3:10 All-Hail! @SHOPGod2 in the mood for oil, but not the stuff dripping from a bucket of extra-crispy.
4:50 Using options. @DSteinmoeller is long #COM stocks and short Cathie Wood. CVE, MEG, ARX. Dave keeps fewer than 10% in options.
VET $30 DEC 16 options have basically doubled in the past several days. CVE $30 DEC/JAN 23 calls are ~$0.40-0.50 USD
8:10 Dave on being right about the call, but not having the timing right. "Casino payoffs, but be cautious."
@AndrewPerti "The best way to make money consistently is to become the casino." Own the underlying and sell out of the money puts. "The vast majority of the time, you will reap the rewards."
10:53 @timber001 Selling covered calls on a shitco that he refuses to dump without a profit. 14:00 @jleqc on keeping it simple. He likes $WCP options. But treat options like penny stocks.
@DSteinmoeller $CNQ's performance pretty similar to $NNRG.
17:25 If you're talking to a dumb schmuck investor, and can recommend one #COM stock that's liquid, easy to get in/out of, what would it be? CNQ?
@Renniestein3 $CNQ at $100 WTI is a double, and a triple at $120 per @WhiteTundraSG. If any company is going to get an 8X valuation, it's this one.
https://www.whitetundra.ca/pricetargets
@Renniestein3 Of all the options available, CNQ is cheapest at 30%-35% implied volatility. $100 (CAD) JAN 2023 calls. If CNQ hits its $120 target, the value of the calls go from $3 to $116.
@jleqc "Not only could those targets be reached, they could be exceeded. If there's a complete upside boner it could even blow out those targets. But we don't know the timing, and the markets can stay irrational longer than we can stay solvent."
@InvestInOnG "Buy as much time as you can." Deep's way-out-of-the-money $40 CNQ calls from July have been very profitable. Buy as much time as you can afford to buy.
(aside: this morning, I bought a few $90 USD CNQ calls for 19-JAN-2024 at $4.50 USD apiece. These are 18X if Shubham's $120 WTI target price is reached).
24:30 @AndrewPerti "Buy as much time as possible. ... You had better own the underlying." Talk to your broker in a "clear, calm" manner about reducing pricing structure. They will work with you if you know what you're talking about.
29:00 Canadian firms with U.S. listings that have good valuations. GTE, VET and OBE come to mind. @InvestInOnG GTE in-the-money options are really cheap.
These are just lottery tickets (the $1 strike). You're getting some political risk, but Deep bought a few to keep an eye on them. Liquidity didn't seem bad. He also bought some OBE, which seems cheap.
There's some really attractive commodity plays outside the oil space. @AndrewPerti Thinks the smart money (fund managers) is rotating into areas such as food, housing. @sohaibab9 The smart money is IN THIS ROOM.
33:15 The fact that the fund managers aren't in this space allows the little guys to get in and win. @Josh_Young_1 There was a great opportunity in options when volatility was mispriced, allowing people to make 1,000% returns quickly.
The risk is this IS like a casino. If you keep playing, you'll likely leave the casino without your money. @sohaibab9 Fund managers have said they can't invest in energy (ESG). Therefore, they don't spend time researching values in the space.
In case you were feeling comfortable in your anonymity: "Twitter is recording it. ... FOREVER."
44:30 @Aniketwagh07 discusses Israeli shipping firm $ZIM and $XOM. @DSteinmoeller and DS discuss $CNQ as an alternative with better valuation.
"@Albertagarbage trusts all his money with Murray Edwards." ... @AbeEvreniadis addresses $ZIM later in the Space.
55:40 @datarade Unsure of the energy bet because pension funds will divest O&G holdings. How to account for this while diving into energy investing? @AbeEvreniadis Well-capitalized firms are the winners in this situation.
"If you can't get credit, you're screwed."
1:01:00 Is this why $IPCO went away from the banks to get funding? Question for the Steel Guru: Are CLF and X investible ideas with the current setup?
1:02:00 ** EPIC RESPONSE FROM @AbeEvreniadis! ** "For the first time in 27 years, steel from U.S. is more competitive than steel from Asia. And you have a massive supply mess in China."
"For the moment, I'd rather buy from U.S. Steel. I've got containers stuck all over the world. I'm an investor in U.S. Steel, I've bought it since $9. I'm the wrong guy to ask."
1:05:50 $ZIM traffic from the Far East is up 4-5X from pre-COVID levels. Be mindful of the sustainability of these dislocations. China and other nations want this fixed ASAP.
On an energy basis, mills (Europe) are going nuts right now. Their pricing is worse than what you're finding in North America. Energy inputs are killing them. There's reluctance to pass the costs along. "I think things are going to get worse."
1:08:45 @AbeEvreniadis Quotes for steel are good for 10 days in an environment when the order is for 20,000 tons of steel. Large mills produce 150K tons annually. @datarade says a contact is seeing steel bids good for 8 hours.
China is THE giant producer, but is not exporting. It is importing steel and has eliminated tariffs. There are structural supply deficits in terms of iron ore, billet, steel. ... "I don't give a shit (that I'm the most expensive), because I can deliver."
