country is now looking at about $180 billion of total 'distressed debt’* - the highest level since the end of the Great Recession).
[*Distressed debt is the debt of companies that have filed for bankruptcy or have a significant chance of filing for bankruptcy in the very near future.]
And so - sports fans……that IS a problem - because Standard and Poors says that:
“a whopping 72% of the bonds in the metals; mining and steel industry is now distressed. That makes sense given the fact that prices for raw materials like copper, iron ore, aluminum and platinum have recently plummeted to crisis levels. It’s so bad that a key Bloomberg index of commodity prices is now sitting at its lowest level since 1999.”
Notice that they did not estimate what percentage of distressed debt is in the energy space….. and if oil prices stay depressed for much longer, more energy companies could default which will cause those mkts to 'sieze up’ - forcing asset managers to sell what they can…..(and here is where you have to think stocks…..because why? Because stocks are the most liquid, easily saleable, transparent asset class there is….Need to raise money - hit the sell button and BOOM - you are done) .
http://kennypolcari.tumblr.com/post/135441517380/and-the-headlines-say-it-all-try-the-simple
The house of Saud may be many things, but stupid with respect to the world oil market probably isn't one of them. So where does that leave them?
It seems highly possible to me that there's something else going on here, that we're just not seeing yet. I wouldn't be too surprised if the threat of a major production increase from Iran is a factor in Saudi thinking, but even so, I can't see any commercial logic to the present situation.
If I recall properly from a news blip today (Dec 18) that U.S. output is still quite high.........
The Saudi's can still try to grind everyone else into the "sand" from production. But, Iran wants to sell, Libya needs to and what about a few South American countries. And Mexico, too..........the list goes on, eh? Norway's social structure has a big stake in North Sea production.
Regards,
Catch
UPDATE: bought XOM...itchy trigger finger
Posted on December 22, 2015 by David Ott Acropolis Investment Management
The annualized standard deviation of monthly returns for WTI spot was 25.21 percent. To put that in perspective, it was 16.86 percent for the S&P 500 during the same period, which include the tech bubble/burst and the 2008 financial crisis.
That’s right, oil was 50 percent more volatile than stocks, but it yielded lower returns than Treasury bills over a 32 year period.
The orange line below takes the historical prices and puts them into today’s dollars ... I find it remarkable that oil was trading at the equivalent of $65 per barrel when the data first started (1983)compared to the $35 level today.
http://acrinv.com/treasury-bills-beat-oil-30-years-on/
Update 12/23/15 Oil and Energy Stocks
Posted on December 23, 2015 by David Ott
One of my favorite long-timer readers asked me today to follow up on the chart from yesterday to include the performance of energy stocks
The best quality sector data from S&P only dates back to 1989, so this data set isn't quite as long as what I showed yesterday, but the story is basically the same and I have to admit that I was surprised by how well energy stocks have done over the last 25 or so years.
In fact, despite the absolute bear market in energy stocks, which have fallen by about a third since their peak last year, they are still outperforming the S&P 500 when you look at the entire period. (1989-present0
In that same vain, when we look at this shortened period, WTI crude has kept pace with inflation, unlike the chart yesterday that showed crude failing to keep up with inflation - it just goes to show how so much data is period specific.
http://acrinv.com/oil-and-energy-stocks/
See: http://www.bls.gov/data/inflation_calculator.htm