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Off topic completely, but is there a long bull case for energy? Are we seeing a bottom in oil and natgas prices or will secular changes and renewable consumptio

by indescions_2017 9y ago

Off topic completely, but is there a long bull case for energy? Are we seeing a bottom in oil and natgas prices or will secular changes and renewable consumption dominate? And are infrastructure funds such as $ALPS, $ENFR a good way to get exposure and long term income distributions? Thanks in advance! As far as Chamath's Hedosophia, not sure I'd bet against him just yet. He's got a pretty good track record of winning ;)

hendzen 9y ago
Everyone looks like a genius in a bull market.
- charlesdm 9y ago
  And everyone looks like an idiot in a bear market?
pfarnsworth 9y ago
Oil prices are low because Saudia Arabia and the US want ISIS to be squeezed in terms of funding, and it's working. That's the only reason why prices are so manipulated. Expect prices to rise back to $100 once ISIS is gone.
- adventured 9y ago
  No. Oil prices are semi-low for two reasons. 1) An endless oversupply due to the US oil boom. Even the OPEC cuts + Russia restraint + Saudi cuts to the US market + OPEC cut extension + modest demand growth have not been enough to inflate prices. There's vast supply perpetually waiting on the sidelines, between Russia + the US + OPEC, there's no scenario where $100 oil returns anytime soon. 2) The strong dollar. Commodities are largely priced in dollars globally. If the dollar goes up, oil goes down. Oil tanked exactly in line with the greatest dollar bull run in decades. July 1st 2014, the dollar index was at 80, eight months later it was at 100 - a massive move by the dollar. Over that time oil got cut in half. ISIS is entirely meaningless in this context.
  - pfarnsworth 9y ago
    No, you're absolutely wrong. Saudi Arabia was FLOODING the market with oil since 2015. They were producing at historical levels in 2016, even in the face of plummeting oil prices. https://www.bloomberg.com/news/articles/2017-02-20/saudi-arabia-breaks-records-on-oil-exports-and-output-for-year https://www.bloomberg.com/news/articles/2017-02-20/saudi-ara... Why do you think that is? The only reason why they flooded the oil markets with oil is because they wanted a low oil price. And the very simple explanation for this is because they wanted to starve ISIS from all their extra money they were receiving from black market oil. They eased off a bit because they've achieved their goal to maintain rock bottom prices, but they're still producing > 10M barrels a day. There's an oil glut because Saudi Arabia and the US want an oil glut. There's no sane reason why Saudi Arabia increased production to historic levels in the face of $40/barrel oil prices except for the fact that they want a low oil price.
    - chollida1 9y ago
      Look, you are right that Saudi Arabia flooded the market, but there are many much more plausible and, perhaps more meaningfully, publically stated reason why they did this. - they were trying to starve out oil sands and other alternative oil sources to ensure they don't continue to come online in the near term, this has had some success as anyone in Calgary or Edmonton will tell you. This is far and away the biggest threat to Saudia Arabia's oil business and probalby the first thing you should look into. - they need money, they essentially buy peace in their own country by showering it with money. As oil prices fall due to more oil being available, they have to sell even more to make their budgets balance. Russia is also doing the same. I'm sure ISIS is in their minds but its much more of a happy conincidence. I mean oil isn't bitcoin, you can't just send it over the internet. ISIS was selling to Syria, If you want to stop ISIS from selling oil to Syria, then wouldn't you just ask Syria to cut it out and if they didn't listen then wouldn't you start bombing them..... hmm sounds familiar Always look for the simplest answer first, just shouting ISIS doesn't make a whole lot of sense when you consider how much the depressed price of oil has hurt Saudia Arabia int he past few years.
      - 9y ago
perseusprime11 9y ago
Not betting against him but there are couple of things to note 1) Not many new undiscovered markets exist 2) Google, Amazon, Facebook, Microsoft are getting bigger and bigger. 3) More bets tend to fail than succeed. So coupled with 1) and 2), not sure how much money will be left in 600M
- djrogers 9y ago
  > Not many new undiscovered markets exist Uh, how would we know that if they’re undiscovered? No, seriously - back up 20 years and tell that to the people who invested in Google/FB/Amazon. Or back up 10 years and Tell that to the folks who were going to invest in mobile gaming startups. Or how about 5 years ago - tell the folks who were starting Uber and Lyft that their markets don’t exists.
  - perseusprime11 9y ago
    Pace has slowed down by all accounts. I am only talking about big opportunities outside of GAFA. Also look at GDP growth.
    - alasdair_ 9y ago
      >Also look at GDP growth. GDP seems like a terrible way to measure the economy. Let's smash all of Bastiat's windows and grow the GDP!

