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.
“I’m done with fossil fuels. They’re done,” @MadMoneyOnCNBC‘s @JimCramer says after oil giants Exxon Mobil and Chevron reported Q4 earnings this morning. “We’re in the death knell phase.” https://t.co/rdcmoeRGMB pic.twitter.com/yl8iP7hpMi
— CNBC (@CNBC) January 31, 2020
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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