Eric Sprott's Sprott Energy Fund is buying oil equities as energy share losses are exceeding oil prices for the first time in 17 years.
In Canada, where stocks get more value from producers of fuels and minerals than any other major developed market, losses in energy shares are exceeding oil prices for the first time in 17 years.
“It has everything to do with fear and little to do with actual fundamentals,” Sprott Inc.’s Eric Nuttall, whose Sprott Energy Fund is up 16 percent this month, said of oil stocks. “When people are in a fear-driven mode, fundamentals can be irrelevant in the short term. Eventually, the stock market will always be fundamentals-driven.”
Speculation that economic concerns have sent prices down too far spurred Nuttall, who oversees the C$116 million ($115 million) fund for billionaire Eric Sprott’s firm, to buy shares in Calgary-based Painted Pony Petroleum Ltd. (PPY/A) and Trican Well Service Ltd. (TCW) ING Investment Management’s Paul Zemsky says he’s waiting for a solution to Europe’s credit crisis and signs that China has stopped trying to curb inflation before buying.