[H8crilA]

$XLE for those that want to pick up cheap stocks.

Till there's a global solution to the energy problem we'll need oil. Existing solutions are nowhere close to being sufficient, therefore divestment will have no impact on the amount of oil burned. It's ridiculous to think that clicking a sell button on some assets will fix global warming, that's not how the world works.

https://en.wikipedia.org/wiki/World_energy_consumption

As Bill Gates says, we need to fight two fronts of misinformation: a) that global warming is not a problem, and b) that it is an easy problem.

[maest]

> $XLE for those that want to pick up cheap stocks.

A nuance is that you don't want to buy into these stocks while people are moving away from vice stocks.

However, once the trend is stabilised and there are no more marginal investors to adopt a vice-free portfolio, then you should buy all the vice stocks as they will have a more favourable discount rate.

[scarmig]

I remember immediately after Deepwater Horizon, RIG dropped something like 50% to $40 a share or so. I invested heavily in it, proud of my own savviness and cynicism.

That worked out well.

[perl4ever]

I found that investing in BP when people were at their most pessimistic about the well being capped did work well.

Unfortunately, following up that success by buying into TEPCO once it had dropped by half after their accident turned out not to be a good move.

However, one may console oneself that it was a public service in providing some cash to the Japanese pension funds, proverbial widows and orphans and whatnot that were selling at that time.

[H8crilA]

It's already the cheapest segment of the S&P 500: https://www.gurufocus.com/sector_shiller_pe.php

Timing the exact bottom is hard.

[phkahler]

IMHO the price will only be low while people are selling. You dont want to wait for that downward pressure to stop. You never know how fast it will bounce back.

[ced]

> It's ridiculous to think that clicking a sell button on some assets will fix global warming, that's not how the world works.

It's ridiculous to think that reduced demand for some stock will not reduce its price.

More concretely, the more banks and people make gestures like this, the easier it is for politicians to reduce subsidies / increase taxes for fossil fuels, which will definitely reduce the amount of oil burned.

[gruez]

>It's ridiculous to think that reduced demand for some stock will not reduce its price.

That's the point. Stocks are priced according to discounted future earnings. if the price goes down but the future earning prospects hasn't changed, it means I can get future earnings for cheaper. In other words, my rate of return has improved.

[H8crilA]

My point is that the stock price has nothing to do with the amount of oil burned. Exxon Mobil could trade for $0.01, doesn't matter, they will still sell oil.

The second part is true, it is shaping the narrative somewhat. We'll need much more hardcore stuff than just twiddling the narrative, though.

[perl4ever]

Well, it is possible that there will be real restrictions on producing or selling fossil fuel that will progressively eliminate demand for their product. In which case, their assets are not worth what they might previously be assessed at.

P/E is either backwards looking or based on estimates of future earnings, and the future often changes.

I can't say who's got a more accurate view of the future, but the Aramco IPO suggests that the Saudis are anticipating people getting serious about global warming before too long and they want to at least test the waters.

[H8crilA]

Of course there will be pressures. Europe is already taxing oil at +100% compared to the US (i.e. the prices of gasoline are 2x higher).

But my point still stands - humanity needs energy.

Also, of course, this is not an investment advice! You may lose 100% of money yada yada.

[icebraining]

Less money invested in oil means more money to invest in alternatives, which is what they're saying they will do.