My Shell, BP, Scorpio Tankers, Exmar shares are saving me these days. Anything to do with oil and gas and the transport of it. I guess diversification does make sense when you have absolutely no idea what you are doing like me.
I think it became clear now, that it is not only about investing.....Buffet bought it additionally and foremost as an inflation hedge....oil price goes always hand in hand with inflation....just buy the biggest player in the local Permian Basin and you are safe on this direction.
Thanks for the analysis. I heavily bought oxy last summer and now it is one of the few stocks with massive gains. Last week I started selling to buy cheap tech.
This market decline has been an interesting experience for a lot of investors. They get to see firsthand the dangers of overvaluations, the effects of political risk, monetary policy and macro trends all at the same time. I can't speak for everyone but I've learned a lot of things from this experience. We've been in a bull market so long we've all forgotten how all these factors effect the capital markets.
@@MrVaSiLiN4iK This will make me an extremely patient investor going forward. I'm excited to wait for the bottom and create some nice generational wealth for myself and my family.
Great video. I was in oil stocks since 2020 in a big way, but recently exited all positions. 2020-21 is when the easy money was made. The last year had many more obstacles. Recenlty I've been grappling with the dilemma you raised in the last minute or two of the video. And I more or less reached the same conclusion. Yes, there may be a commodity super cycle in the works but there is more downside risk to oil stocks due to elevated price and macro factors such as possible recession. Why fight the headwinds for maybe 10-25% upside in the next 6-12 months, I'd rather wait for a cheaper price. Despite the progress the industry has made with regard to "capital discipline", I don't see how one can do "buy and hold" in this environment (recession risk, possible Ukraine war resolution, more supply entering market etc.) and maintain their sanity :)
This guy Sven is the real deal . Fall 2020 he posted a video talking about how oil is on sale the valuation was very attractive. Since then oil has kicked the S&P 500’s behind.
The cure for high prices in oil is high prices, because it boosts investment.., unless there are politicians that are blocking those investments with mere ideological measures.. as is in case of oil investments...
Sven, I highly appreciate your content and your knowlege sharing. However, based on your analysis of the oil sector, I can conclude that oil ist not within your circle of competence. Let me explain why. From a very high level, you are right that the oil market and price is ruled by supply and demand which leaded to boom and bust cycles in the past. However, these days it is worth to pay closer attention to the underlying dynamics, particularly of supply side: - For more than 10 years, the global investments in long duration, conventional oil production (requiring large amounts of upfront CAPEX) have significantly declined. These usually need a 20-30 year planning horizon to get FID. The reasons are (1) the aftereffects of the global finacial crisis of 2008 where investors became less certain about future prospects and therefore shifted to short-term, unconvential production of oil (e.g. US shale oil boom) with faster payback but also much lower asset duration, and (2) due to the upcoming energy transition leading to a generally lower visibility for long-term demand of oil. - The hypergrowth phase of US shale oil (which is the only reason why oil was so cheap in the past 8 years) has ended. Fueled by cheap growth capital from PE and Wall Street, unsustainably high negative Free Cashflows were accumulated over the past 10+ years culminating in the oil price crash in 2020. As a consequence, most (burned) investors left the sector leading to very high cost of capital for the remaining players and general capital scarcity. - Due to the last 2 US shale oil revolutions, the best spots with the highest efficiencies were already drilled. The inventory of Tier 1 drilling sites is shrinking rapidly resulting in higher future investments to extract the same amount of oil = worse ROI at stable prices. - On top of these factors, ESG started to become a very important factor in the recent years which is additionally weighing on capital availability and cost of capital increases. - Fueled by all these reasons mentioned above, the exploration and finding of new potential oil field is currently at a multi-decade low These are the factors that negativly influenced the supply side before the russion invasion and therefore pointed towards a restricted supply side in the coming years. Then Russia attacked Ukraine and the West responded with strong and potentially long-lasting sanctions. This added another significant supply side risk on top of an already very tight oil market with quickly falling investories. Since Russia is an important oil exporter, a large part of these barrels will disappear from the global market for years to come. And even if Russia will get back, the current shortfall of income will inevitably lead to lower russian oil production in the future. This incident was also for WB the final trigger to invest heavily in the oil sector. We should also not forget that, despite the run in oil equities, they are still trading at the lowest ever recorded valuations on a FCF yield basis. At the end of this year, most of these companies have almost fully delevered their balance sheet and then plan to return the excess FCF (after maintenance CAPEX) completely to their shareholders instead of reinvesting it in production growth. To conclude what was said: - There is a structural underinvestment in the sector due to (1) unclear long-term oil demand outlook, (2) burned investors due to stupid US shale hypergrowth in 2010-20, (3) ESG pressure driving cost of capital up and making available capital scarce - Geopolitically induced supply reduction due to sanctions on Russian with (quite probably) long-term duration and impact - Record-low valuations of oil equities at current oil and gas prices while balance sheets are quickly delevered and companies pledge to return excess FCF to shareholders instead of reinvesting in growing production (= "indemnification" for the past years of cash burning) On the demand side, you mentioned already the key drivers there: growing global population; strongly growing middle class in Asia; slower than expected subsitution of fossil fuels due to their high energy density & relative low cost; generally growing energy demand to make the energy transition happen (e.g. mining consumes a lot of energy to get these (battery) metals out of the ground and process them) When you take all these considerations about a significant supply risks and still good demand outlook into account, investing in oil is a very good RR investment opportunity for the coming years, particularly when taking into account the current valuations of oil equities and their FCF generation potential. Think about it. ;)
I think this is a compelling line of thinking. I think it really hinges on being certain that capacity just isn’t there to ramp up production. Prisoners dilemma says that eventually when some suppliers can get short term profits by increasing supply, they will. So how certain can we really be that OPEC or others won’t find new reserves just in time to create a bunch of XLE bag holders? I won’t pretend to have any idea on the structural mechanics at play there.
