I recently ran an analysis on the 10 largest cap global oil and gas companies. On April 16, 2015, their market cap was $1.788 trillion. On Sept 17, 2015, their market cap was $1.252 trillion, down 30%. The list included Petrochina, Exxon, Chevron, Shell, Sinopec, BP, Total, Kinder Morgan, ConocoPhillips and CNOOC. On September 17, 2015, Google, Apple and Amazon's market cap was $1.338 trillion.
The last time that I looked at the market cap of resources companies compared to tech companies was about March 2002. The sum of the market cap of all the global, publicly-traded basic material companies and metals and mining companies was less than Microsoft's market cap. That occurred about 6 months ahead of the bottom, which was October 2002. Three months ahead of bottom, Julian Robertson's, one of the best natural resource investors of all time, shut down his resource hedge fund, because he "didn't get the tech stocks".
Well here we are again. And every time is different. In the last cycle, the number of natural resource engineers, geologists, technicians and skilled electricians, plumbers and welders declined significantly. The average age of those professionals in 2006, was mid 50s. This down turn will definitely set back the ability to employ newly minted engineers, geologists, etc. and the average age is clearly high 50s to mid 60s. Newly minted professionals did enter the market over the last 10 years, but the lay offs have been massive and they are likely to permanently leave the sector.
