Dalal.Holdings

https://www.bloomberg.com/news/articles/2022-10-08/firewood-demand-is-surging-as-europeans-return-to-world-s-oldest-fuel?srnd=premium Tell me how this is not an energy crisis on par with the one in the '70s... This is what you get when you overdose on ESG and let inept EU officials chart your energy and security future...

Detective is working on "windfall tax" on oil companies which will surely lower prices at the pump...

Watch out, Gavin Newsom going to get to the bottom of why fossil fuel costs so much in his state. Hope this detective can figure it out...

That's how it was in the '70s. NYC was nearly bankrupt and the cities were full of crime and drugs because the boomers moved to the 'burbs to raise their kids... Then Nancy Reagan came along: "Just Say No..."

Instead of lining up at the Gas Station, Europeans are hoarding Firewood for the Winter... For the ESG folks: is cutting down fresh trees and then burning them in a furnace cleaner than nat gas ?

Nixon Shock and Covid Printer going 'Brrrr are similar IMO. Millenials are the new Boomers and they are forming households, demanding higher wages and spending that paper on home/kids. Arab Oil Embargo recurring in Russian embargo of gas to EU/West and ESG causing chronic underinvestment in fossil fuels past decade... If you invested in the Go-Go stocks of Polaroid or Xerox (FAANMG) like Gerald Tsai (Cathie Wood), then they might be good businesses but not nec good returns...

I think a Reagan (Likely DeSantis) will follow this one term Jimmy

Speaking of the 1970s, Joe Biden more and more looking like Jimmy Carter 2.0

Looks more and more like the ‘70s to me And sorry, FAANMG more and more like Nifty 50

The problem is the rulemakers have to create rules for themselves...

80 something year old Pelosi wants to get all she can with her time left in this world Meanwhile we’ll imprison IB interns who trade on material nonpublic info…

I like the returns on capital, I don't like SBC being ~10% of FCF and repurchasing of shares "to offset dilution".

Obviously some iPhones will be purchased by those who drop it in the pool or lose it. Kids getting their first cell phones too. The question is all the "discretionary" iPhone purchases...upgrading because "the camera has more pixels", etc. If you have a 13 or 12, is upgrading to the new 14 as compelling as it used to be? If you need a new phone, can you get away buying a cheaper 13? Furthermore, my point (which I've made in the META thread about Oculus/etc) was that the technology sector might learn a hard lesson here: that technology is often a discretionary purchase and that if you are worried about being able to afford food or heat your home, it's going to be cut back. That includes all the advertising for discretionary purchases that GOOG and META provide (boner pills or crypto wallets) as well.

Depends on whose E you are talking about. Large global source of revenue in the face of strong dollar? Sorry to those who thought AAPL was the impervious FAANG stock... I also have a hard time envisioning iPhone upgrades in the near future for Europeans who are worried about their utility bills. S&P might go down due to its overweighting in tech stocks, but who is here to buy the S&P? My view is don't buy the blue chips and be heavily underweight in tech given the plethora of other opportunities available. Perhaps once you stop hearing from everybody "how screamingly cheap" Google and Meta are is when that might change...

That’s my current working hypothesis: That if we are living in some form of the 1970s, NG today rhymes with Oil in the ‘70s. Back then you had Arab countries with embargo of oil and now you have Russia doing embargo of NG … We’ll see how it plays out but it’s inflationary esp for Europeans. Developing the infrastructure for shale will not happen overnight. USA had lots of preexisting infrastructure and waterways (and low rates) to make shale a reality.

Russia looking to cut off the final gas flows with its announcements of “annexation”. https://www.bloomberg.com/news/articles/2022-09-27/putin-raises-gas-pressure-as-he-moves-to-annex-ukraine-regions

Seeing lots of conspiracy theories that USA behind these or this is not Russia. Always pleases me that there are many people in this world not equipped with the most basic of analytical tools (Occam’s Razor). Shrug.

The capital markets today are markedly different from when folks were handing out capitall to wildcatters, oil sanders, etc to drill baby drill... Not only do you have ESG and liberal heads of state in these nations putting a ding in capital available for fossil fuel generation in Western nations, you have shareholders demanding return of capital over reserve growth. And then you have surging interest rates and high yield paper these firms would have to issue to drill making leverage untenable... I think there is a strong bias in West to not drill and develop fossil fuels & related infrastructure and I think that may lead to an environment that keeps prices higher for longer (esp nat gas). The wild card is demand from China which seems like it will not be in the same league as prior decades; however I think that the world's thirst for this stuff is still strong.

The fact that many investors are hamstrung by their own doing ("ESG") making energy "un-investable" (for them) is a benefit for anyone who does not have such restrictions. It's easy to bash fossil fuels when they are abundant. Not when they are scarce and the winter is cold. "When the Well's Dry, we know the worth of Water" --Ben Franklin I think many are drawing parallels to recent downturns like '08 and March 2020 when energy dived with everything else. I think that today we face a far different beast...perhaps not unlike the one in the 1970's... My own favorite here is $AR Antero Resources which is virtually unhedged to nat gas prices in 2023 and has retired debt maturities thru 2026 with immediate plans to return capital to shareholders...nat gas however has not been friendly to investors for a long time so be wary...

https://www.bloomberg.com/news/articles/2022-09-27/nord-stream-probing-pressure-drop-at-second-russian-gas-link?srnd=premium This is a pretty significant escalation and sign that Russia has no intention of resuming gas flows to EU any time soon...

There are long stretches (decades plus) where energy dominates. Remember, XOM was among the largest market cap stocks for decade plus... I think the past decade or so makes energy seem un-investable for the long haul. It's often periods like that (underinvestment in new exploration, downfall of many players, etc) which are followed by long periods of outperformance. We shall see.

That's the thing. I think this time it's Nat Gas and not Oil that becomes the bigger issue as opposed to the '70s when it was Oil due to Arab Embargo. Now we have a Russian embargo of nat gas which is a big deal (not so much oil). Oil is still available from major producers (Opec and USA) and readily transferrable over wide geographical distances compared to NG which takes a lot more effort to liquefy, transport at -160C on specialized ships, and then regasification on import. Then you need the pipes to get it to end users...

There are several parallels to the 1970s occurring today that I think are driving inflationary winds: -- Geopolitical conflict leading to energy supply shock (Arab Oil Embargo then, Russia-Ukraine now) -- Large bulge population entering home buying/child rearing age (Baby Boomers then, Millennials now) -- Devaluation of Currencies (Nixon Gold Shock then, Covid Fiscal Stimmies/negative sovereign yields now) I'm not ruling out the possibility that we are living through some form of the 1970s. I think the Fed will be more aggressive now due to lessons learned that decade (no one wants to be Arthur Burns), but I wonder if the above 3 things continue to pressure prices how the Fed can mitigate inflation barring demand destruction.

The 1970's beg to differ. I think inflation is the wildcard here and makes comparisons to more recent downturns (like '08) less relevant. Hard to see how consumers cut back on NG consumption. Heating and electricity use seem highly inelastic to me.

Add U.S. Rail Strikes as another potential positive for Nat Gas... https://www.reuters.com/markets/us/us-natgas-jumps-4-rising-demand-renewed-rail-strike-worries-2022-09-21/ U.S. Storage levels are ~10% below 5 yr avg. While EU storage is slightly above their avg, not having gas flowing from Russian pipes this winter will lead to decline in storage and possible shortage. Russia also escalating on Ukraine conflict today. Nat gas is only not hard to produce in the USA. Seems like it's not so easy to produce in Europe and Asia (outside Russia) and yet Europe/Asia relies on it pretty significantly. Fat tails all around.