@@mehhbles Despite the high oil prices and nice revenue for OPEC+ countries in 2021 and 2022, they also suffered a lot in the past years - remember, most OPEC+ countries need $75+ oil prices (even KSA) for a fiscal break even. This was hardly the case between 2014-21. Therefore, they also did not invest much in their own oil production capacity which is the reason why now most OPEC+ members (except for KSA and UAE) are not reaching their allowed production quota simply because they cant (despite the high prices). They are already producing at max. capacity. The mentioned OPEC spare capacity by Sven is highly overstated, and in the 2nd half of this year we will run out of all the spare capacity of OPEC! So these countries must first earn their bucks back to pay down some debt. And even if they find some new (conventional) reserves, it takes at least 5 years to develop a large oil field before you can start production. Lets also not forget that currently there is a shortage of labor and material (like steel pipes) in the oil sector limiting production growth ambitions as well. Due to the increased return hurdles and the high cost of capital, they require even higher oil prices when input costs rise as well. Another thing I did not mention in my first post is the fact that most US and canadian E&P companies have about 50% of their production (on a BOE basis) coming from natural gas (NG) and natural gas liquids (NGL). Their spot prices are also rising strongly. Here in Europe, they are currently trading at $32,6 per mmbtu which is the equivalent of $190 per barrel oil! In the US, these prices are much lower but now are also increasing due to strongly increasing LNG export to Europe and Asia. And from a long-term perspective, NG is even harder to substitute than oil, so long-term demand growth is almost certain for this commodity. The time of cheap energy is over for many years to come. This is not only due to the underinvestment in fossil fuels, but also due to the lower energy efficiency of renewables which not only consist of energy generation (solar, wind), but also require storage technologies (e.g. batteries, hydrogen, gravitational storage, etc.) often not taken into account when calculating the total LCOE of renewable energies.
I have dealt with and followed a lot of so called gurus and investment guides and learnt one thing. No one knows anything. By the time things become apparent to us mortals, it's usually too late.
A compliment from a Tesla investor who sold ARKK before it became a loss: I hate oil, but you explained the business / logic of cash flows in very comprehensive way. Not here to confirm my opinion, but staying curios and learn, Sven.
I've been buying a lot of oil stocks while they were out of favour precisely because of the negative ESG sentiment and the increasingly serious lack of new investment. As you say, you can wait for a better price to buy as there can always be some kind of upset (e.g. recession) - however, oil stocks also have two factors which also allow you to buy early: a very high yield and also many unexpected shocks can also increase prices (war, disasters, etc.). ESG + Covid + Russia/OPEC standoff probably created the perfect storm of under-investment.
Thank you for this helpful video and CVX analysis. CVX is one of the dividend stocks I bought in 2020. I was tempted to sell when the price hit the $170s a few months ago, because my unrealized gain was about 150%. I'm holding because I assume the price should be even higher in 5-10 years as supplies run out. But as you said, no one knows what will happen.
i really appreciate the content Sven provides and his honesty. I really wish there was like different options to the Stock Market Research Platform yearly sub. Maybe by monthly sub or a cheaper sub that allows fewer company in the analysis. But still there's a lot of free content and they are very nice :)
Very good video! I was begining to feel a little FOMO-ed :) But then I also remembered your old videos about OIL. So I'll stick with what I've got (transporters of oil and gas) and wait for the next drop in prices :)
I've been buying XOM since 2 years whenever it dips a couple of $. It's my most profitable position rn. I sold some when it went above $90, and still am over 30% green. I regret not buying Chevron too, but consider opening a position if the price dips below $150. I don't understand Cathy Woods' approach - we need oil not just for cars, in Europe there's still a huge demand for it in other sectors. Perhaps around 2050 we'll not need it so much, but that's still 30 years from now, 30 years of profits for oil/gas companies.
The nice thing about XOM is that it is a growth story too, they are planning to double cash flow within the next 5 years thanks to great investments in Guyana. If they can pull it off, that’s a x2 on the stock price right there… In addition they are making $11B FCF per quarter at current oil prices, so $44B per year for a market cap of $380B, that’s 11.5%, much cheaper than Chevron. I don’t know why Buffet did not consider XOM instead.
I added SHELL at an average price of 13,5. At 27 it’s is now 10% of the portfolio. If we get a 70’s scenario it probably is still a good hold otherwise the risk reward changed to much. I think selling is way harder than buying a stock
no need to waste my time, plus they have a huge loyal following, thus to much hate towards me, no need for bad karma. here and there I do a crazy stock they cover, that is enough!
It would be interesting to see a specialty retail stock analysis: Home Depot, Best Buy, Walmart, Target. Especially Best Buy which has a 4.08% dividend yield with a crash of almost 40% from the last peak.
While I like those boring companies. After the covid boom, I avoid these as the earnings have been flattered with stimulus checks and covid spending. I'd rather buy on reduced earnings if it is clear that demand was pulled forward and will be depressed for a few quarters/years.
alot of those companies profited from the covid times. now that is over things may be changing for them. some are still great companies... but will they retain the same profits?
@@Value-Investing something that I don’t understand is how easy it is to find stocks with a margin of safety of 50%. Even Buffett says that you are better buying wonderful businesses at a fair price
Hi Sven. I love your channel. Just a quick suggestion. Your discount rate is still the same as it was 2 years ago (10%). But back then, the interest rates were 0 and there was no inflation. The inflation is now 7-8% and the rates are up. Two years ago valuations expanded, now they are contracting cause the discount rates are higher. If you wish a 8% real yield, you need a discount rate of 15%, therefore your valuations are still a bit too high.
The real question is if this prices are going to continue at least 1Yr. I really think so. That's it because OPEC is struggling to increase production, low strategic reserves, china lockdown is not using fuel, demand is not going down (it will, but for example in Europe we are getting payback by governments when buying oil, so there's not destroying demand). Also Summer is oil intensive season. I'm playing it with some small caps with better valuations Hemisphere Energy (Canadian oil), Vaalco( African oil), Golar (infraestruxture for liquation LNG), KISTOS (European gas producer). Chepieest is Kistos PLC with 80%FCF y. Shipping also is really interesting right now, for example Textainer (box lessor) or Zim( Liner) Tankers are in low part of the cycle , they are giving a really interesting risk reword ( no position yet) BE CAREFUL WITH THIS INVESTMENS, THEY ARE CYCLICAL AND THE USE A LOT OF OPERATIVE LEVERAGE.
According to Vikki Hollub, the CEO of Oxy, she has never seen such a large imbalance between supply and demand in her 30 year career. She mentioned that it is very difficult to add supply because of all the supply chain disruptions. When Buffett read the Oxy annual report he said that he she was doing all the things that he would be doing. Josh Young seems to think that we may have higher prices for longer also just because we have underinvested in the oil space for the past 8 years.
Thanks for the great video. I also used Morningstar for financial data since their service was great but now they abandoned this 10 year history site. Where do you now go to find such data??? I am really desperate since I relied on this great website and all of a sudden Morningstar abolished it!!!
