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Caprock Risk Management President Chris Jarvis on how investors can boost their portfolio by investing in the energy sector.
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Closing at a seven month low today in fact for the month worst month we've seen in three years but we've got somebody who says.
The sky's not falling there are ways to make money on this strong -- Chris Jarvis president of Capra risk management.
At so he walks -- -- -- out why don't we want to doesn't think the Fed the sky is falling here and I'm glad that you say that because there's always the trade isn't there.
Absolutely I -- clearly there's a lot of concern in Europe right now.
And -- all the -- there really hands on what's going on in the European elections as Greece gonna stay in the Euro what's the situation in the banks.
There's clearly common June 17 we have elections in Greece recent poll of 31%.
Of the -- -- favored the Euro.
We get some clearly there we think received some firm footing with the Euro -- to stop the bleeding in the commodities in the and that that -- you know equity markets and should lead.
-- -- -- -- Specifically for oil -- look at 8739.
In the regular session we closed at about 8857 so it's only gotten worse since the bell rang so I guess the question becomes.
For all those people who thought oil -- a hundred dollars a barrel over the summer they got squeezed.
How can you teach people to be smarter about getting caught flat -- Well I mean that if you look at the seasonality usually you see oil run up until July time for -- which is a driving season.
And then it starts a falloff in the fall well last year we see just the opposite we actually had oil prices coming down deep in the summer.
Basically on the same headlines I think we're in the same situation here I think -- -- summer rings out -- runs out some of this news out of Europe.
Propriety of some terrible terrible news which -- bode well for -- for crude oil prices so with that said a lot of these stocks have already overly discounted think fruit is off quite a bit.
-- equities are off even more I can take a look at Apache for -- -- trading at a forward multiple of six times earnings that's quite a value right now.
We're before any stocks -- -- ten or twelve times in other multiple.
We'll see you like Apache -- elect a company called EEO -- but you also like to it was sort of more.
Less and less risky names such as ExxonMobil and -- from -- You're saying if you add one -- all of these to your portfolio you still stand a chance of making some good money here.
I think this a good -- -- -- 88 dollars is a lot of support this 8780 dollar level.
In the next few weeks we could -- -- go you know drop down to -- 84 that would be the major uptrend line from the 2009 rally from 33 up to 115.
And I think he's there to look in -- spots and a charge -- thousand investor.
I'd be looking to pick up these stocks -- ExxonMobil and Chevron there'll paying dividends two and a half percent three and a half percent so you got some downside risk god in case you know.
Sentiment continues to be negative but if oil does turn these -- going to be the first place that a lot of these bigger investors gonna go into for a flock to quality trade.
Well well sure and and it's down -- -- for example down 3% year over year and you've got ExxonMobil.
To this again not a not a shocking choice here but when you go to the apaches in the DOT's of the world.
There might be a little more risk -- Certainly an opportunity to take on perhaps more reward down.
Yeah this is certainly a beta -- this year if you're really nervous about the market they trying to reallocate a little bit your portfolio Chevron and next time be a perfect way to do that.
If you wanna get a little bit up on the veto as far as my CD I do you know for moving energy if you're looking for with a mark sure.
And EO Jean Apache being great way to the puts money into.
Chris last question what's your prediction for oil prices and sort of as an -- -- A little sub question gasoline will it follows precipitously as oil -- Well well but it -- time as you know gasoline price dollars go -- and they take a -- -- -- -- now.
-- I think oil I think oil's gonna hold this 84 worst case scenario level.
I do believe once we get clarity and 217 that agrees people have a sigh relief.
The worst case -- not taken off the table and that case and -- -- here were due for relief rally.
And then just be kind of certain ability in the energy -- -- be careful one positive headline folks and we could see a big decent rally here Chris good to see you thank you Chris Jarvis of.
