Energy Prospectus

@ 5:47 Min:

Interviewer: One broad area you have recently said might be interesting is Energy. And it's very unloved on Wall Street right now. What are you seeing there?

Lynch: The difference between a glut right now and a shortage is somewhere around 1 MMBD. The world consumes 100 MMBD. +/- 1 MMBD each way. So, if the economy stays OK, and these shale wells do 1000 BPD the first month... in a year later they are at 300 BPD, then they're at 150 BPD. It's a real treadmill. And right now there's no private equity. There are no IPO's. There's no bond market. The banks want out. Shale is going to slow down. So these people that think shale will keep growing 2-3 MMBD... We've gone from 5 MMBD in the US producing to 12 MMBD. People think that will continue. I don't believe it will.

https://video.foxbusiness.com/v/6117461 ... show-clips

Peter Lynch picks energy
Dec. 23, 2019 8:52 AM ET|About: Energy Select Sector SPD... (XLE)|By: Stephen Alpher, SA News Editor
"You wouldn't know it from the stocks, but oil is 25% higher than a year ago," Peter Lynch tells Barron's.

While Lynch believes renewable energy sources may be the long-term future, he reminds that natural gas and oil will be a necessary bridge to this. "Everybody’s assuming the world’s going to not use oil for the next 20 years, or next year. I’m buying companies that I don’t think will go bankrupt."

As for names, Lynch didn't name any, but he thinks small-cap oil and natural gas players will be three-baggers.
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I doubt that any of the "gassers" will be "three-baggers", but most of the companies in our Small-Cap Growth Portfolio are definitely trading a deep discounts to net asset value.