Sven could you record a video about Berkshire’s deal with Dominion Energy? It seems that after total takeover of the US railways (and destroying the possibility of civil transportation), next Warren’s bet is the takeover of the US energy infrastructure.
Sven what's your favourite Oil Stock? I checked all the major players and I see a lot of value in Petrobras! According to my research, PBR produced 33B$ cash flow from operation TTM (the same of Chevron), but is has 94B$ Market Cap instead of 329B$ Of Chevron! 😮
@@patat007 why not. It’s all opportunity costs to invest in one vs the other. Fb is trading legitimately at an energy stock valuation with a tiny fraction of the debt
Super video this. Great to see Sven back on solid ground with some of the stuff that he does best -- and better than pretty much anyone else on TH-cam -- after that Facebook debacle and some stuff on Cathie Wood that didn't really add much.
My oil, TSN and TAP have kept me in the green so far this year. There're still smaller oil producers out there that look good to me. That's where I'm nibbling now. If there's a nice pullback on OXY or the like, I'll throw some more there. Best of luck to us all.
I heard someone talk about lack of refining capacity. At least in America a few older refineries were shuttered during the pandemic. Businesses don't want to invest in new ones, or even refurbishing the old, because the payback period is 15 - 20 years and they have no visibility. I don't know if the same dynamic exists anywhere else in the world. But perhaps one risk to the oil producers is that demand destruction happens on the refined products side, while demand for crude is effectively capped by the total amount of refining capacity. I have no idea if this scenario is plausible.
It's too late for us normals to invest in oil and energy. Buffet works with a different criteria and it works for him, but not us little folks. We have to find something else now. Soon the Ukraine war will be settled and western countries won't be able to remove all the embargoes fast enough to secure their energy. Oil price will completely drop. Right now is absolutely the wrong time to buy.
I bought oil stocks quite heavily on autumn 2020. Now I am trying to find information and seeking for validation to exit all my positions. Definitely agree that it's not the time to buy anymore as prices soar, or at least the downside risk is getting big as we don't know how world affairs develop. I think it could be the time to start looking at the tech sector as "hype stocks" seem to be out of fashion like oil stocks were two years ago. Also some financials (TROW, BLK or JPM for example) have declined and seem interesting. Just a thought.
Agreed @TheBooban, people smarter than me can go ahead and chase cyclical energy going vertical. I got lucky flipping some late 2020, but I don't feel like getting rug pulled even if I miss upside.
@@GG-xj7tr Not going to pretend I am a genius. I've been down 40% on Shell for years and years. Oil dropped so I bought. But it was a falling knife. I am now finally up 20%. But not buying more or I'll be back down 40% again, lol.
@@mikorasilainen1271 I can't find anything to buy. My portfolio is rock steady during this crash, since only 10% is speculative. The good stocks are still expensive or keep going up. For me, what crash? Everything is normal.
@@TheBooban I find plenty to buy. I have been already stacking REIT sector, latest buy MPW (@17,80USD). Solid safe dividends with long term growth there. With more cash I would quite confidently stack O, WPC or maybe STOR. Those are indeed stress free long term holds in my opinion which are still at pre covid levels. I am not an expert but my understanding is that REITs seem to perform ok also during rising interest rates. Also many big names such as O, have tested recessions before like business as usual. I agree that many stocks still seem expensive, even after huge crash, but I think opportunities will emerge throughout the year.
Sven, go look at Australian Coal shares like Whitehaven Coal. Market Cap $5 billion, going to make $2 billion in free cash this year. No supply coming online due to ESG factors and there is huge demand from SE Asia as gas from Russia has been cut off and Indonesian coal has to deal with local politicians banning exports. They also supply 6000kcal coal which trades at a premium over 5000kcal coal as it is lower emissions in Japanese, South Korean and Taiwanese HELE plants which their govts have stated will operate until at least 2040.
@@Value-Investing the analysis is a little complex. You need to delve into the underlying numbers. They are buying back stock very quickly and making 75% gross margins with coal at 400USD/tonne and costs at 74AUD/tonne.
Sven, as a European investor we have to pay taxes on dividends, can you make a video on how paying 30% taxes on a say 5% or 6% dividend yield changes everything? As you see, investors have to "see if it fits their portfolio" and risk/reward requirements.
As a European investor, I pay 0 taxes on dividends. 0 taxes on capital gains. Not a special retirement account. My country no longer has such things. I feel sad for the rest of the world, but thank god my country did this.
Depends on what country you are from but try to look for W8-BEN form. US dividends by default are taxed by 30% this is the highest tax bracket in EU. Every country has different tax brackets for dividends so when you fill up W8-BEN form with your broker you will have dividends taxed by local tax in case of Czech republic 15% for example. I hope it helps.
hey Sven, i've been looking into getting into energy infrastructure as a more risk averse way of riding this commodity boom since like you said demand destruction and capex to increase supply will eventually lower oil prices hurting the bottom line of those companies way more than the still relatively underdeveloped infrastructure required to service the current demand. Any thoughts on those (I'm looking into AMLP as a basket to hedge any idiosyncratic risk)? Definitely feels like I would be getting into FOMO times like you said if I get into these oil producers right now even though buffet is getting in.
I bought several oil stocks back when oxy was $20. Oxy was not one of them, unfortunately! Can’t complain, though. Was starting to feel over exposed, until Feb 24. Am expecting to feel over exposed again once Ukraine defeats Russia.
Buffet missed the March 2020 buy. He sat out 2020 and 2021. Now prices are back to early 2021 and he is buying. He is just trying to make up for lost time
good evening dr. Carlin, I wanted to ask your thoughts on oil investments for example in emerging markets, companies like Petrochina they are not growing in price like american counterparts, thanks.
Hi Sven, always love your approach towards stocks. I noticed you made uranium videos years ago. Considering the geopoltical tensions ,inflation and how well O&G has been holding up in the markets, what's your updated take on nuclear energy? The sell off in uranium makes very little sense to me, since we are experiencing an energy crisis, so I gladly added some shares after the selloff.
Oxy was one of the many covid period buffett mistakes in my opinion..selling out of airlines (why the need), Costco (sold then went up massively), Wells Fargo (sold at multi year lows), restaurant brands (again zero need to sell-did he need the cash??). He could have bought oxy for peanuts 2 years ago and didn’t. Carl Icahn played this much better.
