I have been wondering how long we could go in the new year without an event in Europe upsetting the apple cart. It looks like the decision to tax depositors for the bailout in Cyprus is the first such event of the year. The event itself is not important, but whether it has any further ramifications for the rest of Europe is.
My gut feeling is this will turn out to be a minor event. However, I believe it is the first of many bad tidings out of Europe this year. The Continent is in a continued contraction, and the situation in Greece, Portugal and Spain is close to or has exceeded the financial hardship last experienced in the Great Depression. In my own portfolio, I am underweight any sector or equity that gets a significant amount of revenue or profit from Europe. It is the key reason I do not have equity positions in Ford (F) and General Motors (GM), even though I am positive about their prospects in the U.S. and China.
On the bright side, maybe a selloff triggered by the latest news from Europe will provide buying opportunities for investors with cash on hand that have been waiting patiently for a pullback. As pessimistic as I am that Europe will contribute to growth in the near future, I could not be more positive on the prospects for continued expansion of U.S. domestic energy supplies. At current growth rates, the country will surpass Saudi Arabia before the end of the decade as the world's biggest oil producer. The U.S. already has the lowest natural gas prices in the developed industrial world. This is a tremendous cost advantage to manufacturers and other industries blessed with facilities close to these low-cost energy sources.
This article originally appeared on March 18, 2013, on RealMoney. To read more content like this + see inside Jim Cramer's $3 Million portfolio for FREE Click Here NOW.One company benefitting greatly from this secular change is chemical maker LyondellBasell Industries (LYB - Get Report). The company is based in Rotterdam, but gets most of its profit and revenue from North America. LYB is one of the top three producers of ethylene, polypropylene and polyethylene in the world. The company is rapidly increasing its exposure to North America, is wringing significant cost efficiencies from its operations and the stock is cheap on a valuation basis.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV