Those of us lucky enough to live in areas of the country where entire bodies of water freeze over during the winter have the opportunity to fish while standing on the ice, looking down at our elusive prey. Ice fishing is an experience unlike any other that, depending on the water’s clarity, can be described as fishing in a fish tank.
Some areas in the U.S., like the Midwest, take this sport to eyebrow-raising levels.Some folks, not to incriminate anyone in specific, buy or build elaborate “shanties” filled with every amenity you would find in a high-end camper. They then place these shanties on the ice for the entire winter, hoping to catch some fish and maybe even some friendship.This activity also provides time to think about things such as energy markets, which can be very similar to ice fishing, believe it or not.
During the Christmas break, my son and I were able to head out to test out his first ice-fishing pole, which was left for him underneath the Christmas tree. As we were sitting on the ice fishing, we were listening to the ice moan from cracking, re-freezing and the occasional F-150 drive-by.
As we waited for the fish, any fish, to bite, I started to think about the similarities between ice fishing and energy markets.The cracking you hear can be troubling considering you are on the ice in a house with one exit. You have to trust that your years of experience of being on the ice means you picked a spot that will hold your shanty (or your truck) without breaking. Inevitability, there are those who push the limit and get out on the ice early. Instead of fishing for walleye, they end up fishing either themselves or their vehicle out of the water.
Testing the ice’s weight holding capacity can be done through charts and guidelines. However, if you want to get to the best spot on the lake you sometimes need to take risks and head out early. While guidelines and charts can tell you what ice thickness is needed to support certain weights, the ice, like markets, can be very unpredictable. While ice in one spot may be able to support your weight, a vehicle, or an ice shanty, 20 feet away there may be a thin ice layer or even open water. And if the temperature is warmer than expected for a couple days, that spot you chose may suddenly become dangerous territory.
That’s the life lesson to take with shifting energy markets. One cannot ignore how our pocketbooks are a little heavier recently with the reduced gasoline prices. But it’s also difficult to ignore last minute governmental policies and extensions meant to prop up the renewables market. You need to be nimble, ready to shift your assets, and think ahead to what the market “weather” may be, as well as take risks to get in markets early and take advantage of prime real estate.
Looking forward into 2015 it will be very interesting to see how are markets develop and crack. Even more interesting will be to see who falls through the ice and who’s able to keep their pants dry.