Live Interview: Jesse Day

追加: 2026-05-24

[00:00:01]point. Looks like we're live now.

[00:00:04]>> Yeah, it looks like it. So, um, as people filter in, uh, this is going to be recorded and shared. Um, just just checking that you're still able to hear me and see me.

[00:00:16]Okay. So, um, the the goal of this um is that one actually we have a lot of uh crossover. There's a lot of folks that are subscribed to Bison Insights that um are subscribed to your channel and that have listened to your interviews. Uh but for the folks who aren't, uh Jesse is uh a leading commodities sector uh podcast interviewer and runs a leading commodity focused channel on YouTube and um has interviewed me a few different times and um like I was sharing in the sort of morning chat for the uh for Bison Insights, um I think my favorite part about uh chatting with Jesse is that after the camera turns off or the recording turns off, we chat about stocks and he always has an interesting perspective and I noticed that that Jesse has through interviewing all these very smart uh CEOs and fund managers and pundits and so on has a very uh educated and nuanced perspective on commodities.

[00:01:21]And so, um, Jesse, why don't you tell us for a minute, if you don't mind, about your background and then about what you're finding compelling about, actually, it'll be a three-part question. So, uh, short background and what you what you do. um what you are finding compelling about oil stocks or at least what you were at the end of last year and then um what what your process was for finding this one particular oil stock that was on Bison Insights and sort of how you without naming names just sort of what what was compelling about it versus sort of some of the other stuff that you were that you were looking at and I might interrupt at some point but that's sort of the the general idea of what to chat about now.

[00:02:05]>> Cool. Well, yeah, feel free to interrupt. Um, in terms of my background, it's mostly in broadcasting, which is kind of what brought me to doing commodity culture is that I started off uh with a broadcasting career in Asia, mostly in Beijing, China, and Soul, South Korea. Um, I started to get a little bit interested in investing at that time, but this was like mid 2000s. Uh, and and I started to dive a little bit into the efficient market hypothesis, Eugene Famine and Kenneth French. That was kind of my first introduction to the world of investing. Um that was something I got interested in but kind of put to the side as at the time there was no online brokerage services. It wasn't easy to invest compared to what it is today. And once I came back to Canada, um I started working at investor relations firm in Vancouver called Kin Communications and they had a lot of uh junior mining clients, clients in the silver mining space, gold mining space, uranium. And at the same time, I kind of started to develop an interest in both the concept of sound money in the form of gold and silver. And I became very interested in energy. Um there's an interesting book, I don't remember who the author is, it's called energy, a human history. And um that was one book that really got me fascinated. It goes through the history of energy from the burning of wood uh whale oil, coal all the way up to modern day with with nuclear energy. And I just thought, you know what, I got I want to do something. I want to make some documentaries. I want to uh explore this topic further. And so I started my channel as a documentary channel. Um and I started off making a documentary on coal. And uh and then I kind of went up the chain through natural gas, uh uranium, oil, and uh and the uranium documentary hit it really big. Um and then that kind of helped launch the channel. And then I started doing interviews because I continued to documentaries. I did gold, silver, platinum. I've done a bunch now, but they take around 3 months to put together. So I wanted to keep a steady stream of subscribers and people tuning in. And so because of my broadcasting backgrounds and I was already a big fan of shows like Kitco and Stansbury Research and the J Martin show. So I was kind of getting inspired by those programs and I decided why don't I start interviewing people about these commodities that I'm making documentaries about. Uh and that kind of brought me to where I am today. Uh so that's kind of the background of the channel and uh my own background when it comes to my understanding of commodities and obviously I've been able to learn so much over the around four years that I've been hosting conversations with people like yourself um and people who are experts in various commodities. It's given me kind of a multifaceted uh knowledge base from which to draw from which is really awesome in terms of what made me uh interested in oil and gas. So, I didn't really start getting into investing until 2020, aside from my brief foray into the efficient market hypothesis when I was in in my little room in Korea when I was living there.

