As a Texan, I am curious to know what your take on investing in domestic oil companies is. I know that Jim Rogers is invested in petroleum in his commodities fund in a very major way... but does that mean domestic oil a well?
With the increases in the price per barrel of oil, doesn't that make it so that Texas and other oil states will start to experience some of the same prosperity as they did back in the 70's and early 80's? If this were so, wouldn't that prop up the economy of Texas somewhat to the point where Texas will be "the place to be" for the next decade or so?
I live in Colorado and the western part of our state has several towns like Craig and Rangely that were once booms towns back in the high-priced oil days. Do you think that more glory days will return to towns like these with rising oil prices?
I am bullish on the energy sector. The stocks are generally very reasonably priced with relative low p/e's and, as far as I can tell, many of the companies can do very well with oil prices anything above $32. I think the future looks bright for the sector.
The Texas economy may do better than other states on a relative basis if energy does well. But I don't think you will see a return to the glory days of the late 70's and early 80's. Texas is much more diversified in industries other than energy than it was then. So the state does not suffer as much when energy does poorly. Also, it doesn't do as well as it used to when energy does well.
I really think the national economy is in for some very hard times from an economic perspective. I think that will supercede any benefit that may arise from energy. The debt situation is terrible (consumer, business, and government). And I don't think either political party will have the political will to do anything about it. It may be too late even if they did.