Wake Me Up When Tomorrow Comes

In another long line of relative valuation metrics, the market capitalization of Apple Corp. has surpassed the entire market capitalization of the domestic energy industry, including behemoths Exxon and Chevron.  The disconnect between the two reminds us of the late 90’s when tech was the only game in town and old school firms, which coincidentally provided the power for said technology, was said to be headed for the trash heap.Todays relative valuation gulf is driven primarily by a belief that the de-carbonization of the global economy is already at hand. Armed with an ESG checklist and a media bias that already has written the obituary for the carbon economy, todays stewards of investment capital are institutionally hamstrung when it comes to pursuing opportunities in the energy sector. The graph above is indicative of the institutional penalty box in which energy finds itself today.  However, investment opportunities are most attractive when a large selection of the investment community finds them most “un-investable”.