You appear to have ignored one of the main take aways. If Warren would have kept his preference shares thay would now be 5X but he was obviously not willing to risk being an ordinary share holder untill the company was secure. By selling he was agjusting for risk. Most investors would have just held and ignored the risk. This is why investors give him their money they know that Bershire is one of the strongest companies on earth
You have a short memory Mr. Caroline (the kid from East Europe) in 2020 the oil price was negative for few months. Doing the same video back than would have been stupid. Mr. Buffet moto is not loosing money he can make short term investments in huge sums of money and usually does not follow TH-camrs. On the contrary to Mrs. Woods who is follows by retail investors. Who are your odeance? Retail investors or professionals who do that for a living? Investing an a comodety ike oil is highly fluctuated and to my opinion not suited to retail investors
You should have bought both when they were cheap and everyone said gas is dead and EV is the future. With CVX and AZO at all time high tells you the truth about EV future.
I don't get it what is the point discussing oil when it is almost at all time highs, better find some value what is undervalued now and will soar in the future , that would be useful, this is useless. That is the best you can do?
U didn't answer my question. That what happened to price of share if there is no transactions? Or in others word no buyer. U said there would be buyer. But my question is hypothetical what if there is no buyer what happened to price of share? Could you please answer me
Hello Sven, thank you for your great ideas and videos. I have a question: From which site/app do your charts come, e.g. from CVX or OXY Thank you in advance
Why is Grantham and Dalio telling people it's a bubble and to sell when their institutional holdings just came out and they are both heavily buying? Same with Fidelity and Blackrock, more buying than selling. What they say to the public and what they actually do are the opposite.
Sven, I'm following you since 2018. I absolutely love your work. BUT... enough is enough... It is pronounced SAPPLY! And it's also pronounced SABSCRIBE! Jesus!!! Can't hear any more the words souply and soubscribe! I think I'm having a panik attack right now... Sorry.. Keep the good work! Cheers Mate!
This is a video worth watching twice -- I'd been wanting to see this kind of analysis for OXY, thanks!
THANKSSSSS
Yes, very helpful analysis
I liked your thoughts at the end about oil price volatility. I think volatility is one of the main themes of the oil industry.
I bought end of 2020 positions in Shell, BP, Exxon, Total and Gazprom.....and am very pleased.
I sold Exxon at 56 :🤕 still holding BP
thanks for sharing!
Amazing timing. Do you think we're at the top of the oil cycle now?
"Its easy to be a general after the battle"
I'm stealing that Sven
We have that saying saying in Albania but it goes ‘It’s easy to be brave after the fight/ battle’
@@Witnessmoo Haha very clever proverb.
@@Witnessmoo Same in Romania :)
:-))))
My Shell, BP, Scorpio Tankers, Exmar shares are saving me these days. Anything to do with oil and gas and the transport of it. I guess diversification does make sense when you have absolutely no idea what you are doing like me.
Same here Shell, Scorpio and Woodside saving my butt.
:-)))))
I think it became clear now, that it is not only about investing.....Buffet bought it additionally and foremost as an inflation hedge....oil price goes always hand in hand with inflation....just buy the biggest player in the local Permian Basin and you are safe on this direction.
thanks for sharing!
Ark has about the same hit rate as Cramer, Sven.
hahahaha
Thanks for the analysis. I heavily bought oxy last summer and now it is one of the few stocks with massive gains. Last week I started selling to buy cheap tech.
thanks for sharing!
This market decline has been an interesting experience for a lot of investors. They get to see firsthand the dangers of overvaluations, the effects of political risk, monetary policy and macro trends all at the same time. I can't speak for everyone but I've learned a lot of things from this experience. We've been in a bull market so long we've all forgotten how all these factors effect the capital markets.
@@MrVaSiLiN4iK This will make me an extremely patient investor going forward. I'm excited to wait for the bottom and create some nice generational wealth for myself and my family.
thanks for sharing!
The man is a genius. All I know in the next recession I know exactly where to swing my money.
:-)
Great video. I was in oil stocks since 2020 in a big way, but recently exited all positions. 2020-21 is when the easy money was made. The last year had many more obstacles. Recenlty I've been grappling with the dilemma you raised in the last minute or two of the video. And I more or less reached the same conclusion. Yes, there may be a commodity super cycle in the works but there is more downside risk to oil stocks due to elevated price and macro factors such as possible recession. Why fight the headwinds for maybe 10-25% upside in the next 6-12 months, I'd rather wait for a cheaper price. Despite the progress the industry has made with regard to "capital discipline", I don't see how one can do "buy and hold" in this environment (recession risk, possible Ukraine war resolution, more supply entering market etc.) and maintain their sanity :)
We get it, you made money
thanks for sharing!
My favourite investing channel!
thannks!
always a pleasure to see your videos pop up Sven! :)
Glad to hear that!
This guy Sven is the real deal . Fall 2020 he posted a video talking about how oil is on sale the valuation was very attractive. Since then oil has kicked the S&P 500’s behind.
thanks!
The cure for high prices in oil is high prices, because it boosts investment.., unless there are politicians that are blocking those investments with mere ideological measures.. as is in case of oil investments...
thanks for sharing!
Sven, I highly appreciate your content and your knowlege sharing. However, based on your analysis of the oil sector, I can conclude that oil ist not within your circle of competence. Let me explain why.
From a very high level, you are right that the oil market and price is ruled by supply and demand which leaded to boom and bust cycles in the past. However, these days it is worth to pay closer attention to the underlying dynamics, particularly of supply side:
- For more than 10 years, the global investments in long duration, conventional oil production (requiring large amounts of upfront CAPEX) have significantly declined. These usually need a 20-30 year planning horizon to get FID. The reasons are (1) the aftereffects of the global finacial crisis of 2008 where investors became less certain about future prospects and therefore shifted to short-term, unconvential production of oil (e.g. US shale oil boom) with faster payback but also much lower asset duration, and (2) due to the upcoming energy transition leading to a generally lower visibility for long-term demand of oil.
- The hypergrowth phase of US shale oil (which is the only reason why oil was so cheap in the past 8 years) has ended. Fueled by cheap growth capital from PE and Wall Street, unsustainably high negative Free Cashflows were accumulated over the past 10+ years culminating in the oil price crash in 2020. As a consequence, most (burned) investors left the sector leading to very high cost of capital for the remaining players and general capital scarcity.
- Due to the last 2 US shale oil revolutions, the best spots with the highest efficiencies were already drilled. The inventory of Tier 1 drilling sites is shrinking rapidly resulting in higher future investments to extract the same amount of oil = worse ROI at stable prices.
