The Forager International Fund had a difficult year in 2014. We managed to make money, but we made a lot less than the index. Partly that was a result of holding a lot of cash in a raging bull market (mostly in the US). Being under-represented at the large blue-chip end of the market also hurt. But far and away the biggest impact on our portfolio was the precipitous decline in the oil price during the second half of the year. Our three oil services stocks halved along with the oil price.
We’ll come to why that has created an opportunity in a moment. First it’s worth understanding how the oil price can fall so far.