It feels like yesterday but it was over four years ago that I wrote, “It’s Time To Get Greedy In The Gold Market.” Gold was under $1,100 an ounce at the time and, for a number of reasons, it felt like there was the proverbial “blood in the streets” that marks a great time to buy.

As I wrote at the time, “It’s very easy to say, ‘be greedy when others are fearful,’ but it’s another thing entirely to actually do it.” And it was not easy to be a buyer of gold while it was so deeply out of favor but it has paid off since. The gold price recently hit $1,550 and the gold miners ETF (GDX) has doubled.

Looking at the energy sector today, I’m reminded in so many ways of this opportunity in gold. This looks to be the third losing year in a row for energy stocks, a pretty rare feat for any sector or asset class. And it comes after the back-to-back losing years of 2014 and 2015 (only 2016 kept it from being a six-year streak!). Gold had nearly gone four straight years of losses when it bottomed in 2015.

And, according to my friend, Meb Faber, it’s just this sort of persistently painful performance that typically sets up a terrific rebound.

Looking at the energy sector today I'm reminded of this @MebFaber post from a while back: https://t.co/5kl5KEMnAN pic.twitter.com/gxDz9NRUjg

— Jesse Felder (@jessefelder) December 10, 2019

The relative performance of energy has been so painful that it now makes up the smallest share of the S&P 500 in over two decades.

Ten years ago, energy accounted for about 15 percent of the S&P 500 index. Today, it makes up just 5 percent, having been mostly displaced by technology giants such as Facebook Inc. and Apple Inc. https://t.co/v4Ch6osY9K pic.twitter.com/zJFRNzK0wB

— Jesse Felder (@jessefelder) March 11, 2019

Investors have clearly become very fearful of this sector, consistently pulling tons of money out of the sector. 

'Fund flows have turned positive for the S&P 500 energy sector ETF (XLE) after staying negative for the majority of this year.' https://t.co/MmlR7HnEfL via @SoberLook pic.twitter.com/FgWsjnVkh6

— Jesse Felder (@jessefelder) December 9, 2019

But there are signs of hope. Typically, inversion of the yield curve, as we saw over the summer, is a good sign for the relative performance of the energy sector. 

'The energy sector has outperformed the S&P 500 80% of the time the yield curve inverts, beating the index by an average of 7.3%.' https://t.co/DuEEM5HmLK

— Jesse Felder (@jessefelder) August 16, 2019

And as my friend, Eric Cinnamond, points out, energy stocks have also become really cheap. 

'From a bottom-up valuation perspective, many energy stocks are trading at meaningful discounts to the replacement value of their net assets--levels we haven’t seen since 2008 and 2009.' https://t.co/54YEVBCDxq pic.twitter.com/ENXTl8pEwa

— Jesse Felder (@jessefelder) November 25, 2019

So cheap, in fact, that they now offer their highest yields in history which, as my friend Louis-Vincent Gave points out, should help to put a floor under the shares. 

'Energy stocks offer record high yields, which unless oil prices tank should help cushion any potential price downturn, which is more than bonds can now say.' https://t.co/lCaPnYlat2 pic.twitter.com/BOHKJjOd83

— Jesse Felder (@jessefelder) September 20, 2019

Finally, the smartest of the smart money appears to be circling the sector as they smell a rare opportunity. 

'Warren Buffett, Carl Icahn, Jerry Jones and Sam Zell are just a few of the bargain-hunters flocking to the energy industry — the worst-performing sector of 2019.' https://t.co/Iva7CjiyLX

— Jesse Felder (@jessefelder) December 10, 2019

To paraphrase what I wrote about gold four years ago, I’m fairly certain that energy stocks are now the most hated group in the markets. For that very reason, they are likely the most attractive opportunity an investor can find today.