Podcast & Video Of The week

Geopolitics, Commodities, And Out Of Favor Stocks & Another Deep Dive On Oil

It has been an interesting couple of weeks in markets, and I have a couple stocks to update based on Q3 earnings. Today will be a quick post with a podcast and video covering topics that I think are worth a closer look. The first covers a wide variety of topics, while the second video is a deep dive into all things oil.

Value Hive w/ Calvin Froedge

This was interesting discussion that covered several topics related to commodities. Panama has seen civil unrest surrounding the Cobre Panama mine, which sent First Quantum’s stock plunging. They also talk about the geopolitical nature of commodities markets, comparing today to the 1970s. Things are lining up for shortages across a variety of commodities this decade, including oil and silver. The stock worth mentioning is Sibanye-Stillwater SBSW 0.00%↑, which is the world’s largest producer of platinum. They also produce gold and other platinum group metals (PGM). The biggest problem is that they are based in South Africa, which has basically become a failed state. Calvin talks about their security force (aka private army), the cheap valuation, and poor sentiment that has created the bombed out stock price. It’s a name I will be looking into some more over the next couple weeks, but I don’t think I will be a buyer for now.

Wall Street For Main Street w/ Elliot Gue

This one talks about the oil market and why it might surprise some investors moving forward. Supply and demand drives all markets, but oil is arguably the most important commodity where you see it play out today. Guest Elliot Gue talks about his view on oil, explaining that supply (or lack of supply) is a stronger factor than demand, or demand (or lack of demand) is a stronger factor. His opinion is that the lack of supply is going to be a stronger factor for the oil market moving forward.

Over the last two decades, recessions have created a recency bias among investors that oil demand and oil price drop in recessions. Gue is expecting that the lack of supply for oil will drive a decade somewhat like the 70s, where older readers right remember OPEC and other events constricting supply and driving oil prices significantly higher. The other topic they cover is the type of supply we have available. We aren’t at peak oil and we have more supply, but it’s not the cheap and easily accessible supply from past decades.

Wall Street For Main Street w/ Elliot Gue

“The idea that with $70-80 oil prices that there is going to be a surge in US oil production that is going to overwhelm the global market is pure fantasy. US production can grow but it’s going to be at a much more measured pace than we saw in the (shale) boom years, it’s a maturing asset.”

-Elliot Gue