re: There’s more oil and gas than ever — and the industry is tanking

quote:

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It might not be this year. Or next. But I’m bullish on American O&G coming back stronger than ever in the coming years.

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Honestly, you’re whole post made more more bearish for a number of reasons:

A. You presented a list of unpredictable, uncontrollable events that are seem both absurd and plausible. All of that is just one big collection of risks, and a lot of downside risk at that.

The sector has already has already had historically low returns and high risk despite the broader market having the opposite. That’s resulted in a beta of 1.27 and an alpha of -13.91%. So the returns would have to increase significantly to make it worthwhile and all that you laid out would only increase the beta.

B. Although the relationship has diverged a bit lately, one of the major drivers of gains in the sector is the price of its commodities. And when those commodities rise it negatively impacts other sectors AND consumers who use these commodities.

C. As discussed earlier, this sector is not only being increasingly avoided by environmentally conscious consumers, but environmentally conscious investor, and this type of investing is becoming more popular.

D. Alternative options (e.g., electric cars, solar power, etc.) for this sector is becoming more and more popular, affordable, efficient, and most importantly, adopted by both consumers and companies. And there are an increasing number of companies developing and providing these options.

So risk-sensitive investors/consumers are going to care about A; price sensitive investors/consumers are going to care about B; environmentally sensitive investors/consumers are going to care about C; all 3 are going to be more likely to avoid the sector for these reasons; and D provides (for maybe the first time ever) a viable alternative for consumers/investors.

And personally I care more about avoiding risks and lowers prices but a little environmentally friendliness is a nice cherry on top. So you not only made me want to avoid the sector more than I did before, I now want to buy a Tesla (already did) and put some solar panels on my house (likely won’t though) than I did before.

Regardless, maybe it’s because the energy sector is so much more important to the region that most of the posters on here are from, but I just don’t see how people can he so bullish about the sector given all of the headwinds. I mean O&G is obviously going to still be necessary (since this has been a popular Strawman argument here), but I think its best days are likely to be in the past and most people are going to be happy about having some competing alternatives.