You are just noticing for yourself that the price of oil, and with it gasoline prices, are rising rapidly. Thanks to our analysis models, Roland Leuschel and I anticipated this development. For this reason, in December last year we dedicated one of our key issues to the classic energy sector. It was entitled “Undervalued, bombed out and extremely unpopular: The classic energy sector and its opportunities”. In it, we emphasized the extraordinarily good risk-reward ratio that stocks in this sector offered at the time – and to a large extent still offer them now.
It’s still worth getting started
Therefore, despite the nice price gains of up to 45% that our stock recommendations have achieved since then, it is not too late to get involved. As we explained in the thematic issue, not only has a cyclical bull market started in the energy sector, but in all probability even a very long-term upward trend that will continue for many years.
It doesn’t work without oil and gas
The conversion to so-called renewable energies is not only expensive, it also takes a lot of time. So you can turn it around as you wish, and a continued high oil consumption is guaranteed for the next 10 to 20 years. Even if drastic austerity measures were taken worldwide and laws were enacted to reduce consumption, after 10 years there would only be a decrease in oil consumption of around 10%, estimates the International Energy Agency IEA, which is part of the OECD.
Other estimates even suggest a further increase over the next 20 years. This will be ensured by the ongoing population growth and the understandably strived for economic growth around the world, which is the prerequisite for a better quality of life and a better world for billions of people currently living in poverty.
Black and white painting is counterproductive
The big oil companies are increasingly being attacked. But without their work the wheels would stand still very quickly and people would go hungry. If you do not want that, you should support the players in their long-begun efforts to also play an important role in the field of renewable energies by buying oil stocks.
The commitment of some corporations even goes far beyond the energy projects that are now common. It extends to research into hydrogen technology and CO2 binding or CO2 further processing, i.e. areas that are regarded as future-oriented problem solutions, especially with regard to the climate change discussion.
For you as an investor, the fundamentally favorably valued sector offers excellent opportunities not only because of the continued need for oil for many years to come, but also because of the forward-looking reorientation of the corporations. Find out about this exciting area at the highest level with my stock market letter Crisis-proof Investing, and find out which energy stocks we are currently recommending to buy. Test Crisis-Safe Investing – 30 days free.
I wish you a nice weekend,
Claus Vogt, Editor-in-Chief of Crisis-Safe Investing
PS: The precious metals sector is also in a long-term bull market. With good mining stocks, you can face inflation with confidence.
PPS: If you want to get through this crisis week after week, please request the free Claus Vogt market commentary today hereeasily with your email.
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