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January 31, 2020 | Cramer: ‘Fossil Fuels are Tobacco’

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

Jim Cramer’s comments on CNBC this morning are a mainstream acknowledgement of a secular shift which we have noted for some time now.  The investment ‘belief’ phase in fossil fuel companies has turned.

As noted by IEEFA analysts last year, the sector valuation has fallen significantly from 29% in 1980 to just 5% of the S&P 500 market cap today, so it is not that difficult for US-focused money managers and fiduciaries to reallocate 5% of their investment portfolio compared with when it was 29%.

Unfortunately, this is not the case for Canadian-based funds and managers, since the oil and gas sector remains more than 16% of the TSX composite weight today, and international divestment flows represent concentrated selling pressure for the overall Canadian stock market.

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January 31st, 2020

Posted In: Juggling Dynamite

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