hendzen 9y ago

Everyone looks like a genius in a bull market.

charlesdm 9y ago
And everyone looks like an idiot in a bear market?

pfarnsworth 9y ago

Oil prices are low because Saudia Arabia and the US want ISIS to be squeezed in terms of funding, and it's working. That's the only reason why prices are so manipulated. Expect prices to rise back to $100 once ISIS is gone.

adventured 9y ago
No. Oil prices are semi-low for two reasons. 1) An endless oversupply due to the US oil boom. Even the OPEC cuts + Russia restraint + Saudi cuts to the US market + OPEC cut extension + modest demand growth have not been enough to inflate prices. There's vast supply perpetually waiting on the sidelines, between Russia + the US + OPEC, there's no scenario where $100 oil returns anytime soon. 2) The strong dollar. Commodities are largely priced in dollars globally. If the dollar goes up, oil goes down. Oil tanked exactly in line with the greatest dollar bull run in decades. July 1st 2014, the dollar index was at 80, eight months later it was at 100 - a massive move by the dollar. Over that time oil got cut in half. ISIS is entirely meaningless in this context.
- pfarnsworth 9y ago
  No, you're absolutely wrong. Saudi Arabia was FLOODING the market with oil since 2015. They were producing at historical levels in 2016, even in the face of plummeting oil prices. https://www.bloomberg.com/news/articles/2017-02-20/saudi-arabia-breaks-records-on-oil-exports-and-output-for-year https://www.bloomberg.com/news/articles/2017-02-20/saudi-ara... Why do you think that is? The only reason why they flooded the oil markets with oil is because they wanted a low oil price. And the very simple explanation for this is because they wanted to starve ISIS from all their extra money they were receiving from black market oil. They eased off a bit because they've achieved their goal to maintain rock bottom prices, but they're still producing > 10M barrels a day. There's an oil glut because Saudi Arabia and the US want an oil glut. There's no sane reason why Saudi Arabia increased production to historic levels in the face of $40/barrel oil prices except for the fact that they want a low oil price.
  - chollida1 9y ago
    Look, you are right that Saudi Arabia flooded the market, but there are many much more plausible and, perhaps more meaningfully, publically stated reason why they did this. - they were trying to starve out oil sands and other alternative oil sources to ensure they don't continue to come online in the near term, this has had some success as anyone in Calgary or Edmonton will tell you. This is far and away the biggest threat to Saudia Arabia's oil business and probalby the first thing you should look into. - they need money, they essentially buy peace in their own country by showering it with money. As oil prices fall due to more oil being available, they have to sell even more to make their budgets balance. Russia is also doing the same. I'm sure ISIS is in their minds but its much more of a happy conincidence. I mean oil isn't bitcoin, you can't just send it over the internet. ISIS was selling to Syria, If you want to stop ISIS from selling oil to Syria, then wouldn't you just ask Syria to cut it out and if they didn't listen then wouldn't you start bombing them..... hmm sounds familiar Always look for the simplest answer first, just shouting ISIS doesn't make a whole lot of sense when you consider how much the depressed price of oil has hurt Saudia Arabia int he past few years.
    - 9y ago

perseusprime11 9y ago

Not betting against him but there are couple of things to note 1) Not many new undiscovered markets exist 2) Google, Amazon, Facebook, Microsoft are getting bigger and bigger. 3) More bets tend to fail than succeed. So coupled with 1) and 2), not sure how much money will be left in 600M

djrogers 9y ago
> Not many new undiscovered markets exist Uh, how would we know that if they’re undiscovered? No, seriously - back up 20 years and tell that to the people who invested in Google/FB/Amazon. Or back up 10 years and Tell that to the folks who were going to invest in mobile gaming startups. Or how about 5 years ago - tell the folks who were starting Uber and Lyft that their markets don’t exists.
- perseusprime11 9y ago
  Pace has slowed down by all accounts. I am only talking about big opportunities outside of GAFA. Also look at GDP growth.
  - alasdair_ 9y ago
    >Also look at GDP growth. GDP seems like a terrible way to measure the economy. Let's smash all of Bastiat's windows and grow the GDP!