[00:05:04]Um, and so I started to dive into it through uh the old school value investors. Uh, you Warren Buffett, Howard Marx, Peter Lynch, people like this started reading their books. Um, started watching interviews with people like like Markx and Jim Grant and people like that. And um so that's kind of what started to influence my approach. And so I started examining uh which sectors seemed undervalued or unloved at that time. And oil and gas was obviously front and center. And I just noticed that you know the political elite hated it. It was getting disparaged in the media all the time. People I were having conversations with about it. It's like you couldn't talk about it to people in my friend circle anyways in Canada because they just thought it was an abhorrent thing and it needed to go away. I mean I'm from the west coast of of Canada which is often called the left coast because people are very leftleading and very environmental there. So I was just looking at how much hate the sector was getting overall and then I was looking at these companies kind of through the lens of you know at the time I didn't have much of a knowledge base about you know what is a reserve replacement ratio what is a recycle ratio and a lot of the oil and gas terminology through which the sector is evaluated I just kind of knew price to book price to sales price to free cash flow um you know PE forward PE. So, I was looking at all these metrics on the larger producers because I kind of have a bit of a a risk aversion from the start coming from that old school value investor standpoint. I'm not I'm not one of these people who wants to swing for the fences on 10baggers. I'm just looking for, you know, reliable cash flows. Um, investing in something that's undervalued and making perhaps a 2 to 3x return over time. Uh, and so a lot of these big producers just looked extremely attractive on all of those kind of traditional ratios and metrics and um, so I started kind of diving deeper into the sector, made a few investments um, in in that space and I've kind of grown my knowledge base over time from speaking to people like you, people like Joseph Shaker, um, people like Shabbam Gar. Uh so it it's it's been a really fortunate journey how I've been able to kind of complement um my initial knowledge base by talking to so many people who are so um knowledgeable in the sector and drawing on that experience to make my own decisions. I'm still a novice in the industry. Um, and that's why I think what we're going to get into a little bit later is why sometimes I I need to I don't want to say lean on, but just take into consideration points of view from people who have more knowledge than me and have the humility to take that into my own evaluation of a particular company or particular sector. But what one other thing I will say that part of what I do in my journey as an investor is I also have to be able to listen to certain experts and believe that they're wrong because everybody's got a different and I speak to several people on my show who have been consistently bearish on the oil and gas space and I I listen to their opinion as well and I have to take certain things they say into consideration. But one interesting pattern, I'm not going to name any names, but the people who've been consistently bearish on oil and gas that I've spoken to, um, I can kind of tell by speaking to them about it that they don't have a huge depth of knowledge on the subject, and they miss a lot of the pieces of the puzzle when they kind of give their spiel about why oil is going to crash to $30 or whatever. So that's kind of I I pay attention to both, you know, the points that I agree with and disagree with with various experts to kind of come to an overall conclusion.

[00:08:48]So I don't know if that answered your question, but but uh that was >> that's great. Those that was a really good overview. So then can you talk more specifically? So you interviewed me I think for the Vancouver Resource Investment Conference uh for their sort of online panel thing. um I think it was in December and it was right around when I had published a investment thesis on a particular idea that was a large cap and um can you talk a little bit about sort of what you were thinking about doing again not on a no names basis this isn't about this stock is you know the particular stock is better or worse or whatever but I'd be interested I think people would find this particularly interesting because you ended up choosing a Bison Insights idea over a sort of very highly touted popular value large cap US stock.

[00:09:42]>> Yeah. So at that time I was looking to add more exposure to the energy sector in my portfolio because you know my energy stocks went on a bit of a ride in that I initially started actually deploying capital to the sector in 2021 but I missed the runup after oil went negative and then the stocks did extraordinarily well. I was late to that party but nonetheless uh the equities that I selected performed very well for the next I want to say year year and a half and then there was a downturn in the energy sector overall and um you know I'm a this is a little bit of a perhaps a foable that's not the best but I really don't like investing in things that are going up and so when I look at my overall portfolio first of all I already know that the setup for energy is extraordinarily compelling that that's already my thesis and my opinion and I saw the stocks that I selected do very well and then go down into the negative and I'm looking over my portfolio and fortunately everything else that I've been in but the the vast majority of the rest of my portfolio is uranium equities um gold and silver stocks and a little bit of fertilizer exposure um and a little bit of emerging markets that's basically the whole picture and at that time the rest of my portfolio was doing very well everything in the green all a lot of my stuff up 100 200% and my oil stocks were all essentially minus as opposed except for like you know the XLE ETF and that that that was positive but so much of the other stuff was down and I already had done you know my work on the companies I'd invested in and I'd already been um keeping up to date with them and I didn't see any fundamental reason for why they should be dropping and then of course you look over the rest of the energy sector and you see okay everything's it's not my particular stock selection is that the sector as a whole kind of isn't performing well. But I think this is an opportunity either to buy more of what I already own at at a cheaper price than I originally paid for it or to perhaps look for a new uh company to invest in. And my portfolio was a little speculative at that time. I didn't have enough of those big names, those big anchor positions outside of like the ETF. So, I was looking for another big producer uh that I could add and I was specifically looking in the United States because I had concerns about the regulatory environment for the oil and gas space in Canada. What with the Liberals being so staunchly, you know, anti- fossil fuels, pro-renewable energy. I just felt that they were going to implement more and more policies that could be restrictive for the oil and gas sector in Canada. So my thought was, you know, I I don't have any at that time I didn't have any exposure to US oil and gas equities outside of the XLE ETF. So I was thinking I want to get a big US producer, not Exxon or Chevron, something else.

[00:12:41]And so I I started to do some research.

