HATERS GONNA HATE ----- OIL!!

The world seems to HATE oil

 I mean, I’ve been following and trading oil and oil stocks for more than 35 YEARS, and I’ve never seen it quite like this………

 It doesn’t matter if the stock market goes up or down – it seems that oil stocks GO DOWN.

Heck, it doesn’t seem to matter if OIL goes up or down – Oil stocks seem to GO DOWN.

 You get to the point where you wonder whether we’ve actually reached some sort of “New Normal”.

 Now THERE’S a phrase I’ve heard a million times in my 35 years tracking oil and oil stocks. Always a NEW NORMAL.

 There was the new normal of $100 a barrel crude between 2010-2014 – there was no way oil was ever going come out of the ground for less……..so we’d better get used to it.

 Well, the crash of 2014 proved that to be wrong.

 Then, there was the new normal of 2015-2016. Oh, shale is endless and cheap – and we’re going to be a completely electric world soon anyway. Oil is just obsolete, you know……..

Well, oil is rebounding now above $60 a barrel – and getting stronger. It doesn’t look very obsolete to me. 

Now, the new normal I hear is that millennial investors and hedge fund managers don’t ‘like’ oil stocks – they want modern, forward looking tech and social media equities to invest in. They wouldn't sully their portfolios with old-fashioned and ‘dirty’ oil stocks.

But I really doubt millennials dislike PROFITS any less than we do -- My guess is that when oil proves it's not quite 'finished' yet as the major energy source to power the globe for the next three decades AT LEAST, we'll see more younger investors 'discover' the value in oil stocks.

Over my 35-year career, my experience has been that there’s hardly EVER a ‘new normal’.

So what does that mean for us as energy investors?

It means that the strength in the price of oil barrels and the weakness in the prices of underlying oil stocks is not going to last. It means that the enormous disconnect we've been seeing between the major stock indexes and the energy indexes is a discount that is 'wrong' and destined to shrink.

It means there’s an unbelievable opportunity forming right now in oil stocks – stocks that are being unfairly ‘hated on’. Stocks that are incredibly undervalued. Stocks that are going to be trading for a heckuva lot more than they are right now.

In a stock market that's currently handicapped by historically high valuations, rising interest rates and a likely coming trade war with China, that's something worth considering as you view your portfolio going forward.