Energy Sector Predictions

[6:02] Stocks may retreat another 10 15% but they're already shape cheap trading under three times cash flow and we would recommend investors take advantage of the next uh the the correction that we see uh unfolding in the next week or two.

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[8:15] I would rather be long energy than be short the equity market. I think it's an easier call.

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[4:53] I have a feeling that even if oil itself carves out a bottom here, that won't stop the stocks from going lower on the narrative. And the narrative right now is there's people talking about an oil glut... So, um I think there's potential for oil to go lower and even if it doesn't, I think there's potential for the stocks to keep going lower as we speak.

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[17:22] I think right now that the oil quote and the oil stocks are in freefall and the oil market is a better market than any other natural resource stock. So if I looked at what I'm likely to allocate to the most over the next six months, it's likely to be the oil and gas business.

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[33:50] I I'm still very bullish energy and I think this is a tremendous buying opportunity right here. Um, so I'm probably going to add to my exposure.

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[17:01] I think um what's really cheap is the shares of the companies that produce it. So, I think that's the best way to play it because Look, let's go back to the last peak of the oil or energy boom, which was in 1980. And in 1980 about 20% of the S&P was oil and gas and energy generally, 20%. Today, as we speak, it's 4%. So, uh people don't I mean, the market is just not interested in oil and gas stocks. And as a kind of uh the Catholics would say an outward sign of inward grace is the dividends that they're yielding. I mean, some oil and gas stocks are yielding 10% or more in current dividends, and they're safe dividends. And if uh if I'm right about oil and gas themselves trending higher over the short term, forget about the long-term of history, those dividends are going to go up.

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[4:55] the bullish outlook for them is almost baked in the cake at the moment. You've got um, everyone's going to try and derisk the straight now, the straight moving forward. So, they're going to um their back their order books are going to continue to fill that way

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[26:59] I'd be surprised if we didn't see more disorderly sort of energy prices moving forward to me. It yeah, looks very tight moving forward.

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[21:36] we're already seeing major producers allocating the available uh supplies of these products and that's why I think we're going to see higher prices in the fall.

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[30:35] Think of what they just did. They just handed a huge fat check to US natural gas and oil producers and Canadian natural gas and oil oil producers... Say you're a natural gas buyer in some part of the world. You were buying from the Middle East. Now you've been wounded... So now they want safe jurisdictional risk. That's where the termines come in. That's where the anteros in the United States AR the range resources... that to me is the best AI play out there and it's a play on the war.

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[26:59] the companies have dropped crazily. They're back to like January levels. That's why I like the companies better than the oil right now.

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[0:16] I think we're five years into a 15-year bull cycle for energy.

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[32:07] the energy sector in particular um still looks very very attractive um to me from from that standpoint and it's one of the areas at 3% of the S&P 500 right now that I think if investors are looking to kind of hedge an AI collapse apps energy uh is is is probably a terrific place to do that... energy has been uh you know one of the best places to be invested over the last 5 years and probably will over the next five.

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[8:26] I think oil stocks are still uh uh uh uh undervalued and a good investment opportunity here.

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[22:45] Well, they're very undervalued compared to 90. The market is pricing him at 70 and and President Trump still has dreams of 60. So, so uh uh we ran numbers 6 8 weeks ago and just said okay if a year from now what's if at the price of oil what would the free cash flow be for Apache or what would the free cash flow be for Oxy or what would the free cash flow be for Senovas etc and the the numbers are really outstanding and it it means there's really good value in the stocks here even though they've run up at $70 $20 a barrel.

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[24:01] the next thing you're going to start seeing the consolidation in the industry right there. We own Apache and Oxy and we don't understand. We We're glad they haven't been bought out yet, but we don't understand why some of the big people aren't buying them because you've got to make sure you've got all the oil you're going to need to provide for the next 10 to 20 years.

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[23:54] energy is just not in favor. It's it's just like it's like this crisis isn't happening. These things are priced like they were, you know, for the most part over the last few years when it was when energy we had really no really no catalyst. So that's why I think there's such great opportunity.

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[16:11] Energy infrastructure's got to be the single biggest theme around AI. There's a quadrillion dollars being spent in AI, but you know what? You got to plug it in. And so anything that affects the plugging it in, you might want to be long. You know, so it's the copper that comes. It's the uranium that's has the small nuclear reactors that people need next to these things.

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[38:09] energy stocks to my mind look pretty attractive right now. Uh resource stocks, gold miners probably a decent area to be in.

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[23:01] if you look at the uh that XLE the energy the energy sector the S&P 500 um it's still trading around 57 bucks and is really nicely up on the year. Um I think you could see some pressure down to 50 bucks and we get down there I'm going to be um really looking at at what energy stocks to buy.