@BrayBrayi Comparing O&G to tobacco stocks. 12,000 percent return in last 30 years.
1:16:10: @AbeEvreniadis Russia/Ukraine produce 100M tons of steel/yr. China 10X that. China's steel not for export. Right now market is super tight. They've starved the sector for 10 years (and COVID). Be careful. Once this is ironed out, prices will drop.
If you take R/U and Belarus offline, what happens to the market in oil AND in steel?! 1:21:30 No reprieve from Ottawa's brain surgeons. How much pain can you take?
Demand destruction faster in energy vs. steel industries? Energy demand inelastic vs. steel. @AbeEvreniadis keeps it simple. Structural supply deficits the issue. Are you going to get viable, immediate substitution?
1:26:20 If we have supply constraints because of a host of things, then you're going to have higher pricing for longer and this will offset demand destruction. "I would be happy if oil was $90-$110."
Pension funds have been divesting for 2-3 years. They have created discipline for O&G companies. What concerns me is Government. Trudeau and Jasmeet's pact to form a stable government. A new admin might make it patriotic to produce O&G.
1:30:55 @InvestInOnG discusses Mariupol steel plant destruction with @AbeEvreniadis. Ukraine is incredibly rich in raw materials, but the country is a complete mess -- mass corruption. India buys all its billet from Ukraine.
These sanctions aren't over soon. You're looking at a new Cold War, a re-pivoting worldwide. How does support your investment thesis? How do you connect the dots? You will continue to have supply deficits.
1:38:00 "You can't shit an entire sector for 12 years and pretend that now you need them, they will do their part." No CAPEX, they'll reward shareholders. The narrative has changed.
1:50:14 @jleqc FINAL BOSS LEVEL meditation that builds to a stemwinder on today's situation. "Profits are evil, needs are sacred. ... The rhetoric is disturbing. ... Voters looking at the hairdo and the colorful socks."
"These are the same people that in other countries nationalize industries. They write rules with two minorities forming a majority -- I don't know what I would value this risk at."
"You want sustainable pricing. ... @sohaibab9 If you piss off the producers, then they won't be cooperative moving forward.
2:01 In China, you don't want to be an outlier. ... They have an infrastructure plan, and they want to put people to work.
Some of the top names on the White Tundra valuation sheet are liquid and have NYSE listings, allowing Americans to easily invest. VET, GTE, OBE. When will Cardinal be updated? @jleqc is as eager as I am!
2:13:45 @WhiteTundraSG says after Q1 earnings come in, it'll be time to realign portfolios. $WCP team are ballers. Dollars will be allocated accordingly!
$CVE crack spreads/refining margins looking good! A few names are on the hit list if they don't deliver. @Renniestein3 Thoughts on CNQ and its options?
It produces 1.5 BCF pure profit NG and is such an efficient company. It's the only major that has oil and NG. Season Ending Plot Twist: CNQ is on the Shubham black list!
For Americans, CVE options appeared to be the best value. What values are out there? @jleqc and @WhiteTundraSG are buying ALL THE $WCP OPTIONS!
- NET ZERO
- BUY BACKS
- BAD-ASSERY
Should $WCP get extra torque because of carbon-capture?
2:23 $WCP 22% hedged in first half, 14% hedged in second. Lots of light oil (WTI minus $4). A rocket! Funds that can't buy oil will get into this company.
CPG left in the dust. @WhiteTundraSG Going into the fall options because there will be no demand-destruction in the summer. The longer we go the more demand-destruction will occur.
to @WhiteTundraSG: "You feel you're right, but you remember the beatings you've had. ... (Shubham) keeps us focused and builds our conviction. It's Shubham's voice and conviction that makes a positive difference in our lives."
2:31:30 "People don't realize Kazakhstani oil coming off line ... It's going to smack them in the face. ... The pain trade is required." 2:35:40 The case for funds going only into $WCP.
Hedges are really killing companies such as CPG, ARX, SDE, SGY. @WhiteTundraSG Using 2023 FCF at $100 WTI, Surge can buy its market cap back in 18 months.
2:42:00 (NOT INVESTMENT ADVICE): In April-May you need to be looking seriously $SDE and $SGY. You won't get the chance on JUL 1. You will be shocked at the extra money they make. People aren't looking at Q3. SDE condensate hedged at $49 WTI!
2:48:20 Time to look at services? @WhiteTundraSG too much juice in the E&Ps. @sohaibab9 "Whatever you get with the E&Ps gets compounded in the services." Services are capital-starved. Channeling @AbeEvreniadis: Rent a couple of names before you own them.
@UndervaluedOnG gives his '22 prediction. Season-Ending Plot Twist 2: $WCP will buy $CJ!
2:57:20 @PETE_RM makes a compelling case for investing in services. ... "With consolidation, especially in drilling, the big boys" are forcing rate increases. 25%-33% increases.
3:01 @sohaibab9 Says a Space dedicated to services with @PETE_RM @TeddyGambino @Tsxman and others is something we should do. (ASIDE: He's right! We need one).
High-Energy Tuesday Ep. 4