Herb Zerden: Energy Industry Shake Up

Jan. 23, 2015 12:26 AM ET
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Growth, Contrarian, ETF investing

Contributor Since 2012

Craig Brockie is a contrarian investment advisor in Beverly Hills, who provides wealth management services to high net worth clients. He prefers to bill his clients solely based on performance, getting paid only for results.

With crude oil prices plummeting over 50% in less than a year, there is a lot of attention on the energy sector. The industry is experiencing a major shake up with many companies no longer viable and energy investments moving from weak to strong hands.

While not directly involved with oil, Herb Zerden is definitely an insider in the energy industry. Zerden, is Chief Financial Officer and co-founder and AGR Group.

AGR is recognized as a leader in energy telemarketing, consultation, and retail, with licensing in 25 states across the US. More than 1,200 employees serve at company field offices and call centers in Florida, California and Nevada. As CFO, he manages regulatory compliance, accounts payable and receivable, data accuracy, and account reconciliation.

With his finger on the pulse of electricity pricing and sales, Zerden has a different perspective than most on how energy price trends are affecting society.

Most Americans see cheap oil prices one of two ways. The vast majority of consumers welcome lower fuel prices and are happy gas is much lower at the pump. Those involved in the oil industry as investors or workers are shocked. A long-time profitable industry has been slashed and burned much like the gold mining sector experienced in 2013.

A seasoned investor ignores the day-to-day media noise and recognizes the cyclical nature of markets. What goes up must come down. Fortunately, the flip side of the coin also holds true. After peaking at $147 a barrel in 2008, oil plummeted to $35 just a few months later. Last year it was selling again for well over $100/barrel and now we're back near $45.

What does the future hold for energy prices? No one can be 100% certain, but it is logical to expect the current shake up in the energy sector to stabilize and prices to increase over the long term. With governments worldwide printing currency like it's going out of style and a fractional-reserve banking system that invents "money" (more accurately described as credit) out of thin air, one thing is certain. Even if we do experience a period of deflation, there is no escaping the inflationary consequences.

Herb Zerden knows the numbers behind energy sales and knows the demand for energy will always exist. The sun will rise again tomorrow and there's no end in sight for the consumption of energy by billions of people worldwide.

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