Insider Newsletter: Issue #328

Issue #328 of the Insider Newsletter is live today. But before you scroll down to it, I want to give you some context...because what’s inside this issue doesn’t make full sense without understanding what led up to it.

So. A brief history.

The Thesis Has Been Building for a While

Back in March, we published a piece called ”The Glut Was a Lie”...a detailed takedown of the consensus view that global oil markets were oversupplied. The IEA’s own field-level data told a completely different story. Shale decline rates of 35% per year. Conventional field decline at 5.6% annually across 15,000 fields studied. The “glut” was a narrative. The supply deficit was structural.

A week later, we followed up with a piece arguing that the Middle East escalation was not a black swan...it was a consequence. The portfolio was already positioned. We said the real risk wasn’t the bombs. The real risk was sitting in cash while governments debased their currencies to pay for the war.

We also flagged something that doesn’t get talked about nearly enough: the global supply chain has been running on just-in-time inventory management for decades. Optimised to the bone. Great for margins. Catastrophic when the flow gets disrupted. We said the shift from just-in-time to just-in-case was coming...and that it would permanently alter demand for commodities across the board.

Then in April we published ”The Toll Booth”...a deep look at the Strait of Hormuz closure, the petrodollar crack mechanics underneath it, and why stagflation wasn’t a risk at that point...it was a certainty.

Each of these pieces was building toward something. Issue #328 is where it starts to show up in the numbers.

The Portfolios Are Diverging

Over the past twelve months, both our Asymmetric Strategy and our Dividend Strategy have significantly outperformed the S&P 500. The gap is widening, not narrowing. And we believe this is not a short-term blip driven by oil price moves. It’s the early stage of a structural rotation that will play out over years...possibly a decade.

The S&P 500 energy sector, as a percentage of the index, sits at the same relative lows it reached at the peak of the dot-com bubble in 2000. Using Exxon as a long-run proxy, the energy sector relative to the broader market is as unloved as it has been at any point in the last fifty years. Financial journalists barely mention it. The average investor has concluded it’s “uninvestable.”

Whowouldathunkit.

The Part the Market Hasn’t Priced Yet

There’s a detail in Issue #328 that most people will read right past, and they really shouldn’t.

Everyone’s talking about “clearing the Strait of Hormuz.” As if the strait is the only problem. It isn’t. The Persian Gulf itself is largely un-navigable for Very Large Crude Carriers. Most of it is too shallow for VLCCs to operate in. And the navigable deep-water channel...runs right along the Iranian coastline.

In other words, even if the Strait were cleared tomorrow, the Gulf does not simply reopen. Shipping lanes that trace the Iranian coast cannot be used freely under active conflict conditions. This is a detail that changes the recovery timeline considerably. Qatar has already declared force majeure on LNG contracts for up to five years. Roughly 12.8 million tons per year of LNG capacity is offline. Some $20 billion in annual revenue, gone. Production restarts require not just a ceasefire...but physical infrastructure repair, well assessment, and resumed tanker routes. We’re talking 12 months minimum, and that’s the optimistic scenario.

The market is not pricing this.

Stock, Flow, and Hope

Inside Issue #328, we revisit a framework that cuts to the heart of where capital should be positioned right now. Think of any business: it runs on stock (what you have), flow (what keeps coming in), and hope (what you imagine might arrive one day). For forty years, global markets have been repricing hope upward and stock downward. The Nasdaq is filled with companies valued almost entirely on hope. OpenAI has never turned a profit. The Bloomberg World Commodity Producer Index relative to the Nasdaq tells you everything you need to know about where the mispricing is.

You can replicate that trade with GUNR relative to QQQ. We’ve discussed this before. But what’s different now is that the hope-to-stock repricing is no longer just a valuation story. It’s being forced by physical reality.

What Else Is in This Issue

Issue #328 also covers the eerie structural parallels between the Covid response and a newly announced fuel rationing plan...the geopolitical incentives keeping this war going longer than most care to admit...a thoughtful look at the energy security pivot happening in real time across Australia and Southeast Asia...and five deep-value ideas in the Big Five that we believe have the potential for 300% or more. These are not for the faint of heart, and they’re gated behind the Insider Newsletter Service for a reason. If you want the full research and actual portfolio allocation guidance, that lives at capitalistexploits.at.

For everyone else...the newsletter below is a good start. Let’s get started.