Despite A Horrible Finish To Q2, Energy Investors Should Remain Confident On The Outlook Going Forward
I have been thinking very clearly and in the business of investing, that's all you can ask for. Making or losing money on your stock picks and trades are just byproducts of how clearly you are thinking. The more unbiased your thought process is, the more rational decisions you make, and hopefully, the more money you make.
So as I sit here looking at our bad finish to Q2, I can't help but feel zen amidst all this chaos. Don't get me wrong, there are a lot of potential headwinds on the horizon, but energy investors should remain confident on the outlook going forward.
There are times when investors have to start focusing more on sentiment than fundamentals and there are times when fundamentals are so bullish that you be foolish to focus on the sentiment. We had a minor crossover in June when sentiment become more important than fundamentals. When the Fed raised interest rates higher than expected and the market gasped, sentiment took over and fundamentals took a backseat. And with energy stocks recently dropping as much as ~40%, the fundamental driver has taken over again.
What energy investors need to realize is that the most important factor that will help drive future profits for energy stocks today is how well the physical oil market holds up.