[00:12:45]um came up with a list of names was looking at these you know what how undervalued they appeared compared to peers in the market and I landed on one company that that was as you said it was a a very well-known company that a lot of people were talking about um about to do a merger maybe we can get into specifics later and it just looked very attractive to me on a variety of different valuation metrics um and when compared to to peers around the same market cap up. And so I then came across, you know, I I'm a subscriber to Bison Insights and you were posting about some different ideas and there was another company that was a big one one of the bigger oil producers in Canada and uh you also at the same time released some information in your newsletter as well about why the very company I was looking at the merger was actually not going to be good for them.

[00:13:41]So, I started to look at at all of the research you were coming up with. And as I said, I'm not an expert specifically on the oil and gas space. So, you brought up a lot of points that I wasn't even tracking. I just figured, oh, the merger is going to be good because they're going to become a bigger company and uh, you know, that's great. They're going to become one of the bigger producers and it's just going to give them more, you know, long life assets.

[00:14:03]This is excellent. and you kind of pointed out some some facts about that uh acquisition I should say um that were not favorable and in in turn provided this alternative which was in Canada and that led me to actually dive a little bit deeper into what's actually going on with Canadian oil and gas regulation because there's what politicians say and there's what they do and although Mark Carney has been very um moronic in terms of what he says is regarding the oil and gas space. The fact is that it looks like policy is getting less restrictive, not more since 2025. And although the industrial carbon tax is still certainly a very um serious impedment, in fact, you know, you you listen to earnings calls from Canadian oil and gas companies and the CEOs will often talk about kind of how they feel constrained and and that Canada is not incentivizing investment due to this industrial carbon tax and certain other policies. Of course, we we know about the most recent news, which is the the pipeline being built from Alberta to BC. Now, there's all these concessions that need to happen. Um, and this whole concept of we need to create lowcarbon oil, uh, it's a it's a bit of a problem and there's more hoops to jump through certainly. I don't know if you put a gun to my head and say, will the pipeline get built? I guess I'd say eventually, but it's all of these these things that happen in the Canadian oil and gas sector, the the the indigenous side, how you have to consult. Of course, we should always respect people's land. There's no reason to be irresponsible, but the fact is that even though a lot of these companies are very responsible, it still requires consultation, which really means you're going to have to pay a certain amount to these different indigenous groups, and there's a lot of them. So, nonetheless, after I did that kind of deep dive on the regulatory environment in Canada, I realized, okay, it's it's not as favorable as perhaps in the United States to some extent, but the level at which these equities are trading at versus what their true value appears to be is pretty compelling in in Canada specifically. And I think over the long run, you know, although Mark Carney is going to have to say the right things, it does look like the policies actually being implemented are becoming less restrictive. So that gave me a little more confidence. And um and and so I I pulled the trigger on the idea you presented in the Bison Insights newsletter year to date. I mean, I posted on X about how it was outperforming by 19% year to date. I I I think that might have been a month or two ago. it is now outperforming the stock that I was going to pick by 50% uh year to date. So, um and and it was interesting. I don't want to sound like I'm I'm overly promoting buys and insights, but you know, I I talked to my wife about, okay, I'm going to invest in a new oil and gas company. I'm going to invest in this. And I I kind of explained to her in layman's terms the different options that I'm laying out.

[00:17:05]And then when when I laid out this idea, I was just like there there comes a point where you have to kind of defer to the experts. And if you're if you're simultaneously, it was almost around the same timing that you were both putting out this new idea that that I hadn't considered cuz I was only looking in the US and then you also put out a report on how the company I was considering their acquisition was not favorable. You called it deworsification. you provided a lot of information on that. And so I at at that point I just I said to her I have to I have to go with the expert on this one. You know, of course I did my own due diligence on on the new company that you had presented as well and found everything you were saying to be true and um it it looked very attractive and so I pulled the trigger and and obviously I'm glad I did. So I hope it doesn't seem like I'm I'm putting Bison Insights on too much of a pedestal. this isn't a commercial but um but nonetheless it was extremely helpful and it turned out to be the right call in the end.

