Monday, January 30, 2006

WIC's up?

Last week, a reporter asked me how things were going with the W-Industrial Complex (WIC) index. It’s up 175% in the last five years, that’s how! And with Exxon’s announcement of record quarterly profits, all’s well with the WIC.

The
WIC tracks stocks in the energy, defense, and selected media and high-end retailing industries. I began thinking about it in May 2001 as I tried to imagine the stock market impact of an oil man in the White House.

Since January 19, 2001 (inauguration day) the top three performers in this index are:

  • Valero (VLO) + 649%
  • Arch Coal (ACI) + 502%
  • Peabody Energy (BTU) + 436%

The most interesting trend since the last time I checked the WIC in September 2005, is that oil services stocks have skyrocketed. To wit, since then

  • Schlumberger (SLB) + 57%
  • Halliburton (HAL) + 46%
  • Baker Hughes (BHI) + 33%

This suggests that companies like Exxon are beginning to believe that energy prices will continue to rise – thus justifying the risk of exploring for more.

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