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Starting tomorrow, we will resume our regular market updates.
But today is the last day of a 3-day weekend. So let’s take a short break to take another hard look at how you can benefit from the big drop in oil prices.
I don’t care too much if crude oil has reached a bottom already or not.
It also doesn’t matter if, after the bottom, crude oil recovers moderately or sharply.
As we’ve been telling you here consistently, almost every time oil prices fall, the overall market and key sectors flourish.
Indeed, with our previous studies, we showed you …
- Oil-price plunges are bullish: In the past 25 years, with few exceptions, when oil prices plunged, stocks rose — during the oil price decline, immediately after, or both.
- During the oil-price declines: In the last two bull markets, two of the stock sectors that gave investors the best (and most consistent) performance were health care (up an average of 60.4%) and technology (up an average of 64.0%).
- After oil prices bottomed: Also in the last two bull markets, 12 months after oil prices hit rock bottom, the best performers were technology (+35.1% in addition to the 64% rise they enjoyed during the oil-price decline) and consumer discretionary (+24.2%).
- Now: During the current oil-price decline, technology and consumer discretionary have also been among the top performers.
Plus, here’s the next phase of our study which drills down even further and double-validates our conclusions.
New study:
Within the Technology and Consumer Sectors
Which Industry SUBSECTORS Rise the
Most After a Major Oil-Price Decline?
Our answers in a nutshell …
Answer #1. In the last two bull markets (1990-92 and 1996-98), the best performers during the oil-price declines were …
| Technology: | |
| Software |
+77.5%
|
| Hardware |
+60.5%
|
| Consumer discretionary: | |
| Retailing |
+72.0%
|
| Media |
+55.7%
|
Answer #2. Twelve months after oil prices bottomed, the best performers (again, in addition to their gains during the oil-price decline) were …
| Technology: | |
| Software |
+49.9%
|
| Semiconductors |
+47.5%
|
| Consumer discretionary: | |
| Retailing |
+35.7%
|
| Services |
+21.0%
|
Answer #3. In 2009, twelve months after oil prices bottomed, the best performers within these two major sectors were …
| Technology: | |
| Software |
+51.3%
|
| Hardware |
+51.1%
|
| Consumer discretionary: | |
| Autos |
+191.5%
|
| Durables |
+55.7%
|
| Retailing |
+52.9%
|
Overall conclusion: Except during sweeping global market declines like 2008, oil-price crashes provide major profit opportunities both during and after, with two subsectors standing out as the most consistent winners: Software and retailing.
Good luck and God bless!
Martin
Dr. Weiss founded Weiss Research in 1971 and has dedicated his entire career to helping millions of average investors find truly safe havens and investments. He is Chairman of the Weiss Group, which includes Weiss Research and Weiss Ratings, the nation’s leading independent rating agency accepting no fees from rated companies. His last three books have all been New York Times Bestsellers and his most recent title is The Ultimate Money Guide for Bubbles, Busts, Recession and Depression.
{ 11 comments }
Please adjust your records to change my e-mail to stigwhansen@gmail.com
Why doesn’t Martin tell us the Best Software funds/Stocks to Invest in, if he is interested in our Family’s financial survival as he has said numerous times.?
That’s only giving us [half] the message to tell us which sector does best without telling us the best stock or fund to invest in; since he has that data at his fingertips.
I think it was Og Mandnio who said; “Help other people get what they want & you will have everything you want”
In other words, help us to make some profits (to help our familoies) & we will then be glad to invest more in his publications & services, once they are proven to make profits.
thanks, Josh Holliday
Martin, thank you for this article. Informative and to the point. That is exactly what I want. Too many financial reports are way to long and contain way to many stories of how some grandmother made lots of money and someone else made money etc., etc, adnosium. For me, 10 minutes for a read or maybe 15 for a video. Short and to the point.
Harry Dent calls for a market crash to 3500 beginning in mid 2014 and ending in 2020 or 2022. What are your thoughts?
Harry’s crash call (Bloody Wednesday) was for January 28. He now has moved this date out to April 29…with no comments for his rationale. This is surprising and many investors reading his messages are wondering “why” ? I think Harry should know that. barring any rationale for this change, his “administrative silence” could eventually damage his credibility. Let’s hope that he will read these comments and take corrective action.
Do not have a comment but a question. When is it expected that the price oil will have a turnaround? I have a number of oil stocks such as SGY, TBE and, worst of all, an ETF (HOU) that have taken massive hits. You may contact me via e-mail or call me at 403-295-1109. Thanks very much. Phil. P.
This is a great snapshot of history. Do you expect history to repeat itself in today’s market? Thanks.
Kraig Cummings
my philosophy about the market has always been buy for the long term and do not sell because the market falls. I have been invested for the past 30 years and have been successful enough to be able to pay all my bills & taxes. I recommend to all who come to me
for advice to do the same as I have done. My wife and I are financially secure and depend on none of our children or grandchildren for help which was always my goal.
What happened to Brazilian stocks? A couple of years ago they were your favorites.
I recall that the dramatic increase in automobiles following the post-2009 event was artificially created by US ARRA stimulus program that also aimed to increase the average mpg for cars in the US. So, I agree with Martin that one can surely can be discounted as not a normal market response.
Harry thinks the sky is falling