WEBVTT - `I Need a Solid Panic’ 0:00:15.080 --> 0:00:18.480 Hello, and welcome to What comes Up a weekly markets podcast. 0:00:18.600 --> 0:00:20.720 My name is Mike Reagan. I'm a senior editor at 0:00:20.720 --> 0:00:24.120 Bloomberg and I'm Aldana Higher across asset reporter with Bloomberk. 0:00:24.440 --> 0:00:27.000 And this week on the show, well the ink was 0:00:27.120 --> 0:00:30.600 barely dry on all those headlines saying that the SMP 0:00:30.720 --> 0:00:33.680 five was in a bear market last week and then 0:00:33.680 --> 0:00:35.840 it began to rebound a bit, and we never did 0:00:35.920 --> 0:00:39.879 get a closing price that was or more below the 0:00:39.920 --> 0:00:44.120 indexes last record in January. So was that it bear 0:00:44.200 --> 0:00:47.720 market canceled and the loads are in? Well maybe not. 0:00:47.880 --> 0:00:50.040 We'll talk with the chief investment officer who was not 0:00:50.120 --> 0:00:52.120 so sure, and thanks that we're in store for a 0:00:52.159 --> 0:00:55.880 bit of a cruel summer for stocks. But first, Viltanna, 0:00:56.000 --> 0:00:58.080 I need to let the listeners know that you're actually 0:00:58.080 --> 0:01:00.600 in jolly old England as as we speak. Yep, I'm 0:01:00.600 --> 0:01:03.960 in London. How's that going. I'm having a lot of fun. 0:01:04.120 --> 0:01:08.440 The Bloomberg office is so huge and it just looks 0:01:08.480 --> 0:01:10.679 like it's never ending. So I just keep getting lost 0:01:11.200 --> 0:01:13.240 and running into the same people over and over and 0:01:13.240 --> 0:01:15.480 asking them for help, and they're like, I already told you. 0:01:15.480 --> 0:01:17.320 I can't help you, So then I just keep moving 0:01:17.319 --> 0:01:19.200 on to the next person and the next person and 0:01:19.240 --> 0:01:22.120 the next person, and I never never ever find my desks. 0:01:22.240 --> 0:01:24.080 That's kind of like how you are in New York too, 0:01:24.120 --> 0:01:28.760 though even worse here. Honestly, I'm just wandering around all 0:01:28.800 --> 0:01:31.759 the time, like on the streets, in the office, the mess. 0:01:33.160 --> 0:01:35.199 But I'm having a lot of fun. Those friendly Brits, 0:01:35.200 --> 0:01:37.640 I'm sure are staring in the right direction. But then 0:01:37.640 --> 0:01:40.920 I gotta say, we did get two more reviews in 0:01:41.120 --> 0:01:44.000 of the podcast on Apple Podcast. I don't know your 0:01:44.000 --> 0:01:47.160 coercion strategies work. It is. Let me just read this 0:01:47.200 --> 0:01:50.040 one to you. Five stars to vill Donna for keeping 0:01:50.080 --> 0:01:52.760 Mike and check. I don't know what that means. I 0:01:52.760 --> 0:01:56.920 don't know what that that's referring to great podcast, one 0:01:56.960 --> 0:01:59.480 of my favorites. They also volunteered to be a tour 0:01:59.520 --> 0:02:01.320 guide to either of us if we are ever in 0:02:01.360 --> 0:02:03.480 San Diego. I could use that a few weeks ago. 0:02:03.640 --> 0:02:06.440 But I love San Diego. It's my number one favorite 0:02:06.480 --> 0:02:09.120 city in the world. I think number one. Yeah, you 0:02:09.160 --> 0:02:11.760 know why, because this person just gave you five stars. 