It’s a funny thing. I actually like going to the dentist. Not because he cleans my teeth thoroughly, but because we talk about stocks all throughout the appointment. Actually, he does most of the talking, for obvious reasons.
In my last appointment, my dentist was very happy. We got talking about the high price of gasoline, and he told me that he had just invested some money in oil and gas stocks. One of the stocks he bought was Shell Canada, of which Royal Dutch Shell is the global parent.
He also told me that he was soon taking his entire family to Walt Disney World in Florida, driving a minivan with a camper attached to the back. He knew that with five people in the van and a camper trailer loaded with all their belongings, he would spend a small fortune on gasoline. Because of this, he decided to invest some money in an integrated energy producer before his trip. He still paid a lot of money for gas, but he felt a whole lot better doing so, knowing that he owned a small piece of the action.
In my view, this was a great move. At the very least, my dentist felt a whole lot better about his vacation costs. Not surprisingly, with the price of oil, natural gas, and gasoline so high these days, the big energy companies are flush with profits.
As I’ve mentioned before in this column, I don’t feel good about the stock market for the remainder of this decade. It’s a gut feeling, and I may be wrong… But, there isn’t much we can do as individuals when it comes to high energy prices. The old adage… if you can’t beat ’em, you might as well join ’em… applies in this case.
Even though the major integrated energy companies have already seen their stock prices do very well, I think they’re going to keep going up. In any event, I’d rather own some stock in a basket of energy companies than I would in any other market sector for the next few years.