The S&P 500 Index turned in a tremendous performance for 2019, finishing up 28.9%. However, you may recall the market suffered a nearly 20% decline late in 2018 that culminated around Christmas. From the market highs prior to the big sell-off, the S&P 500 gain has been more pedestrian at around 10%. More recently, the stock market surged relentlessly over the past quarter, triggered by the resumption of asset purchases by the Federal Reserve. The Fed has undertaken several rounds of asset purchases since the housing crisis, but this time it’s unique in its application and reasoning. Regardless of these swings in investor emotions, value investors must constantly compare perceptions (stock valuations) to reality (ongoing earnings potential). For most of the market, attractive opportunities are limited because earnings and profit margins are at record highs while investors expect good times to last indefinitely. In contrast, one industry has become deeply out of favor after burning through investor capital over the past decade. The energy industry engaged in irrational and destructive practices during the “shale revolution”, but we believe this period is ending and a select number of stocks should benefit.