[00:18:05]>> Yeah, I mean the reality is that everything in life is a commercial in a capitalist society to some extent. So uh but I do I do appreciate it and again the goal of this isn't uh to garner some sort of like extreme endorsement. It's just to talk about the process and you know sometimes processes even good processes lead to bad outcomes and sometimes bad processes lead to good outcomes. This it sounds like was a good process. The only part that was uncomfortable for me was the defer to the expert thing. Uh I I I think actually you might have been more optimistic about the Canadian oil producers than I was at that time. And I just happened to really like this particular idea. So I put up this chart um which which uh I did an update on the on the idea this morning which was totally a coincidence uh completely unrelated to doing this. sounds weird, but just, you know, trying to do a few updates uh after earning season. And I was thinking about selling this particular stock. And so I had my analyst help me like pull together numbers and sort of think through like, hey, is this something that I'm going to, you know, that we're going to sell at our, you know, investment firm? And then, you know, is this something that I should close out as an idea because it's outperformed so much? And the answer was no. Uh it looks like there's a lot more upside. But the the reason to highlight this particular chart is that it shows Jesse your observation and thesis on the Canadian producers, the large cap producers actually not being so bad relative to expectations where that analysis, just getting that right meant that if you bought that basket, you'd be up 50% from the December 6th publication of this um of this idea versus XOP, the large cap US producer index um up 31% and then this particular idea up 74. So the the idea I think was cheaper and it sort of worked uh you know I think the value plus the catalyst is is helping drive it. But I think the insight that that you garnered where I think you were actually more optimistic at the time than I was about the specific direction for Canadian regulatory uh policy and pipeline outlook and so on. And again, no one knows for sure what's going to happen. It's just a question of sort of how the market interprets it and what's going to get discounted into the stocks. But I think this uh you know that that material outperformance of the the peer group of these sorts of companies versus XOP based on the particular insight that you came up with um and and that you got comfortable with is actually it's noteworthy and uh worth uh worth highlighting. And then here, let's see. This thing freezes sometimes.

[00:20:42]Uh let's see if I can Yeah. Okay, great.

[00:20:44]Um, and then just, you know, the the free cash flow yield for this one. Um, even here, it's still crazy cheap, but it was even crazier cheaper in December.

[00:20:54]And then the whole peer group was cheaper than I think the public company that you were looking at in uh in the US at the time, which was part of why um I think it was so compelling to get this exposure at the time and then also why some of that US exposure was not so good. And then actually there was a big asset transaction um yesterday and it's all over the news today as we speak and this company that was diversifying has now uh further deified or something and paid a record high level for assets um due to needing to replace their inventory. Whereas this particular idea, you know, has long lived reserves and uh doesn't really need to to waste money, let's say, like they did their own deal that was high priced that people didn't like, but it came with a lot of production and, you know, turned out to have been a steal, whereas this alternative um you know, and I actually didn't hate the alternative. I just think uh the relative value and the relative um it was just relatively much more compelling in my view at the time. And it sounds like you sort of came to that maybe from a little bit of a different perspective.

[00:22:10]>> Yeah. And when I said defer to the expert, I didn't mean that I would completely rely on your analysis, but it was more that I was kind of looking at these two companies side by side at this point and I hadn't been considering all of the downsides of this acquisition.

[00:22:26]And um and so when I put that into the equation and realized how much time you spend on this process, that's when I came to the conclusion that okay, this Bison Insights idea is most likely superior to my own. Again, we don't know. I love that you use that quote. I I I've heard Howard Marks say that. It's my favorite Howard Marx quote that good decisions lead to bad outcomes and bad decisions lead to good outcomes all the time in investing. So actually it you we both could have been right about this particular stock and it could still have underperformed you know compared to the other one that I had chosen to select and that doesn't mean that we were wrong. it perhaps in the long term it would have played out differently but but in the short term obviously sentiment can drive markets and so who knows for whatever reason some big scare comes over uh investors related to the Canadian oil and gas sector specifically and names start selling off these sorts of events that we can't foresee can happen black swans um all the time as well and so I love that that that you highlighted that point um at the end of the day nobody really knows we're just kind of all making our best guess based on the information we have in front of Yeah. Yeah, for sure. I I I agree. And I think uh I think even we can even just be fully wrong. So, not just from a perception perspective, but it's possible to look at something and say, "Hey, most likely, so for this idea that that you uh bought shares of, you know, part of the thesis was that they were going to go redevelop assets and they were going to be there was going to be better there were going to be better well results and sort of more synergies than people expected. And it's possible that they could have gone in and there could have been some unforeseen engineering problem or regulatory issue or some other thing and there's always a risk there and it could have just gone poorly. And so um you know and that wouldn't have made it a bad idea up front even though the outcome is bad.

[00:24:24]And I think that's where it's sort of this like mind twist a little bit where um cuz in finance ultimately you're judged based on your your outcomes uh over time but like outcomes over time don't necessarily translate to um don't necessarily translate to any individual outcome being perfect and there's no guarantees. Like so we have this like chart of our historic of the ideas I've shared and how they've done and again like I I try to tell people and people get offended by this. I don't know why, but like I've shared ideas that have done better than average and I hope to continue to do that, but like the odds of actually hitting this high are low.

[00:25:11]And you know if you hit I think outperformance on 55% or if you just oversize and you hit less than 50% but you oversize your winners you know that that's how some of the best performing fund managers ever have you know the Warren Buffetts and the Stanley Drugellers and whatever they win not by being right all the time but by owning a lot of what they um what they are right about and then you know in some cases being right just a little more for them being wrong. So, you know, this could have been that idea number 12 where it's down 45% or whatever.

[00:25:47]Wouldn't have been so fun to talk about it, but uh but there's always that risk.

[00:25:51]And why don't we talk about that a little more? Honestly, I don't know that we need need to get into specific names uh in this conversation. I just think uh I think this is sort of a generally um relevant it's it's it's helpful I think to talk through through some of these sort of higher level questions on commodities as well as on sort of investments.

[00:26:13]>> Yeah, absolutely. Um I I I do want to say as well that what when I look at companies in the commodity sector like commodities are very cyclical as we all know and I just feel like at this point in time the oil and gas sector you know years of underinvestment which is a a huge part of the thesis behind why I originally started looking at these stocks in the first place. But I I think that cyclically we're still in the early stages of a longer term secular bull market for energy. And you know what?

[00:26:46]Why don't we dive into the the the war in Iran and its impact a little bit? Did you want to do that? because um I I feel like that is kind of not the best simply because the reason that I was positioned in energy stocks was because I I believe that over time the price of oil is going to go up. Um, obviously organizations like the IEA constantly overstate supply and understate demand. And based on the real metrics that are out there, we know that the supply demand fundamentals are extraordinarily compelling for the sector. There's not enough new exploration and development that is occurring to bring new reserves online.

[00:27:26]Prices are getting higher to extract oil in the in the shale fields, the big shale fields in the United States. By and large, many experts believe that those fields are starting the production is starting to roll over. I mean, the list just goes on and on of bullish fundamentals behind the sector. And of course, what happened with the closure of this trade of Hormuse and the war in Iran is that it exacerbated and accelerated these factors that were already in place. And so, we've seen oil suddenly spiked to $100 around WTI and stay there consistently. And I believe that this situation is probably not going to be resolved anytime soon.

[00:28:05]Stephen, thank you. I I noticed your comment there. I love commodity culture.

[00:28:09]Thank you. Um and so I think that we will probably see these sustained tripledigit WTI prices for longer than perhaps many are anticipating. But the fear of course and it's such a bad fear to have but if this conflict gets wrapped up and resolved completely and let's say the Trump administration says guys we're pulling out that this is it you know whether that's because of pressure from allies on the fact that hey we can't sustain this oil price like this is not going to work for our society and our our people because it is causing a lot of pain worldwide at this point. So the the the the fear as an investor in the sector in the short term is that that is going to lead to a major sell-off because as I mentioned in the short term the market's driven by sentiment and so of course there's a paper futures market which so much speculation happens on and so we could see large-scale selling uh in in the paper market and that could lead to much lower WTI prices on futures and that could then lead to people start selling off the oil stocks etc. cascading effect. And so I think that's a very real threat that people need to be aware of. But from my perspective, I invest in these companies. Um, and I think of it as ownership. I'm a part owner of these companies. That's the old school value investor approach I was talking about.

[00:29:26]Although this is cyclical and people have to realize this is not like a set it and forget it portfolio where you just buy Exxon and then sit on it till your retirement or whatever. you have to be aware of of the cycle and there probably will come a time when it's time to sell these stocks. Um, but I think if you have a long-term time frame, that could potentially be a buying opportunity as well. So, it depends on your time horizon because somebody with a shorter time horizon might want to if they've made uh, you know, large profits already from this geopolitical unforeseen geopolitical event, then maybe it would be best to to start to divest yourself of some of these equities. But I I think if you've got a long-term time horizon, we could see a a big drop due due to that happening as a potential buying opportunity because eventually the fundamentals will be recognized by the market at large in in my opinion. What What are your thoughts about that?

[00:30:18]>> Yeah, I I had a dinner earlier this week with the CEO and CFO of this multi-billion dollar Canadian ENP and the CEO, they've done very well. They're on their like fourth entity. They've sold stuff and just done extremely well, which is unusual. Unfortunately, over the last couple, you know, decade, decade and a half. A lot of these guys have lost people a lot of money. These guys have made them a lot of money, which makes me pay more attention. You know, if you're the better you are at it, the more I think you you people should pay attention to, you know, for some of these executives have like lots of opinions and no returns they've delivered and others have the they don't normally opine on stuff. And he said what he thinks is going to happen is that there will be peace and that there will be a sell-off and that there are so many folks that are on the sidelines waiting for that selloff because everyone's so worried that there's going to be this big sell-off associated with it, especially after all of these sort of fakeouts that what's going to happen is that peace is actually going to be a buying opportunity and he thought that there would be a sell-off for a week or less and that it would be just a generational essentially buying opportunity because that would be your sort of bottom into this multi-year bull market along the lines of what you're saying where it wouldn't be as bad necessarily as like the April of 2020 just complete calamitous collapse negative prices but that it would be a nice entry point and then that um the problem that people are going to have is that everyone is lined up to do this and so the stocks might not go down much and then they might just go up a ton. So he was thinking it sounded like down five or 10% and then up huge and that people might get too cute and miss it and you know like they're seeing for their company there's just this enormous lineup of folks that want to own the stock that don't necessarily want that exposure to this whole war scenario like you were describing and that want the exposure to the company are paying attention because they saw oil go up and are now expecting it go down. they want this thing anyway and they want it after, not during. And so, um, I hadn't really thought about it like that before, but I think there is likely an a dramatic increase in interest in the sector, but not necessarily an increase in ownership in the sector like you described. Maybe some short-term stuff, but not real sort of ownership. And so, the one so that was that's one perspective, one side of this. The other side of it is that right now oil prices should probably be higher and they aren't mostly because you know I think like without a tinfoil hat on just the sort of fake ceasefires like you know peace agreement but then not over and over again um has introduced a lot of price volatility into oil futures contracts which reduces the amount of those futures contracts that investment funds are allowed to own because the the CTA TAS and the hedge funds that own futures have risk budgets. They they don't they don't buy stuff with dollars.

