It’s so hard to be consistent as an energy analyst and trader – there’s truly no other sector with so much of the economy riding on it that seems to undergo more ups and downs.
We’ll have months, sometimes years of rising prices like other growth areas in the economy – with rising production, increasing jobs, stronger balance sheets. All seems to be going well and then – BOOM - almost without warning, we’ll get a complete market bust.
As an analyst, I’ll spend the next months, and more likely years, just waiting for the gluts and overspending to slowly drip out. My days become a constant search for the one or two lone sub-sectors or companies that might have seen a bit ahead, maybe prepared (at least a little?) for the bust cycle and are scrupulously planning longer-term towards the next boom cycle with discipline.
And then – when you think you might have found one, maybe ONE company with a bit of foresight, a plan for the downturn, and an even more disciplined plan for the inevitable turnaround in prices, another, entirely unrelated but massively destructive event will emerge out of the blue.
Frustrated, and likely with some of my own money in this company, I’ll now try to figure out whether this event – whatever it is – is fairly re-valuing my investment, and whether I should see this as an opportunity --- or as an omen – to go find another place for my capital.