You certainly see it in life – the losers usually continue to lose. And winners win.
It’s the same thing in the stock market. Winners tend to keep on winning, and the losers remain losers for a reason.
With the whole ESG scam unraveling over the past couple of years, the market has voted with their dollars.
That’s what pays.
Not cute bed time stories. Actual Dollars.
Forget the narratives. I want to know what investors are ACTUALLY doing.
And as we have documented here consistently, the voting dollars are being used to buy Energy.
But I continue to be impressed with the strength in Energy stocks, despite the correction we’ve seen in Crude Oil Futures.
Look at that relative strength:
You can see here how important that 86 level is for Crude Oil Futures. If prices are above that, then I have no problem owning Crude.
But again, it’s the relative strength in Energy stocks that continues to grab my attention.
If you don’t have access to either, just shoot me and email and we’ll get you in.
But with that theme in mind, you can really see the differences among Emerging Markets.
Look at the performance of EM with China vs without China. And we also included the EM Ex-China, Taiwan & S. Korea to really drive home the point.
See the massive difference?
China has a 5% weighting in Energy. Taiwan has a 0% weighting in Energy. And South Korea has a 1% weighting.
You can see the lack of exposure “weighing” on their performance. (see what I did there?)
Meanwhile, Brazil has 17% exposure to Energy. Indonesia and Saudi Arabia each have an 8% weighting.
There are countries that are better exposed to the winning areas and less exposed to the losers.
Not all emerging markets are created equal.
Not all S&P sectors are created equal.
Americans don’t have nearly enough energy exposure. That’s the bottom line.
If you own the S&P500, then only 4% of your money is in Energy. If you own the Nasdaq100, then 0% of your money is in Energy.
So you decide.
How are you going to play this?
Feel free to chime in.
Let me know what you think!