The energy sector has been a train wreck for months, but one seasoned investor is finally seeing opportunities.
"I'm a roaring bull on energy. I'm back in," said David Kotok, chief investment officer at Cumberland Advisors.
Kotok sold Cumberland's energy holdings back when oil was trading above $100 a barrel and is just now adding positions.
"The entire basket of the companies was for sale below the replacement cost of their infrastructure. We know below replacement cost is an entry level in anything," said Kotok, who says the bull case for natural gas stocks is the impending exports of natural gas and oil from the U.S.
"I think oil and gas is an export growth industry for the United States for decades. It will be huge," said Kotok. "Think about it the following way. If you were an importer of liquefied natural gas anywhere in the world, would you like a contract with an American company, under American law, with American disclosures, buying a product that comes out of the ground in the United States?
"Or would you like to buy from the Middle East, Africa or Venezuela or some other place?"
Energy isn't Kotok's only bold investment. He also says U.S. investors should consider putting their money in Japanese stocks, now that the Bank of Japan has moved to negative interest rates.
"It's a gift to the investor," he said. "We are overweight Japan."
Kotok said Cumberland Advisors' total Japan weight is about 30%, and two-thirds of that exposure is currency hedged. It's Cumberland Advisors' largest holding ever in Japan. As a comparison, the iShares MSCI (ACWX) - Get Report benchmark index Japan weighting is just 17%.
Kotok said Japanese companies like Mitsubishi (MTU) and Toyota (TM) - Get Report are lean and mean, with strong balance sheets and dividend payouts. "I think Japan is a long pull successful story for investors in America who can buy a currency-hedged ETF and hold onto it," he said.