I’ve decided more or less to cling to the oil stocks I had before last year’s implosion. BAS and HCLP remain in my portfolio, and into the decline I added VOC.
On the face of it, this is a bad move. The oil price decline was a classic collapse and these things have a way of being dead money for prolonged periods of time after the big drop off.
I can think of things like uranium prices or old school tech where the market tanked and people sat around, wasting their lives, waiting for a redemption that still hasn’t come. (On that note, I still own CCJ too, and am getting quite impatient with the Japanese).
But if there’s one market that breaks the mold, it has to be oil.
Oil has dumped spectacularly, twice in the past seven years, and it always returns right back to new highs. Not since before the ’90’s has oil been truly dead money.
The world is modernizing and despite all the hoopla about pretty battery packs you can adorn your house with, if humanity is to fully push into 21st century modernity, then it will need oil and lots of it.
This isn’t just about gasoline for cars. I mean it certainly is about gasoline, as a young society will need cheap options available to create a footing. But it’s also about raw material for industrials.
So I have decided, despite horrendous 30% losses last year, to more or less stay put. Everyone is so negative right now, but if recessions and corrections were so obvious and always about to happen, then they wouldn’t be so devastating or rare now would they?