- On top of these factors, ESG started to become a very important factor in the recent years which is additionally weighing on capital availability and cost of capital increases.
- Fueled by all these reasons mentioned above, the exploration and finding of new potential oil field is currently at a multi-decade low
These are the factors that negativly influenced the supply side before the russion invasion and therefore pointed towards a restricted supply side in the coming years. Then Russia attacked Ukraine and the West responded with strong and potentially long-lasting sanctions. This added another significant supply side risk on top of an already very tight oil market with quickly falling investories. Since Russia is an important oil exporter, a large part of these barrels will disappear from the global market for years to come. And even if Russia will get back, the current shortfall of income will inevitably lead to lower russian oil production in the future.
This incident was also for WB the final trigger to invest heavily in the oil sector. We should also not forget that, despite the run in oil equities, they are still trading at the lowest ever recorded valuations on a FCF yield basis. At the end of this year, most of these companies have almost fully delevered their balance sheet and then plan to return the excess FCF (after maintenance CAPEX) completely to their shareholders instead of reinvesting it in production growth.
To conclude what was said:
- There is a structural underinvestment in the sector due to (1) unclear long-term oil demand outlook, (2) burned investors due to stupid US shale hypergrowth in 2010-20, (3) ESG pressure driving cost of capital up and making available capital scarce
- Geopolitically induced supply reduction due to sanctions on Russian with (quite probably) long-term duration and impact
- Record-low valuations of oil equities at current oil and gas prices while balance sheets are quickly delevered and companies pledge to return excess FCF to shareholders instead of reinvesting in growing production (= "indemnification" for the past years of cash burning)
On the demand side, you mentioned already the key drivers there: growing global population; strongly growing middle class in Asia; slower than expected subsitution of fossil fuels due to their high energy density & relative low cost; generally growing energy demand to make the energy transition happen (e.g. mining consumes a lot of energy to get these (battery) metals out of the ground and process them)
When you take all these considerations about a significant supply risks and still good demand outlook into account, investing in oil is a very good RR investment opportunity for the coming years, particularly when taking into account the current valuations of oil equities and their FCF generation potential. Think about it. ;)
I think this is a compelling line of thinking. I think it really hinges on being certain that capacity just isn’t there to ramp up production. Prisoners dilemma says that eventually when some suppliers can get short term profits by increasing supply, they will. So how certain can we really be that OPEC or others won’t find new reserves just in time to create a bunch of XLE bag holders? I won’t pretend to have any idea on the structural mechanics at play there.
@@mehhbles Despite the high oil prices and nice revenue for OPEC+ countries in 2021 and 2022, they also suffered a lot in the past years - remember, most OPEC+ countries need $75+ oil prices (even KSA) for a fiscal break even. This was hardly the case between 2014-21. Therefore, they also did not invest much in their own oil production capacity which is the reason why now most OPEC+ members (except for KSA and UAE) are not reaching their allowed production quota simply because they cant (despite the high prices). They are already producing at max. capacity. The mentioned OPEC spare capacity by Sven is highly overstated, and in the 2nd half of this year we will run out of all the spare capacity of OPEC! So these countries must first earn their bucks back to pay down some debt.
And even if they find some new (conventional) reserves, it takes at least 5 years to develop a large oil field before you can start production. Lets also not forget that currently there is a shortage of labor and material (like steel pipes) in the oil sector limiting production growth ambitions as well. Due to the increased return hurdles and the high cost of capital, they require even higher oil prices when input costs rise as well.
Another thing I did not mention in my first post is the fact that most US and canadian E&P companies have about 50% of their production (on a BOE basis) coming from natural gas (NG) and natural gas liquids (NGL). Their spot prices are also rising strongly. Here in Europe, they are currently trading at $32,6 per mmbtu which is the equivalent of $190 per barrel oil! In the US, these prices are much lower but now are also increasing due to strongly increasing LNG export to Europe and Asia. And from a long-term perspective, NG is even harder to substitute than oil, so long-term demand growth is almost certain for this commodity.
The time of cheap energy is over for many years to come. This is not only due to the underinvestment in fossil fuels, but also due to the lower energy efficiency of renewables which not only consist of energy generation (solar, wind), but also require storage technologies (e.g. batteries, hydrogen, gravitational storage, etc.) often not taken into account when calculating the total LCOE of renewable energies.
Sven prides himself on being PhD and not a youtuber... this will take time for a reply
I know that, I just wait for my kind or risk and reward as said in the video!
I love my Aker BP investment. got them at a bargain in 2020:)
thanks for sharing!
I have dealt with and followed a lot of so called gurus and investment guides and learnt one thing. No one knows anything. By the time things become apparent to us mortals, it's usually too late.
Indeed. The more I watch videos like this, I become more aware of the huge gaps in my knowledge
@@andypicken7848 yes it's frustrating actually :((
that is correct! Nobody knows, we just need to think and find what is best for us. It all starts by understanding one's greed first!
A compliment from a Tesla investor who sold ARKK before it became a loss: I hate oil, but you explained the business / logic of cash flows in very comprehensive way. Not here to confirm my opinion, but staying curios and learn, Sven.
Another person bragging on the comments about how they made money 🙄
thanks for sharing
The best signal to but oil companies was negative oil. Needed nerves of steel to do it. But it was the green light
Oil companies hit even lower at October-November 2020. I bought Shell at 12£ in May 2020 and 8.5£ in October 2020. Sold for 19.5£ recently.
@@Dimitris_1987 I kept buying stock then.
thanks for sharing
I've been buying a lot of oil stocks while they were out of favour precisely because of the negative ESG sentiment and the increasingly serious lack of new investment. As you say, you can wait for a better price to buy as there can always be some kind of upset (e.g. recession) - however, oil stocks also have two factors which also allow you to buy early: a very high yield and also many unexpected shocks can also increase prices (war, disasters, etc.). ESG + Covid + Russia/OPEC standoff probably created the perfect storm of under-investment.
that is the risk reward!
Thank you for this helpful video and CVX analysis. CVX is one of the dividend stocks I bought in 2020. I was tempted to sell when the price hit the $170s a few months ago, because my unrealized gain was about 150%. I'm holding because I assume the price should be even higher in 5-10 years as supplies run out. But as you said, no one knows what will happen.
time will tell :-)
@@Value-Investing Yes, we will see :]
Argomento veramente interessante druze Sven, grazie per il servizio
grazie mille!
Have you considered reviewing the iron and steel stocks? SID down from $10 to 3!
already!!!! I have seen Rio getting close to value on my table, but didn't expect that fast! th-cam.com/video/1Xj-hsSe0F4/w-d-xo.html
Occidental has been flat for two years now. Worth an update!
we need an oil price crash to look at oil again
i really appreciate the content Sven provides and his honesty. I really wish there was like different options to the Stock Market Research Platform yearly sub. Maybe by monthly sub or a cheaper sub that allows fewer company in the analysis. But still there's a lot of free content and they are very nice :)
thanks for the idea, maybe, we'll see!
Very good video! I was begining to feel a little FOMO-ed :) But then I also remembered your old videos about OIL.
So I'll stick with what I've got (transporters of oil and gas) and wait for the next drop in prices :)
thanks!
I've been buying XOM since 2 years whenever it dips a couple of $. It's my most profitable position rn. I sold some when it went above $90, and still am over 30% green. I regret not buying Chevron too, but consider opening a position if the price dips below $150. I don't understand Cathy Woods' approach - we need oil not just for cars, in Europe there's still a huge demand for it in other sectors. Perhaps around 2050 we'll not need it so much, but that's still 30 years from now, 30 years of profits for oil/gas companies.
The nice thing about XOM is that it is a growth story too, they are planning to double cash flow within the next 5 years thanks to great investments in Guyana. If they can pull it off, that’s a x2 on the stock price right there… In addition they are making $11B FCF per quarter at current oil prices, so $44B per year for a market cap of $380B, that’s 11.5%, much cheaper than Chevron. I don’t know why Buffet did not consider XOM instead.
@@zekevfab He puts a lot of emphasis on the quality of management. Might be why.
thanks for sharing
I added SHELL at an average price of 13,5. At 27 it’s is now 10% of the portfolio. If we get a 70’s scenario it probably is still a good hold otherwise the risk reward changed to much. I think selling is way harder than buying a stock
Selling is easier than buying.
I like selling more than buying.
thanks for sharing!
Hi Sven. Please do a video reacting to all these finance youtubers that don't know anything about investing and are just in it for the views and hype.
no need to waste my time, plus they have a huge loyal following, thus to much hate towards me, no need for bad karma. here and there I do a crazy stock they cover, that is enough!
It would be interesting to see a specialty retail stock analysis: Home Depot, Best Buy, Walmart, Target. Especially Best Buy which has a 4.08% dividend yield with a crash of almost 40% from the last peak.
Yes! Those boring companies are great!
While I like those boring companies. After the covid boom, I avoid these as the earnings have been flattered with stimulus checks and covid spending. I'd rather buy on reduced earnings if it is clear that demand was pulled forward and will be depressed for a few quarters/years.
alot of those companies profited from the covid times. now that is over things may be changing for them. some are still great companies... but will they retain the same profits?
thanks for sharing!
Petrobras !
thanks for suggesting
Thanks Sven, great video, as always! At the end of the day, it’s always about the cash flow and the price you pay.
yep!
Indeed!
I like oil. Not only oil but all stocks that produce tangible assets. It can be railway, chemical industry, etc
that is BRK,
@@Value-Investing something that I don’t understand is how easy it is to find stocks with a margin of safety of 50%. Even Buffett says that you are better buying wonderful businesses at a fair price
Great video Sven. I made tons of money on your commodity videos in 2020. Can you analyse Petrobras perhaps?
thanks for suggesting, but the company is too political for me
Ppl apparently will need oil for automobiles
What does Buffett know ,that we haven't been told !?
hahahaha
Best thing about your content that is straight to the point. Subed
thanks and welcome!
Hi Sven.
I love your channel.
Just a quick suggestion. Your discount rate is still the same as it was 2 years ago (10%). But back then, the interest rates were 0 and there was no inflation.
The inflation is now 7-8% and the rates are up. Two years ago valuations expanded, now they are contracting cause the discount rates are higher. If you wish a 8% real yield, you need a discount rate of 15%, therefore your valuations are still a bit too high.
it is for comparative reasons first, thus the rate doesn't really matter, only the comparative result where you pick the best
The real question is if this prices are going to continue at least 1Yr. I really think so. That's it because OPEC is struggling to increase production, low strategic reserves, china lockdown is not using fuel, demand is not going down (it will, but for example in Europe we are getting payback by governments when buying oil, so there's not destroying demand). Also Summer is oil intensive season.
I'm playing it with some small caps with better valuations
Hemisphere Energy (Canadian oil), Vaalco( African oil), Golar (infraestruxture for liquation LNG), KISTOS (European gas producer).
Chepieest is Kistos PLC with 80%FCF y.
Shipping also is really interesting right now, for example Textainer (box lessor) or Zim( Liner)
Tankers are in low part of the cycle , they are giving a really interesting risk reword ( no position yet)
BE CAREFUL WITH THIS INVESTMENS, THEY ARE CYCLICAL AND THE USE A LOT OF OPERATIVE LEVERAGE.
anything can happen, my idea is to look for low risk high reward, nothing else
According to Vikki Hollub, the CEO of Oxy, she has never seen such a large imbalance between supply and demand in her 30 year career. She mentioned that it is very difficult to add supply because of all the supply chain disruptions. When Buffett read the Oxy annual report he said that he she was doing all the things that he would be doing. Josh Young seems to think that we may have higher prices for longer also just because we have underinvested in the oil space for the past 8 years.
could be, thanks for sharing
Thanks for the great video. I also used Morningstar for financial data since their service was great but now they abandoned this 10 year history site. Where do you now go to find such data??? I am really desperate since I relied on this great website and all of a sudden Morningstar abolished it!!!
I think I'll be using this from now on, just put in the ticker and you have all the financials: app.tikr.com/markets?ref=rswxs1&fid=1#
@@Value-Investing And are you using the Free, Plus or Pro version?
I prefer to play the possible commodity supercycle with basic metals, much less popular now than energy and agriculture
thanks for sharing!
Thank you Sven.
My pleasure!
Always very interesting topics! Thanks Sven!
Glad you think so!
Sven could you record a video about Berkshire’s deal with Dominion Energy? It seems that after total takeover of the US railways (and destroying the possibility of civil transportation), next Warren’s bet is the takeover of the US energy infrastructure.
??? I think he doesn't own the total thing in both sectors
Sven what's your favourite Oil Stock? I checked all the major players and I see a lot of value in Petrobras! According to my research, PBR produced 33B$ cash flow from operation TTM (the same of Chevron), but is has 94B$ Market Cap instead of 329B$ Of Chevron! 😮
I have no favorite at the moment!
When FB is trading at a the same fcf yield as Chevron it’s time to really think about how much further energy stocks can go.
I was thinking the same. When you look at Shell revenues its comparable to Apple.
Lol. You can't compare these 2 companies.
@@patat007 why not. It’s all opportunity costs to invest in one vs the other. Fb is trading legitimately at an energy stock valuation with a tiny fraction of the debt
hahah, good one!
I am loving all the videos Sven!
Happy to hear that!
Great explanation !
Glad you liked it!
Super video this. Great to see Sven back on solid ground with some of the stuff that he does best -- and better than pretty much anyone else on TH-cam -- after that Facebook debacle and some stuff on Cathie Wood that didn't really add much.
thanks for commenting
My oil, TSN and TAP have kept me in the green so far this year.
There're still smaller oil producers out there that look good to me. That's where I'm nibbling now. If there's a nice pullback on OXY or the like, I'll throw some more there.
Best of luck to us all.
thanks for sharing
I heard someone talk about lack of refining capacity. At least in America a few older refineries were shuttered during the pandemic. Businesses don't want to invest in new ones, or even refurbishing the old, because the payback period is 15 - 20 years and they have no visibility. I don't know if the same dynamic exists anywhere else in the world. But perhaps one risk to the oil producers is that demand destruction happens on the refined products side, while demand for crude is effectively capped by the total amount of refining capacity. I have no idea if this scenario is plausible.
it is one of the theses, we will see how it develops!
Hello Sven! What’s your opinion on Exxon mobile ? Are you sticking with the energy sector??
have to update on the sector!
Nice to have top quality analysis like this thanks!!
thanks!
@@Value-Investing what are your favorite stocks ? I am in google and rio Tinto.
Sven, I have zero desire to invest in oil and I still enjoyed the video a ton. Thanks
Glad you enjoyed it!
It's too late for us normals to invest in oil and energy. Buffet works with a different criteria and it works for him, but not us little folks. We have to find something else now.
Soon the Ukraine war will be settled and western countries won't be able to remove all the embargoes fast enough to secure their energy. Oil price will completely drop. Right now is absolutely the wrong time to buy.
I bought oil stocks quite heavily on autumn 2020. Now I am trying to find information and seeking for validation to exit all my positions. Definitely agree that it's not the time to buy anymore as prices soar, or at least the downside risk is getting big as we don't know how world affairs develop.
I think it could be the time to start looking at the tech sector as "hype stocks" seem to be out of fashion like oil stocks were two years ago. Also some financials (TROW, BLK or JPM for example) have declined and seem interesting. Just a thought.
Agreed @TheBooban, people smarter than me can go ahead and chase cyclical energy going vertical. I got lucky flipping some late 2020, but I don't feel like getting rug pulled even if I miss upside.
@@GG-xj7tr Not going to pretend I am a genius. I've been down 40% on Shell for years and years. Oil dropped so I bought. But it was a falling knife. I am now finally up 20%. But not buying more or I'll be back down 40% again, lol.
@@mikorasilainen1271 I can't find anything to buy. My portfolio is rock steady during this crash, since only 10% is speculative. The good stocks are still expensive or keep going up. For me, what crash? Everything is normal.
@@TheBooban I find plenty to buy. I have been already stacking REIT sector, latest buy MPW (@17,80USD). Solid safe dividends with long term growth there. With more cash I would quite confidently stack O, WPC or maybe STOR. Those are indeed stress free long term holds in my opinion which are still at pre covid levels. I am not an expert but my understanding is that REITs seem to perform ok also during rising interest rates. Also many big names such as O, have tested recessions before like business as usual.
I agree that many stocks still seem expensive, even after huge crash, but I think opportunities will emerge throughout the year.
Oil stocks did well in the 1970’s with 10 years of inflation. If inflation is here to stay….
time will tell!
Sven, go look at Australian Coal shares like Whitehaven Coal. Market Cap $5 billion, going to make $2 billion in free cash this year. No supply coming online due to ESG factors and there is huge demand from SE Asia as gas from Russia has been cut off and Indonesian coal has to deal with local politicians banning exports.
They also supply 6000kcal coal which trades at a premium over 5000kcal coal as it is lower emissions in Japanese, South Korean and Taiwanese HELE plants which their govts have stated will operate until at least 2040.
thanks for suggesting!
@@Value-Investing the analysis is a little complex. You need to delve into the underlying numbers.
They are buying back stock very quickly and making 75% gross margins with coal at 400USD/tonne and costs at 74AUD/tonne.
Great video. Are Todd and Ted buying more Stone and SnowFlake? Uncle Warren and Charlie are the g.o.a.t!!
:-))) video out today
Hello, how fractional share system works in investing in stock market?
If I´d listened to Sven in 2020 and bought Occidental and Chevron, I´d be a rich man :/
Sven, as a European investor we have to pay taxes on dividends, can you make a video on how paying 30% taxes on a say 5% or 6% dividend yield changes everything? As you see, investors have to "see if it fits their portfolio" and risk/reward requirements.
As a European investor, I pay 0 taxes on dividends. 0 taxes on capital gains. Not a special retirement account. My country no longer has such things. I feel sad for the rest of the world, but thank god my country did this.
Depends on what country you are from but try to look for W8-BEN form. US dividends by default are taxed by 30% this is the highest tax bracket in EU. Every country has different tax brackets for dividends so when you fill up W8-BEN form with your broker you will have dividends taxed by local tax in case of Czech republic 15% for example.
I hope it helps.
there are different taxes on capital gains in different countries. It would have to be a long video...
just include that in your calculation, decrease the dividend and see the value for you!
Petrobras is paying a 40% dividend right now. Value or Value trap?
40%???? that is high
If Buffet owns it then I dont mind owning it, i just want to make sure i dont pay more than 20% over what Buffet paid
:-)
hey Sven, i've been looking into getting into energy infrastructure as a more risk averse way of riding this commodity boom since like you said demand destruction and capex to increase supply will eventually lower oil prices hurting the bottom line of those companies way more than the still relatively underdeveloped infrastructure required to service the current demand. Any thoughts on those (I'm looking into AMLP as a basket to hedge any idiosyncratic risk)? Definitely feels like I would be getting into FOMO times like you said if I get into these oil producers right now even though buffet is getting in.
don't know enough about those!!!
