Special Report: Energy

07/08/2005 12:00 am EST


Despite volatility, energy is at the top of the long-term buy lists of many leading advisors. Is this "consensus" a reason for concern or confirmation of an established trend? Please read on. I think you'll be very surprised as I explain the reasoning behind this special report.

"This is the first time since we have been publishing the Money Show Digest that we've seen such a preponderance of recommendations for the oil and gas industry- enough to warrant this special report. Many view the oil sector as defensive, and as a hedge against uncertainty, geopolitical risk, and a potential rise in inflation. Many simply point to energy as a way to participate in global growth and the continuing boom in overall commodity prices.

"Some might say this broad consensus should be viewed as a contrary indicator, suggesting that the market should move counter to what is expected by so many. While I strongly agree with the general notion of contrary investing, I'd emphasize that the advisors included under our coverage-The Money Show speakers- are truly the best of the best, and do not represent the type of consensus that you'd want to bet against."

Okay, I've deliberately misled you. This is not the first time we've featured a special report on energy in the Digest. In fact, the commentary above was my introduction to that first report-which appeared in January 2004. At the time, oil had just broken above the $30 per barrel level. And despite the interim ups and downs, those who followed the advice of our Digest contributors have participated in a powerful uptrend, as oil prices have doubled and the recommended energy stocks have followed suit.

I would point out one notable difference this time around. The attention to the basic energy plays-integrated oils, distribution, and transportation- seen in our first special report has been supplanted by an increased focus on more specialized areas, such as refiners, deepwater drilling, oil services, and alternative energy. Here, then, we present you with a wide variety of ideas to help continue to energize your portfolios.

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