Energy Select Sector SPDR Fund (XLE)

30% of the names in this are at 52-week highs, but is not an overbought sector.

She's been bullish oil for years. These stocks have growth, dividends and extra distributions. Energy has a lot to offer. Stay long. 

Even if the Strait of Hormuz is completely reopened, the US has drawn down a lot of inventory while bumping up production. Pipelines will continue to do well. There's a lot to do in energy even if the Strait reopens. Oil is a definite buy.

Energy was upgraded today based on healthy earnings growth, reasonable valuations, geopolitical insulation and low correlation to AI infrastructure. There's risk to the price of oil.

You don't buy this for the future price of oil, but for what happened before the US-Iran war: how these companies reward the shareholder and grow production.

He predicts the price of oil to rise from now to the end of the year, to $70-80. We're underestimating how much inventories need to be refilled around the world. Also, it takes a while to transfer oil out of the gulf. Thirdly, countries will de-link from the Persian Gulf.

You can't be bullish energy, because more supply is coming from OPEC and the US. Supply is surging, while demand is far below. So, inventories are building.

Oil prices have shown a little life recently. This is a contrarian trade, but likes it full year. It's part of the cyclical trade and will rise in a relief rally when rotation happens again.

Trump wants to reduce energy price. Near-term, any resolution in the Russia-Ukraine war will put pressure and a ceiling on oil prices.

He sold his small position. Crude is down 7.5% the past month. For energy, you need to be in the fully integrated names. But it's too early to play energy--see how much China will stimulate demand.

Finally, the tide has turned in China (news of government stimulus this past week), so it's time to be exposed to China, which ahs been a terrible place to invest. It's a trade of at least 6 months.

The sector has been going nowhere. It needs a catalyst like an event in the Middle East to move shares up. Likes Diamondback and Exxon.

He owns a lot of energy stocks. This sector is performing a lot better year to date than the street gives it credit. Many energy companies like Exxon and Marathon are doing well. The second half of 2024 looks positive.