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[23:12] I think you could see some pressure down to 50 bucks and we get down there I'm going to be um really looking at at what energy stocks to buy.

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[12:41] we really feel like that when people finally pick up on it, it will be like gold and silver were last year. You know, how they, you know, see how they picked up the last four or five months of the year. We think they'll do be similar in energy because they don't own it.

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[18:10] We are likely to see energy melting up and then melting down very very quickly

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[12:42] regardless what the energy price does, we're going to have to drill for a lot more oil. Drill, baby, drill. And, you know, per growth in the Perian has plateaued... I think the service companies look terrific. Uh we've been in the OIH. Um I think land drillers in particular in particular look look very good right now.

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[6:59] I'm leading heavily into oil field services, especially onshore drilling and related services in the US and Canada, where we're seeing the start of a boom... And those services stocks are very cheap, and there's a lot of upside

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[7:46] I'm actually both I'm I'm I'm I'm long the energy trade because of the longer the disruptions go on, the more of a fuse, you know, inventory draw downs and all that jazz. I I tend to take that view that that longer pinch point is coming. So, we're long more energy than we normally would be.

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[35:25] and energy I think has clearly more uh leeway to go up because oil prices are going to increase further. So I think they are going to do well.

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[5:28] the destruction of productive capacity in the Gulf both in terms of the Qatari liqufied natural gas infrastructure and the Iranian infrastructure on Car Island uh will take as much as 5 years to fix.

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[17:45] one of the things that I just learned and I didn't really understand until I spent some time researching some from some shipping experts is that even if you get this thing going tomorrow a month of no shipments takes many months to clear out the system and fix it up. So, we're going to have high energy prices for 3 to 6 months regardless no matter what happens.

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[10:23] the ability for oil to globally to come down is going to be very sticky because of all of the damage that Iran has caused across the entire ecosystem and the the and the and the supply chains of energy. So in other words really sticky inflation

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[16:18] industrials, materials, and energy, those those three groups in in the 1968 to81 period, they were like 50% of the S&P's composition. 50-0. In recent years, they got to like 10, maybe even a little bit lower, 9%. Only 9% of the S&P was in industrials, energy, and materials. And now that's maybe up toward 13. Are we going back to 50? No, but we're going back to like 2025

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[9:20] yeah, I think it has more to go. I mean, it's like it hasn't ever gotten the level. Like, for example, uh when when the when the min gold miners hit such highs, we basically cut those in half uh right at the end of the year, beginning of January 2nd, 3rd, and 4th. And we did the same thing with silver. Same. We owned Heckla. We cut that in half on the silver miners because it it tripled in a year. And so, it was a thing to do. Well, all those have come back now, you know, and you have a lot of retail in those stocks. In energy, you don't have as much retail. They're not chasing those things. Uh, it's more of a steady climb where people are starting to realize that, hey, you know, we're we're going to need we're going to need this and it's going to no matter what, it's going to be a while before they get this thing resolved in terms of getting back to normal. Uh, it may never go back to normal for quite a while. So, I think you have to stay with energy in here for the time being.

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[26:44] We think the energy markets will probably split in two um with a western hemisphere and an Asian hemisphere.

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[5:34] energy is unlikely to be cheap going forward. That's going to likely also have a a shift on inflation.

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[35:16] Because historically always does and I think I like to bet on history and when I see the price of derivatives like call options are not Yeah. you know, reflecting the the the possibility of that happening because as you can see, it's it's actually quite explosive what we tend to see.

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[23:19] I'm very bullish on energy right now and agricultural commodities. I think they're going to move. I think gold and silver are just leading the way.

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[29:56] I think they're all going higher. They're all really cheap right now, incidentally. They're really cheap.

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[13:44] I generally think that you know with with US shale oil no longer really growing at the pace that the market's become accustomed to uh and then and as we potentially get those Fed cuts maybe maybe next year for example. Um I do think we could see higher energy prices.

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[24:20] Oh, I think that, you know, for the end of the year, for the next 6 months, I think that all the safe plays are going to be probably the play to go with. It's going to be energy, it's going to be gold

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[3:32] Well, I think on the equity side, it's clear that the the play is the energy sector. So, I put out that post also yesterday. It's like we could see if this really gets to be bad, a repeat of 2022 where you had uh energy really diverge in terms of those stocks relative to the rest of the market. Energy I'm bullish on independent of the near- term because part of my deregulation thesis which factors into the FMKT free markets ETF is that deregulation benefits energy anyway particularly uranium names which are getting some good traction as we're speaking

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[24:35] I tilt slightly bullish on this argument

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