Comment by Fade_Dance

Normally I would say stock picking is a fool's errand, but in this specific example, the appeal really is in the dramatic shift in management in some (but not all) of the energy sector post 2020. For a long time, all of the money went to holes in the ground. They also raised massive amount of debt, which again, went to holes in the ground. Now it's in vogue to focus on shareholder returns, which may seem "normal" for US corporations, but these guys and gals loved drilling holes with reckless abandon.

To do it the easy way, maybe a quant factor overlay with Quality factor? I'm sure there are ETFs doing that for low fees. But the juice is really from the smaller and midsized companies which still trade at a discount because of the expectation that geopolitical risks and lower oil prices will cause havoc in the sector, and then you drill into the earnings call and the CEO is going "we've frozen over half of our planned investment, have redirected some of the cash to increase efficiency of older sites to boost efficiency at the expense of growth, and all cashflow is being split between paying down debt and buybacks."

Suddenly the outlook becomes considerably brighter. I just have a small basket that passed all of the screens, and check in every earning's call to make sure they aren't drilling too many holes or doing obscene M&A from boredom. It's a complex industry, but it's also a simple one. Mostly comes down to drilling holes...