An Energy Powered Portfolio

One of the pillars of my investment portfolio is energy. Nothing is certain, but its hard to imagine any change in the course of our unstable economy that isn’t going to continue to demand energy.

Apart from gold and silver, and some land, energy is about the only place I feel any semblance of security at all. Gold and silver are a hedge against inevitable inflation, and a good bet on the future panic out of the dollar. But since I don’t know how long that will take I’m not one to keep all my eggs in one basket.

I like the extremes of buying:

  1. “Juniors.” Small explorers, looking for the next find. These little guys are very risky since most of them never get to market—which makes the ones that do very profitable.
  2. “Majors.” Exploration and production (E&P) companies. The majors are behemoth, multi-billion dollar companies. While they can certainly crash like anything else, they are not likely to be worthless (like the fate of the U.S. dollar).

The key is finding companies with solid balance sheets (enough cash to weather the storms) and a strategy in line with the changing world.

Marin Katusa, editor of the energy publications at Casey Research, is one of the best minds in the business. His monthly publication, The Colder War Letter (no longer active), is a steal at $80 for a year and is by far the best way to get started diversifying into major energy companies (I’m holding 3 of its 5 current recommendations). The archives go back more than four years to inception and are the cheapest education in the energy business you can find.

For a limited time, you can get this premium publication for only $49 a year. Find out more here: The Colder War Letter (no longer active).

Do you think energy will be more expensive in 10 years? How about 20?