You know, as I read this post about scary stock value declines, I began to wonder. Are energy sector stock declines positively or negatively correlated with more general declines in economic activity?
One of those research questions that I’ll probably never tackle.
I think Hamilton cited a paper on this a few years ago (meaning at least 2 and up to 8 years). . It basically came down to why prices declined, i.e. overabundance of supply/new tech vs decreased demand.
Steve
Generally “un-” would be my answer. We have looked at energy related companies for 20 years, and plied the minds of all kinds of consultants and industry insiders. To be sure, overall economic activity means energy consumption. But it quickly breaks down into soft and counter correlated issues: supply, technology, regulation….
Investing in energy is not for the faint of heart.
Investing in anything is not for the faint of heart, these days…..
I’m not schooled in the stock market game, nor do we have much invested in it. It marginally interests me, though because it’s rise and slumps often appear to be governed by either luck or Russian Roulette economics. I’m also not one of those passive or silent investor types eager to put financial earnings and our future fiscal security into the hands of financial advisers. So, that’s why we have always chosen a more hands-on road of employment and investing.