In 1981, the Energy sector was the most valuable GICS sector making up almost 25% of the U.S. stock market. Since then, inflation was tamed by Mr. Volker’s aggressive monetary tightening policies while the cost of energy fell as the U.S. became one of the largest shale gas/oil producers in the world. Furthermore, the drive to embed ESG policies on new investments led to many active mangers shunning traditional energy companies leaving the Energy sector weight in the U.S. Large Cap indexes at an all time low of 2.3% in 2020.
As we search for investment opportunities in this new inflationary environment, where resources have become scarce, and supply bottlenecks are everywhere, we discuss the following pertinent topics with industry veterans:
Energy Crisis 2022?
- Why was Energy the best performing asset class in the last 12 months?Are we entering the world of Malthusian theory? Is the innovation cycle dead?How does the commodities basket perform when CPI is above 2 to 3%?
- What are the asset classes with the highest sensitivity to inflation?What is the implication on agricultural product prices due to the war in Ukraine?
- Clean energy vs. “the dark side.” Do we have enough clean energy?
- What are some of the key natural resources and the investment opportunities going forward?