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So, we happen to make the correct call in December and think this direction will continue, volatility is here to stay. In the short term, who knows which direction we will see, but over the course of the year I believe we will be higher. Many retail investors have been once again, spooked. I understand this; I think they should be and anyone in this market should be more cautious and nimble. While we have been this way for some time in clients’ portfolios, I am not here to say 'we told you so'. All too often you can be on the wrong side of the market, and if we criticize, we will be criticized. What we do want our readers to know, is be calm. The world is not ending--at least as far as we see.
Other comments on recent postings: Oil. It rose to about $89/bbl and has since fallen. Go figure. This is volatility. I personally think the price of oil is cheap and as of last night, OPEC raised their consumption outlook again, as expected, to 950k bpd (barrels per day) versus 900k bpd. This is important because this is the third straight month the group has done such an action. We think that this will continue because as we noted in our Q1 research, the economy is going to recover faster than many expect, and therefore oil consumption will rise to more normal levels at a faster pace than expected.
As for Natural Gas, we still believe this will be the fastest growing source for fuel, and so do others: See Tillerson On CNBC.
We think the political hurdles will also cause extraction issues and therefore the abundance perceived will be hampered by these issues and drive prices higher.