A sampling of some of the analysis I've made that has come to pass is or happening now...
Welcome. The content below is free to the public. It might be worth what you are paying for it. Having studied economics and being in finance for over two decades, I have learned that only one thing is certain - that almost nothing is certain. As we endeavor to come up with our best analysis of the world around us, the opportunities and risks, we have to try to overcome a myriad of issues including our own ignorance, biases and emotions. What follows are my attempts to overcome those obstacles. Welcome to my view - publishing Monday and Friday afternoons.
Exact Sciences (EXAS) is under attack again by shorts. The arguments this time are similar to the arguments made in the past and just as likely to be wrong. That doesn’t mean, however, that investors and Exact Sciences itself can’t learn something from the rehashed criticisms.
Our "Very Short List" is composed of 40 to 50 extensively researched companies that are poised to double, triple or more in price the next few years. The Very Short List list includes the more conservative Fundamental Leaders group of strongly profitable companies trading at value prices often paying a dividend and the Emerging Leaders which have catalysts that could lead to explosive growth.
Oil has historically had a risk premium attached to its price. But since the shale revolution and OPEC's decision to flood the market with oil, that premium has been nearly nonexistent.
That is about to change as risks in the Middle East, particularly centered around Iran, come to the forefront again.
In January, Donald Trump became President of the United States to much consternation from over half of Americans and many abroad. In recent weeks, President Trump has appointed key people to his cabinet and started to transform the government. As I stressed in my annual letter for my investment advisory firm, Trump's overtly nationalistic rhetoric is very concerning to me.
Five years ago, in the article that landed me a role writing for MarketWatch, I said that there was "one general thing that changes everything for America." That one thing was the advent of American shale oil. The "fracking" revolution in the United States quickly went on to help oil prices crash and reduce America's dependence on Middle Eastern oil by half.
Today, we are on the cusp of massive interconnected changes in the oil industry. Three of these things all but guarantee that oil is headed back to $100 per barrel. The decline in oil production from existing wells, OPEC's control of low cost oil production and the revival of U.S. fracking growth will all drive oil prices higher.
Oil prices will not necessarily stop rising at $100 either. There are two more factors that could drive oil well past $100 that I will cover Friday. It all adds up to a golden opportunity to invest in certain parts of the oil complex one last time before electric vehicles and new methods of creating plastics take hold in the 2020s.
The rally in oil stocks since the OPEC agreement to cut 1.8mbd of oil production for the next six months has been tremendous. As usual, investors only seem to be getting the stock picks less than half right.
The stocks that investors should be buying are the low cost shale producers. Companies focusing on the Permian Basin, Eagle Ford, the STACK and SCOOP in Oklahoma, and the center of the Bakken have huge advantages to other producers, especially the oil majors who OPEC will continue to keep a thumb on.
Last week I asked if a Trump, China conflict could lead the U.S. into recession? The point of the question was how important the Trump and China relationship was to the U.S. economy. In one short week, Trump has antagonized China on two more fronts. Seemingly, he is deliberately trying to instigate with China. That is a very high risk move with little upside for America.
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