The Rising Influence of Rising Affluence

[DewDiligence]

Jim Chanos thinks Big Oil stocks are a sucker bet:

http://blogs.barrons.com/stockstowatchtoday/2011/10/17/chanos-exxon-and-other-big-oil-names-are-value-traps

True, the cost of finding and developing a barrel of oil has gone up; however, the dirt-cheap valuations of Big Oil stocks already reflect their higher finding costs and, further, the valuations extrapolate the trend toward higher costs to a degree that is unwarranted, IMO. In other words, I do not find Chanos’ argument compelling.

Comments?