I am in another spot. I've been very long O&G for about two years now and its obviously really worked out. However, everywhere I turn now all I hear is be long energy. Look at the FCF yields bros are everywhere you look. I have family in the space in North America and I hear about the lack of labor, the lack of investment, the inflation of parts and services, and then there is ESG. Everything and I mean everything is pointing to an extended bull run for commodities but O&G in particular. I don't like putting money to work when things are this way but I also know sometimes the crowds are right. Last week I started to trim some of my holdings and added to some non energy names I like for the long haul.
Isn't it a bit early to be calling a bottom? QT hasn't even started. QT + deficit = ~250bn+ per month of crowding out for the forseeable future. On a 10 year chart, markets are still far above trend. Then there's a lot of other macro/geopolitcal factors. I'd love to put cash to work but I remain skeptical.
Also from history, Japan has still not regained its 1987 level. If you were in the market in 1929, the Dow would not return to that level until 1954.
It's worth bearing in mind deflation and exceptional dividends for the 1929-1954 statistic: https://www.nytimes.com/2009/04/26/your-money/stocks-and-bonds/26stra.html
I am in another spot. I've been very long O&G for about two years now and its obviously really worked out. However, everywhere I turn now all I hear is be long energy. Look at the FCF yields bros are everywhere you look. I have family in the space in North America and I hear about the lack of labor, the lack of investment, the inflation of parts and services, and then there is ESG. Everything and I mean everything is pointing to an extended bull run for commodities but O&G in particular. I don't like putting money to work when things are this way but I also know sometimes the crowds are right. Last week I started to trim some of my holdings and added to some non energy names I like for the long haul.
Investing is fun but it's not easy.
Isn't it a bit early to be calling a bottom? QT hasn't even started. QT + deficit = ~250bn+ per month of crowding out for the forseeable future. On a 10 year chart, markets are still far above trend. Then there's a lot of other macro/geopolitcal factors. I'd love to put cash to work but I remain skeptical.
Good writeup. Certainly time to put some cash to work