Energy is one of our favorite sectors with the U.S. economy in Quad 3 (growth slowing and inflation rising).
In the clip above, Hedgeye CEO Keith McCullough and Energy analyst Alec Richards discuss the trepidation of many investors to get excited about the sector.
As McCullough explains, a combination of low returns and episodic crashes in the price of oil are two things keeping many investors away, despite what we see as a favorable setup.
“It was the worst-performing sector during Quad 4 in Q4 ,” McCullough says.
“Energy got pancaked and you can see that recency bias that people have – you have a fundamental belief that something that recently happened to you can continue to happen.”
Watch the full clip above for more and for two of our favorite energy stock ideas.