Good evening. I'm back from Vegas now, but the overnight flight meant that I was too jet-lagged to be able to write a coherent report earlier today. We don't want any gaps in the series, so I'm catching up this evening having had a long afternoon nap!

Oil

I'm always looking for bargains, and it strikes me that the extraordinary collapse in the price of oil might be starting to throw up some buying opportunities? So I'll be suspending my usual rule of not looking at any resource stocks, and might consider the odd one - but only if the investing case is compelling, and low risk - so producers, with cash on the Balance Sheet, will be my starting point. One has to assume that most of the cash-strapped junior explorers are not worth even glancing at.

Lower energy costs will certainly help in particular the US consumer, as they are heavy users of oil for heating & in vehicles, which is taxed lightly compared with Europe - so the benefit of the big drop in oil price is already putting more disposable income into consumer pockets in the US. I might start looking at some US stocks when time permits. Amongst all those thousands of stocks, there must be some undiscovered bargain small caps!

Historically the US economy has always boomed on the back of cheap energy, so it probably will do again. Maybe the apparently expensive US stock market isn't so wildly priced, given the upside on economic growth, on what is still the world's biggest & most entrepreneurial economy?

I did some reading on holiday, and one phrase which stuck in my mind from some investing guru (can't remember which) is that when a share, or a market as a whole, breaks into new highs, then you have to stop and consider that something significant has changed - and that betting against such a move could prove a mistake. On the other hand this is something like the 3rd longest bull market in history, so it must be nearer the end than the beginning?

So lots to ponder. I'm mainly a bottom up stock picker, but it also makes sense to monitor big macroeconomic themes & trends, and at least have a rough idea of where we are in the business cycle, and invest accordingly.


Porvair (LON:PRV)

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