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Rekenthaler Report

Energy Stocks--The Unknowns

Energy is tempting, but its prospects are oh-so-uncertain.

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The Lure Allures
A former college roommate urged me to look at energy stocks. While not a professional investor, he has the right mindset for the task, being analytic and contrarian. And, to judge from his upcoming retirement plans, which include a beach house on a fashionable island (those liberal arts majors make a killing), he has done a few things right with his portfolio. So, I am listening.

Consider the case of  Kinder Morgan (KMI). One of the few businesses in any industry to have a wide Morningstar Economic Moat Rating, KMI has lost more than half its value during the past year. What sold for $44 as recently as last spring can now be purchased for $18.

John Rekenthaler has a position in the following securities mentioned above: MMM, PGF, TEX. Find out about Morningstar’s editorial policies.