Several years ago, one of the world’s most successful investors, Warren Buffet, sold billions of dollars worth, almost half of his ownership position, in a company called ConocoPhillips (COP).
At that time, COP was the largest exclusive exploration and production (E&P) in the world, even if not as widely talked about like companies like Royal Dutch Shell, BHP, or Exxon.
Did Buffet have a crystal ball? Did he sell because of fears of global warming? Did he worry about such as Greta Thunberg, Al Gore and Justin Trudeau, and even environment minister Steven Guilbeault? The eco-war on oilsands and energy? Was he scared away from the energy industry by moves to renewable energies, like wind and solar?
Not really. In fact, since that time about 10 years ago, Buffet has invested still more into energy. Billions in fact. It is too bad so much of that investment isn’t in Alberta.
Right now, energy, including Alberta companies, is a great investment. Worldwide, energy is the cheapest to buy sector in the Standard & Poor 500, an index of America’s largest companies. Next up in the sector list are financials, materials, healthcare and utilities. The only sector even remotely close to making as much money as energy is healthcare. Four times as costly and making only maybe 70 per cent as much money.
Canadians should be, and are, increasingly tired of the hectoring and lecturing from Trudeau about how we all must do our part to save the world. Meaning spend a fortune on wind and solar and give up on fossil fuels. That will show the world Canada is a real “leader” you betcha!
Which sadly ignores the fact Canada is one of the first or second lowest spenders in defence, as a share of GDP, in the NATO alliance. So much for leadership! Leadership, in other words, only when it suits Trudeau and his ilk. Otherwise folks, go pound sand.
It should not be surprising at all that Alberta Premier Danielle Smith is constantly raging against Trudeau. The treatment Canada’s largest industry gets at the hands of the Liberal Central Canadian cadre of clowns is abominable.
Cole Smead, chief executive of Smead Capital Management, says of today, “People are missing the economics that Buffet (is) looking at. The returns on capital in coal, oil and gas are off the charts compared with other sectors.”
Today, Buffet still has lots of shares in COP. After all, he only sold 41 per cent. And he kept his shares in ExxonMobil. Mostly because they made a better return on capital than COP.
Buffet is also buying more energy shares around the world. Tellingly, Buffet is not investing in Canada. Investment decisions of people like Buffet echo around the world.
Albertans are very proud of our industries, from forestry to energy to agriculture and more. Canada has a horrible, hypocritical prime minister ruling over a boondoggle of federal incompetency, supported by the unholy marriage with the NDP. Determined to put Alberta energy out of business.
Premier Smith raging? Not raging enough.
by Jeff Burgar