Good day fellow investors!
Good day fellow investor!!!
What cause the 14 billions loss of oxy in 2020? CEO say their break even cost at $40
Thanks Sven
thank you!
Warren the mvp
:-)))
Why does EVERYONE, when rolling through the customary beg for video interaction, insist on saying "Smash the like"?
ahahaha, they say it helps the channel :-)
I would like the channel more without being told to like it
I sold Shell shares this week, a good time to get out of oil.
Kudos, I did the same with my ExxonMobil stock.
thanks for sharing!
HI Sven, Can You take a look at ACTG, market cap it’s lower than cash - total Liabilities
thanks for sharing
Warren Buffet should have listen to you as you suggest to buy much cheaper ;-)
True!
Hey Sven, how about a review of some banks... they seem so cheap. esp UK banks: Barclays and Lloyds (BCS & LYG)
not really a specialist on banks :-(
I bought several oil stocks back when oxy was $20. Oxy was not one of them, unfortunately! Can’t complain, though. Was starting to feel over exposed, until Feb 24. Am expecting to feel over exposed again once Ukraine defeats Russia.
🙄
thanks for sharing
If bankruptcy risk was the reason Buffett did not buy OXY at the low, how do you explain Buffett not buying CVX at the low?
likely no bankruptcy issues there :-)))
Thanks Sven. 👍🏻
Thank you!!!
Sven do you have any thoughts on Blackrock the US asset manager? Thanks for another great video.
thanks for suggesting!
Buffet missed the March 2020 buy.
He sat out 2020 and 2021.
Now prices are back to early 2021 and he is buying.
He is just trying to make up for lost time
could be
2 years ago I thought occidental might go bankrupt, so sold all my stock.
that is why it is now up so much!
@@Value-Investing yeah, its up like 6 times from where I sold it. Lost A LOT of money. Should have just left it alone. Hindsight is 20/20.
good evening dr. Carlin, I wanted to ask your thoughts on oil investments for example in emerging markets, companies like Petrochina they are not growing in price like american counterparts, thanks.
thanks for suggesting
Hi Sven, always love your approach towards stocks. I noticed you made uranium videos years ago. Considering the geopoltical tensions ,inflation and how well O&G has been holding up in the markets, what's your updated take on nuclear energy? The sell off in uranium makes very little sense to me, since we are experiencing an energy crisis, so I gladly added some shares after the selloff.
not really simple enough for me, so I stay away no matter what!
very helpful analysis indeed
have you any toughts on Equinor or Aker Bp?
haven't analyzed! :-(
Good video Sven
thanks!
I have oil and gas ETF
Oxy was one of the many covid period buffett mistakes in my opinion..selling out of airlines (why the need), Costco (sold then went up massively), Wells Fargo (sold at multi year lows), restaurant brands (again zero need to sell-did he need the cash??). He could have bought oxy for peanuts 2 years ago and didn’t. Carl Icahn played this much better.
You appear to have ignored one of the main take aways.
If Warren would have kept his preference shares thay would now be 5X but he was obviously not willing to risk being an ordinary share holder untill the company was secure.
By selling he was agjusting for risk.
Most investors would have just held and ignored the risk.
This is why investors give him their money they know that Bershire is one of the strongest companies on earth
of course, but at the end he is Buffett while the rest of us isn't!
Oil isn't going to be replaced anytime soon. Renewables are still extremely expensive and not a viable option for many non-developed countries.
thanks for sharing
agreed!!
Sven, what are you buying at the moment???
furniture
You have a short memory Mr. Caroline (the kid from East Europe) in 2020 the oil price was negative for few months. Doing the same video back than would have been stupid.
Mr. Buffet moto is not loosing money he can make short term investments in huge sums of money and usually does not follow TH-camrs. On the contrary to Mrs. Woods who is follows by retail investors. Who are your odeance? Retail investors or professionals who do that for a living?
Investing an a comodety ike oil is highly fluctuated and to my opinion not suited to retail investors
I am happy to disagree with you :-) Oil is a necessity, thus at the right price it is a low risk high reward, which is always for retail investors
@@Value-Investing Great so we both agree to disagree 😉
You should have bought both when they were cheap and everyone said gas is dead and EV is the future. With CVX and AZO at all time high tells you the truth about EV future.
thanks for sharing!
I wonder if the war in the middle east will spike oil prices.
that is what happens usually with wars!
What is the company's who own the tankers or lease tankers? Zim.who else?
don;t know
I don't get it what is the point discussing oil when it is almost at all time highs, better find some value what is undervalued now and will soar in the future , that would be useful, this is useless. That is the best you can do?
This is a channel about education, so I discuss things! As for you, I hope you sort out your life and the issues you have. Good bye!
Steal some pears by taking a look at kistos plc. Andrew austin rules!
thanks for sharing
U didn't answer my question. That what happened to price of share if there is no transactions? Or in others word no buyer. U said there would be buyer. But my question is hypothetical what if there is no buyer what happened to price of share? Could you please answer me
This almost always happens with illiquid shares.you can't sell shares unless a buyer arrives
Price of the share is last negotiated price. If no one buys, price stays the same
I don't know, I prefer the real world to hypothetical issues
Grazie Sven….ottima analisi. Cosa ne pensi invece di HP, altro acquisto recente di Buffet.?
ne abbiamo gia parlato un paio di mesi fa, ma ne riparlero parlando del 13F di Buffett
Thanks Sven, don't you think oil price demand and price will fall when we enter the recession?
that can happen too, did you watch the whole video?
@@Value-Investing i did only my English is not the best. I will listen more carefully, thanks.
Hello Sven, thank you for your great ideas and videos. I have a question: From which site/app do your charts come, e.g. from CVX or OXY Thank you in advance
morningstar and stock price is google
Why is Grantham and Dalio telling people it's a bubble and to sell when their institutional holdings just came out and they are both heavily buying? Same with Fidelity and Blackrock, more buying than selling. What they say to the public and what they actually do are the opposite.
don't know, there is inflation that might be the game changer / there is real and nominal returns to discuss.
Sven, I'm following you since 2018. I absolutely love your work. BUT... enough is enough... It is pronounced SAPPLY! And it's also pronounced SABSCRIBE! Jesus!!! Can't hear any more the words souply and soubscribe! I think I'm having a panik attack right now... Sorry.. Keep the good work! Cheers Mate!
hahahah,