John Dorfman expects energy stocks to surge when the recession ends:
Energy stocks may be especially timely now. They usually do
quite well after the end of a recession.
No one knows when the current recession will end. A few months ago, most economists were guessing 2010 or 2011. Today, many are predicting it will end this year -- a view I share.
I examined the performance of three energy indexes after
the end of the past five recessions. By my calculation, oil
drilling stocks rose 22 percent on average over the ensuing 12
months. Oil exploration and production companies gained 13
percent, and integrated oil companies 9 percent.
By comparison, he reports the S&P 500 averaged a gain of 8%.
I've actually been thinking of some energy stocks -- particularly oil and gas related companies. But I've got to do a lot more research before putting any money to work there.
Very good article.
In my opinion, it is all a matter of market timing. It does not matter if it is gold, oil, or Microsoft, if you have access to good market timing signals, they will help you get in and out at a profit.
No guarantees in this business, but if they are right most of the time, you can still make $s.
There are may web sites providing them out there (search Google). Just find one that works and use it! Check out http://invetrics.com as an example.
Its Dow Jones timing signals are up 43% as of 6/23/09 while the Dow is up just 29% off its March lows.
Following a market timing system works!
Posted by: Michael | June 24, 2009 at 01:52 PM
@Michael: I agree that the price you pay to get in is important, though us value guys all are guilty of getting in too soon.
It's like many real estate investors say: "I make my money on the purchase, not the sale."
Posted by: John | June 24, 2009 at 10:42 PM