06Jul11:05 amEST

Do As the Old Man Says, Not As He Does

Shares of Dominion Energy (D) are actually getting hit quite hard this morning, down more than 7.5% as I write this, after Warren Buffett’s Berkshire Hathaway Energy agreed to buy Dominion's natural gas transmission and storage business in a, roughly, $10 billion deal. 

Amid a trading session of intense bull fervor, so far, be it more extreme strength in the likes of AMZN BABA (with many other China names squeezing intensely) and SQ, among many others, it may seem like Buffett reversed the previously-very cautious (for him) stance he had on markets, the economy, and the near-term uncertain nature of the world just two months back during the Berkshire Annual Meeting where he seemed resigned to reiterating his longstanding mantra of never betting against America over time, as though it were some type of ritual séance. 

However, you will note that energy names and especially most things related to natural gas is at multi-year depressed levels. Buffett and Munger may simply see long-term value in this corner of asset classes more than anything else, as opposed to "capitulating to Robinhood traders," a thesis which seems like one of the more absurd-yet-normalized signs of the times we are living in, that someone like Buffett would actually throw in the proverbial towel and flip bullish, as a general proposition. 

No, I doubt that is the case at all. But he does see long-term value in the natty complex, which compels me to take a long, hard look at Southwestern Energy, below on its daily chart.

The natty-related SWN is above a rising 200-day moving average and seems to have quietly weathered the energy/natty storm better than most peer since April. 

Weekend Overview and Analysi... Stock Market Recap 07/06/20 ...


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