[00:33:25]They buy stuff with value at risk budgets. They get like a percent value at risk or whatever and get to go deploy it. And so, of course, they use dollars to buy it, but these are futures contracts. So, you're putting down like 1/100th or 110th or whatever the value when you buy it. And then, you know, you you suffer these large fluctuations in both directions or you're buying options on the futures and whatever. So, um, there's been observable price suppression. I think it's about $25 worth of price suppression where just this volatility as well as the maybe increased odds of there being a peace agreement because there have been so many floated like if there had been none of this and like zero talk of uh there being a full peace agreement. there was a ceasefire like like the actual fact pattern had played out but none of the um job loaning around it I think would be probably 125 WTI plus or minus $5 and so that makes me even more interested in holding exposure here because there's still the upside case which again is calamitous humanitarian wise but just purely economically the upside case is that the war resumes and more energy infrastructure is hit and there's some more permanent damage or potentially you know, if the US loses and Iran sort of restricts flows out of the straight of Hormuz for years to come, there's a real right tail scenario here beyond what we've seen. I'm not saying it's very likely, but there is that chance.

[00:34:47]There's also this other chance that the the dip gets bought. And so, I think it's really hard here to know what to do exactly. And I I'm very open to any of those sort of different possibilities, the one you described as well. And I don't own this stuff. I've always thought there would be a potential disruption the flows and you know owning oil stocks for the fundamentals and then also for this added benefit of geopolitical risk has been a a core aspect of my interest in the sector. But I'm not sure that we have less supply just here than we did a year ago. We might have more and I'm not sure we have much more that's priced in given the discount I think to oil based on that value at risk shock that we've seen to the to the commodity funds. I guess I'm curious about your thoughts on that. You you hear a lot of different market analyses and perspectives across a number of different commodity spaces.

[00:35:44]What what do you think about that?

[00:35:46]Yeah, I think in on on the question of like holding through this, I I think that in terms of if you're already invested in the energy space at this point, then I I don't think there's a reason to sell in anticipation of some sort of peace agreement happening because things could go either way as you mentioned and every time I have tried to time the market and get smart it has almost never worked out for me.

[00:36:11]So I have to so my my theory is just to focus on the fundamental value being presented by the commodity and the companies that I've selected that produce this commodity and if that appears to be an attractive valuation for which it's selling then just buy it and don't get too cute looking at charts and what's the RSI and maybe I should wait for the RSI to go down below a certain level and buy it. Um or maybe I should wait for XYZ event which will probably occur. Um, this is kind of a a an a mistake that I notice a lot of newer investors I talk to um making is that, oh yeah, I just, you know, I bought CNQ or some some oil and gas company and it went up 30% and I sold it cuz, you know, it's going to go down again as soon as Trump says something's happening with peace and then I can just buy it back for cheaper. And that game kind of works until it doesn't because at at some point you're going to be in a position where you've sold it expecting to buy it back cheaper and it keeps rising and because of I don't know what you'd call that psychological fallacy, whether that's a sunk cost fallacy or or what whatever. It's just so difficult for somebody to then go, "Oh, I was wrong and I'm now going to buy it back for a higher price than I actually sold it at." That is almost impossible for human beings to do and they'll justify it in their mind. So much of this game is is psychology. So that's why I try not to get shaken out by these short-term events and with geopolitics, you just never know how it's going to work out. And you said something interesting there about uh the energy sector kind of protecting in a sense when these sorts of geopolitical shocks happen. And actually uh Louis Vinc is is somebody who comes to mind who talked to me about uh the energy sector being a defensive sector in his portfolio. A lot of people look at it as a riskon sector.

[00:37:59]Um, but he was describing how it's defensive because it's it's not only defensive in your portfolio, but it's kind of defensive in your everyday life because it protects you from the shocks of energy rising and your day-to-day costs, your cost of living if you own energy equities when that's happening.

[00:38:16]So, I think that's a really interesting lens also through which to view um investing in the oil and gas sector that it can actually be defensive as opposed to something that's that's risk on. Um and uh you're you're bringing up a chart here.

