Fracking: From breaking shale to breaking even
Fracking has been groundbreaking for the US and the world
(AP)
Jinjoo Lee
, The Wall Street Journal
Understanding the mechanics and economics of fracking can help investors understand the dizzyingly cyclical nature of energy markets
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Everyone seems to have an opinion about fracking. The revolutionary and controversial oil-and-gas exploration technique has raised the ire of oil sheikhs, investors and environmentalists while minting billionaires and wiping out tens of billions of dollars fronted by many of their lenders and investors.
But what exactly is it?
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By Steve Goldstein
francois lo presti/Agence France-Presse/Getty Images
Since Pfizer first announced that its COVID-19 vaccine was effective, there has been a clear shift in financial markets toward the sectors hardest hit by the pandemic, and away from the technology titans that have thrived in the stay-at-home environment.
Scott Opsal, director of equities for Leuthold Weeden Capital Management in Minneapolis, says value, small-caps and emerging markets share similar characteristics as anti-large growth rotation plays.
“a) Each is pro-cyclical, benefiting from an upswing in business activity, b) Each tend to perform better during periods of widespread earnings growth, c) Each has a lower exposure to secular growers and is less populated by companies known for strong profitability and high quality, d) Each is priced at a substantial discount to [large-company growth] today.”