"Everybody hates energy" — When Shark Tank investor Kevin O'Leary made a bold remark on the oil and gas industry

Kevin O'Leary, a prominent investor and star of Shark Tank, made a bold statement regarding the oil and gas sector, emphasizing his belief in its profitability despite common negative perceptions. During an interview on Fox Business dated February 26, 2023, O'Leary highlighted,

"I love energy [sector]. Everybody hates energy. If you didn't own energy in the last 18 months, you miss the market. Go where people hate it. Energy is the driving pivot."

The Shark Tank investor's statement suggested that contrary to the prevailing sentiment, Kevin O'Leary viewed the energy sector, particularly oil and gas, as a key driver of economic growth.

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Shark Tank Kevin O'Leary's outlook on the oil and gas industry: A look at the future of energy and the economy

The profitability of oil and gas

O'Leary’s comments centered around the strong financial performance of the oil and gas industry in recent years. The Shark Tank investor remarked,

"I do not hate oil and gas. The cash flow, the distributions and health care. Wow. That sector is looking golden right now."

According to O'Leary, the substantial cash flow generated by oil and gas companies makes them attractive investments, especially in contrast to sectors that have faced financial instability.

His belief in the profitability of this industry was not simply based on recent performance but on its ability to deliver reliable returns over time. Despite general negative sentiment towards fossil fuels, O'Leary highlighted that these companies continue to generate strong revenue streams, which offer substantial opportunities for investors.

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Optimism amid economic gridlock

In the same interview, O'Leary extended his optimism beyond the oil and gas sector, expressing a generally positive outlook on the US economy. The Shark Tank investor stated,

"I still am optimistic on the economy, this incredible economy. And the best part – and this is the secret sauce, the juice that really makes it work – total gridlock in Washington. No more spending bills, impossible to get any policy done. And the market loves that."

He explained that the lack of significant legislative action in Washington was a stabilizing force for the economy. O'Leary believed that this gridlock allowed businesses to focus on their operations without the disruption of constantly changing policies or new government spending.

This, in turn, provided a more predictable environment for investors, which he saw as a positive factor in the current economic climate.

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Post-pandemic shifts in business models

O'Leary also discussed a key shift in business models following the pandemic, which he believed contributed to stronger margins and improved financial performance for many companies.

"I'm optimistic for one reason, coming out of the pandemic, the entire S&P 500 went to a direct-to-consumer model. I don't care if you're Nike or anybody else. Margins went up pre-pandemic. Nike was at 9% of sales, direct consumer. Now they're over 30 on their way to 50, much higher margins," he explained.

This shift to a direct-to-consumer model has allowed businesses to bypass traditional distribution channels, improving profit margins and providing greater control over their sales and customer interactions.

The Shark Tank investor emphasized that this transformation, along with increased digital adoption, has been crucial for companies navigating the post-pandemic economy, and it highlighted a broader trend of operational efficiency and innovation in the market.

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Viewers can catch Shark Tank on ABC every Friday at 8 pm ET, with streaming access on Hulu.