[00:38:30]>> Yeah. Yeah. Well, so uh I try to not sort of show stuff from my investment firm on this. And just to be clear, first of all, none of this is an offer, solicitation, or recommendation. But specifically, this this investment firm there, the investment's only available to folks that are accredited and qualified investors. Like there's not a solicitation, but we put out this thing in February about this sort of exact point where um we called it the market because we're not really allowed to say you, but you are at risk from insufficient energy exposure. like you being a market participant given how low the energy sector was relative to its share in GDP and of of the sort of market GDP and um or the the country GDP and historically when it's gotten to low levels that's it's not a perfect um indicator but you know it's a it's a pretty good compass I think in terms of um where you're at and whether you should have more exposure. And the nice part is if you bought a lot in 2000, um then when everyone else was losing their shirts and their dot stocks, you were making a fortune over the next eight years or whatever. And as the market did poorly over a while, in that time frame, you did really well. But then once it was a big percentage of the market, it was time, like you said, to get out of dodge. And so, um, you don't want to be there for that 2008. I mean, you want to be there for the blowoff top and then you want to get out. And so, um, you know, there's a lot of folks that look at this and say, "Hey, well, energy stocks are up a lot right here. Time to get out." Right now, we're at 4%, let's say, instead of 3%. And to your point, uh, you were saying this slightly differently, but to your point, I think that's missing the forest for the trees.

[00:40:21]I think you really want not you now I want to own this till we get to that average eight or maybe you know I've seen on a longer term average it's 15 or something if you go back through the 70s um and so and we have a shot in a world let's say we get to this $150 $200 oil price environment which is not it used to sound completely ridiculous I just had these 250 WTI hats for fun where like you know at the extreme end of another 2008 type cycle we might get there, but we could get there in 3 months if you know the straight stays closed or a month if the straight stays closed and there's a war and more um infrastructure is destroyed. And so in that scenario, you could get I think up to 10, 15, 20%. Which would be horrible for the broader market. This is not a bull market for the S&P or tech stocks or whatever. And I'm not really like a doomer. I just like this is this like you said and like Louie Goff said um this is it's sort of insurance and the crazy part is and what really I think would drive this and what you saw that sort of 05 to08 move up or or that really like um what was it uh this move right here I'm not sure how to show the um the cursor. Yeah, there we go. um right right here that move from below from the.com to that line there's that sort of vertical line there. I feel like we're we're sort of in that world right now, but just in the early stages. And so that was not a fun time to have broad market exposure and that was a fantastic time to have energy stock exposure. And I'm not sure I don't know I'm not saying we we are in that time, but it sure looks a lot like that or other similar times. And so um I think when when when I think about that from like a alloc allocators perspective, I think like I wrote here in February and I think maybe it's even more true now. I don't think allocators have the right exposures. I don't think you know these big brokerage firms have the right exposures that they're recommending to their clients.

[00:42:28]And the RAAS I know for the most part also you know you read their stuff they're all massively underinvested.

[00:42:33]They're all like excited about the the opportunity in private credit where they're dumping more money into, you know, this this troubled asset class that's in the early stages of collapsing, not uh not that's sort of in the early stages of a potential recovery after a decade and a half or almost two decade uh downturn. Anyway, I was I was rambling, but that that reminded me what you said really resonated and wrote about it and people got mad about this.

[00:43:01]They're like, "Oh, that's BS." like you're just a sector guy like and it's like well okay maybe but here's here's the chart you tell me like why why why should there be emotions associated with this uh financial market analysis and observation >> yeah and and there's still people pouring money into the broad indices the the S&P the the Dow Jones and the NASDAQ when you look at the valuation levels currently they're out of control on so many metrics Schiller PE ratio price to sales price to Buffett indicator and of course you know the interesting thing is people say that you know who was it sir John Templeton who said the the most dangerous words are investing are this time is different and then he also noted however at some point that 20% of the time it can be different is the AI revolution this the so-called AI revolution really that different these times I mean the valuations are absurd we're in that mania phase when it comes to the broad market that is, you know, it it doesn't repeat previous uh in instances like the tech wreck and the and the great financial crisis, but there's so many similar elements in that that there's her there's that herd mentality amongst people who are managing money. And of course, the big thing that's changed is the incredible amount of passive inflows coming into index-based ETFs. It's actually a massive massive part of the market and it's mostly people who are just chasing performance and going well tomorrow's going to be like today and these indices have been going up for so long at such a steady rate that it's just going to continue. And I think we're potentially entering an era where the traditional 60/40 portfolio is dead. And the problem is that so many people have been treating index fund ETFs like it's a high interest rate savings account. It's going, oh, all you have to do is put your money in an S&P 500 index. Wait on it. Don't worry. It's just going to keep going up. Then you just retire and you have a bunch of money. Now, that has been the case since post GFC. It's been a very long bull market for uh tech and and the broad indices but I think at some point it's going to you know the market can remain irrational longer than you can remain solid whatever insert your quote from some famous value investor but I think we're in that era now where much more caution is warranted when it comes to the broad market and should we see that draw down whether that's a gradual decay whether it's a calamitous collapse Um, either way, I think we're entering a world where people allocating capital are going to have to be more selective about what they're doing and they're going to have to look for real value as opposed to just chasing growth. And I think in that sort of environment as well, energy will perform.

