Warren Pies is overweight energy for multiple reasons. The founder of 3Fourteen Research joins Harry Melandri to make the bullish case for everything related to hydrocarbon extraction, production, and delivery to market, citing years of poor management and negative cash flow as the primary reasons the sector was discounted. Warren explains why high-quality energy stocks should have a place in any long-term portfolio – and he notes that some housing exposure might be a good idea right now too.
With the spread between nominal GDP and rates extreme in US & Europe, something has to give. Relative moves in the components in the two regions will inform policy and markets. Hyper-financialisation makes stocks the “tail” wagging the macro “dog”. Below, a (bearish) framework allowing room for countertrend oscillation and some observations on bonds and FX.