Next year promises to be, at the very least, an interesting year for us as energy investors. We've never seen this kind of business approach to the White House, and the names that continue to come up that will be heading to Washington have only one of three loyalties that I can see: The military, investment banking and oil.
I have no way to gauge how much it might help our investments in oil and gas, but it certainly won't hurt. Some of the names are so astoundingly favorable to oil interests, like Rex Tillerson of Exxon Mobil (XOM) , it's hard to believe - but even those who aren't obvious have very strong ties to oil.
Here are some less obvious ones: Look at the incoming Commerce secretary, Wilbur Ross. One of his worst investments in his career has been natural gas producer Exco Resources (XCO) , down from over $20 a share in 2011 to under a buck. I am sure that one reason Ross decided on entering the cabinet of Donald Trump was to do what he could to help that investment and help his fund's legacy. Ryan Zinke, the incoming Interior secretary, is an anti-regulatory figure and climate-change dissenter from Montana.
Vincent Viola, tapped to be the U.S. Secretary of the Army, traded oil next to me in the pits of the New York Mercantile Exchange, before becoming chairman of the exchange and starting an exceedingly successful oil algorithmic trading firm, Virtu. Carl Icahn, a majority shareholder of CVR Refining (CVRR) , was named today as special adviser to the president on matters of regulatory relief.
Everything in the incoming Trump administration points in one way or the other towards oil or other energy interests -- and points us towards a much more aggressive investment approach favoring oil stocks.
Now that the year is ending it is a great time to take a look at your overall investment portfolio and see where you have been under-performing and where you might look to swap sector investments towards energy. With the next few stock sessions, you'll have your last opportunities to do some tax-loss selling on those parts of your portfolio that have done poorly to raise capital to deploy in the New Year on some high quality exploration and production, oil services and infrastructure stocks.
And I'll be here to help you pick the right ones. Have a great holiday.
