Generally sentiments are clocking a very high on "FEAR" as the equities market are volatile now. However if we remove emotions and also hearsay, and perhaps pause for a moment. The largest and biggest concern is not in the crude oil price but it's the related industries of O&G. So as we pause to take a closer look the volatity is seeking its own recalibration and perhaps also a rebalancing in currencies owing to the impending US rates hikes.
The upstream and down stream of O&G will see a consolidation thus the swings in the equity markets. As revenue and earnings of O&G related companies suffers I am of the opinion that we can find potentially good bargains. Having said this, investors should not be fearful as the bargain hunting season is now open! Currently with a small window of opportunity the sentiment out there now for investors are that the are generally fearful. Thus we need to be greedy!
This scenario of low oil price will not last for long. Cobweb Theory on supply and demand on fluctuations of price will explain how crude oil price will seek its own equilibrium fairly soon. This was from the 1930's and unless you are that brilliant and can PROVE it wrong, don't you dare challenge it - making your self a fool is fine with others, but missing out on a good bargin is shear stupidity when it comes to your own wealth.
See chart below.
So taking us back to Warren Buffet, his second part of his famous quote "...when others are greedy we be fearful". Now the general sentiments are that others had turn fearful thus as investors we must be greedy and start our bargain hunting!
Having this very correct view which is based on an ever green or ever right Mr. Warren Buffer, let's do our cherry picking. Ask the correct advisor for the correct pickings.
No comments:
Post a Comment