During the first nine months of 2018, the price of oil and oil stocks had appreciated nicely. Then, in Q4-2018, the energy sector led the market decline. In this podcast, Jim explains what he believes caused this decline and why the remainder of 2019 is likely to be just the opposite.
Arnold Van Den Berg and Jim Brilliant give their thoughts about the CM portfolios and the economy.
Arnold Van Den Berg gives his thoughts about inverted yield curves, the economy and the potential for a recession.
Fundamentals continue to support the case of higher oil prices and higher energy stock prices. We believe that investors need to keep in mind that the global supply shortage we are seeing in the physical oil market will be worsening into year-end and into the years ahead. This in turn should lead to materially higher prices. This is at the heart of our energy thesis and is why we continue to hold our energy positions.
We believe the economy remains in good shape, supported by low interest rates, low inflation, and strong employment. We believe earnings growth remains sufficiently strong for further market gains, especially for the holdings in our Century Management portfolios. We continue to see the energy, materials, industrials, and financial sectors as the cheaper sectors of the market.
After a significant rise on Monday, the stock market declined sharply on Tuesday, December 4. We believe this was a result of several issues that converged, heightening investor concern. Adding fuel to the fire and increasing volatility were traders that, in our opinion, felt an extra dose of urgency to balance or close positions ahead of Wednesday’s stock market closure for the National Day of Mourning for President Bush.