[00:46:00]>> Yeah, I agree. I think uh I think that makes a lot of sense. I I like that uh I like that last uh spiel. I was just going to show everyone your uh channel.

[00:46:09]I think uh most people are familiar with it. Uh there it seems like there's 131,000 people that have found their way over there to subscribe on YouTube, which is phenomenal. And uh you know as uh as we wrap up and as you think about um Jesse's uh diverse perspectives across a number of different um across a number of different sectors or sorry uh commodities within the commodity sector and a a number of different really impressive uh fund managers and brilliant pundits and uh you know deep thinkers across a lot of different aspects of the economy and markets. Um, I think uh I think it makes sense to to um to really think about what you're what you're saying and I I I appreciate getting your perspective and uh it is sort of wild how these numbers it's like my ex account where there's like 130 something thousand like it's like hard to imagine connecting your I saw one of your recent interviews 91,000 people saw it like I guess as a last question disconnected so hey okay so we we both think that oil prices probably go up when oil stocks probably go up over a medium-term, let's say, um, with potential short-term negative volatility, and that's not something that anyone should rely on. They should figure it out for themselves and figure out if they want to own or not own stocks themselves. Um, what's it like?

[00:47:34]Uh, you know, I think folks listening are probably interested because the odds that that when they publish a video, 91,000 people will watch it are low. Um, what's that like for you to experience that? Is that does it change how you um think about the conversations that you're having? Does it change how you because you've been doing it for a few years and you grew it from zero. So your first interview you get a hundred people watching it and you're you know now 400th or thousandth or whatever you get 91,000 people looking at it. Does it change how you obviously you've learned a lot in the few years that you you've been doing this as a you know dedicated to this but the the thing itself does it does is is your experience different from that is there something that you can share with people in terms of like what you've learned not necessarily from the guests but from the process of building out sort of a larger audience. Yeah, it actually makes me more mindful in realizing that I'm reaching a lot of different people and so I want to try to get them useful information as much as I can. Um, and so it really affects how I'm crafting questions when I'm interviewing my next guest considering that a lot of people are um tuning in.

[00:48:55]Of course, you know, we don't give any financial advice on the program. We explore different investment concepts.

[00:49:00]We talk a lot about geopolitics. We talk about politics as well because that's all highly relevant to the commodities markets. But it definitely impacts my approach to crafting the questions, which type of guests I'm going to book and just being mindful that people are tuning in and there they want to get value from what I'm putting out there.

[00:49:20]And so that's really important to me.

[00:49:23]And actually outside of the interviews, the thing that really blows my mind because when I was a a student in elementary school, middle school, high school, I was so against the system. I was always close to last percentile of my class. I was always skipping classes.

[00:49:41]Um, none of my teachers believed in me that I'd become anything. And I have the most viewed educational video in the world on the subject of platinum at 1.7 million views and there's nothing else that comes close. I have one of the most viewed educational documentaries on the subject of nuclear energy and uranium at 1.3 million views. And so those are the things that that I feel are like my legacy because people are and I get comments from kids who are watching it for their homework who are writing a report based on it and so many people are tuning in to learn about these commodities and how they affect our day-to-day lives. So those those documentaries um which everybody can search up there's a playlist on commodity culture for my documentary work. those I see as kind of a big part of the ultimate legacy that I'm able to leave where people can actually get real education from as well. Um, so I don't know if that answers your question, but >> No, it's great. I just figured I' I'd ask since uh it's uh particularly rare.

[00:50:43]It's great to get your expert perspective from interviewing so many people on sort of what you've distilled which you shared with us in terms of your thesis on oil and just how to think about a commodity cycle where it's not forever but it's also not for a minute and um to think about sort of holding periods and potential volatility and so on. but also um you know your experience is it's not unique but it's very rare and so um and you you clearly have a talent for this so it's helpful to to hear sort of where where you're finding sort of value and what you what you've learned out of that. So thank you for for sharing that. Okay, I think I'm going to wrap this up. Thank you so much for uh joining me and for joining us here on uh Bison Insights. I hope this was uh productive for the folks that listened and I hope you enjoyed it and I'll probably end up uh publishing this first for Vice Insight subscribers and then uh you know releasing it over time to to the general public.

[00:51:41]>> Thank you for having me on Josh.

[00:51:43]>> Thanks. Take care.