Energy and Oil …. Friend or Foe?

This article, originally scheduled for the Q 3 Newsletter, accidentally hit the cutting room floor.  Here is an abbreviated version, with the full article to come in the Next Newsletter.

Energy our Lowered Price Friend

Airlines, heavy energy-consuming companies and summer vacationers are all cheering the lower price of oil, which tumbled dramatically in the fall of 2014. Lower energy prices act as a wage increase for most as in some way a lowered price of energy helps as a “consumer.”

As an Investor or worker in the Oil and Energy field, more of a Foe

As mentioned at the end of our Earnings Article in our Q3 Newsletter, energy has made up a great deal of the drop in earnings for the entire market as a whole. Just as vertical drilling and the various Shoal plays came on-line strong, the price as dropped like a rock.

This from FactSet: EPS estimates for 2015 — Energy is the far right diving down!

6-26-15 EPS Growth 2015 by Sector

Energy and Oil Related, Friend Again

So as a consumer we are happy, but greatly overshadowed if we invest, work or have any related dealings with the energy area.

Hold on, not all is lost—

FactSet 2016 Expectations

6-26-15 Factset EPS Growth 2016 by sector

Yep…that’s Energy expectations roaring back next year.

Never go “all in” or “all out” !

Have a great day!

John A. Kvale CFA, CFP
8222 Douglas Ave # 590
Dallas, TX 75225

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