0:02:12.320 --> 0:02:15.160 That's right now. I'm just kidding because it's sunny three 0:02:15.560 --> 0:02:18.680 sixty five days, or you know, like Rains wants me 0:02:19.080 --> 0:02:22.160 one day, yere exactly. Yeah, that's pretty good. And a 0:02:22.200 --> 0:02:24.280 second one came in It said, wait a second, do 0:02:24.360 --> 0:02:26.880 we know vol Donna's high school nickname yet? And the 0:02:26.880 --> 0:02:30.400 answer is not yet. I'm worried that your nickname might 0:02:30.440 --> 0:02:33.919 be a little boring. So I'm gonna if it's stretch 0:02:34.040 --> 0:02:36.359 this out. If it's too boring, I'm gonna offer the 0:02:36.440 --> 0:02:40.840 nickname that the transcription service offers for you, really good 0:02:40.880 --> 0:02:44.359 software we used to transcribe the podcast because they're they're 0:02:44.360 --> 0:02:47.480 they're pretty good. They're really really good and just for you, 0:02:47.520 --> 0:02:51.440 my crazy thing this week is is British themed, So 0:02:51.560 --> 0:02:54.480 just throwing that out there for you. Okay, but um 0:02:54.560 --> 0:02:57.480 let's bring in our guest. I'm excited to meet her. Yeah, 0:02:57.560 --> 0:02:59.919 it's Victoria Green. She's the founding partner in chief and 0:03:00.000 --> 0:03:03.440 investment officer G Squared Private Wealth. Victoria, thank you so 0:03:03.520 --> 0:03:06.640 much for joining us. Absolutely, I was laughing because I 0:03:06.680 --> 0:03:09.040 definitely need a GPS to get around, and the worst 0:03:09.040 --> 0:03:10.760 for me is when people are like go north or 0:03:10.800 --> 0:03:13.600 go south, Like I'm not not Lewis and Clark. I 0:03:13.600 --> 0:03:16.000 need I need a left or right here, like, please 0:03:16.040 --> 0:03:18.040 don't tell me to look at the sunbur directions. I'm 0:03:18.040 --> 0:03:23.320 gonna need a little help. I feel the same way. Um, 0:03:23.360 --> 0:03:25.560 But so you're joining us on the podcast for the 0:03:25.560 --> 0:03:27.240 first time, I was hoping you could just start out 0:03:27.280 --> 0:03:29.400 telling us a little bit about your firm. Sure. So, 0:03:29.520 --> 0:03:32.640 the Square Private Wealth is a boutique advisory firm. We 0:03:32.720 --> 0:03:35.120 focus more on ultra high out worth and planning and 0:03:35.160 --> 0:03:38.200 portfolio management for them. We tend to be a little 0:03:38.240 --> 0:03:41.120 bit boring with our asset allocations. You know, we're not 0:03:41.160 --> 0:03:43.240 trying to be a hedge fund, uh and what we 0:03:43.320 --> 0:03:46.280 do think positioning and active management is important. But at 0:03:46.280 --> 0:03:48.160 the end of the day, a lot of our clients 0:03:48.160 --> 0:03:51.440 are that don't mess it up clients, So you know, 0:03:51.480 --> 0:03:55.200 we're not looking to necessarily be day traders or anything 0:03:55.280 --> 0:03:57.360 like that. You know, we never got into the meme 0:03:57.440 --> 0:03:59.480 stocks where we're a little bit boring that way. Like 0:03:59.520 --> 0:04:02.320 I feel like traditional asset allocation now, like when you're 0:04:02.320 --> 0:04:05.760 trying to talk about it, it's just not not sexy anymore. 0:04:05.760 --> 0:04:08.360 Everybody wants to throw in something in there that that 0:04:08.400 --> 0:04:10.960 just is like alive in it up. But we do 0:04:11.080 --> 0:04:15.240 think it's important, especially now you know, we're working very 0:04:15.280 --> 0:04:18.479 closely with clients about where do we allocate capital, where 0:04:18.480 --> 0:04:20.600 are we on a bottom or a bear, how long 0:04:20.600 --> 0:04:23.360 this may last? And and so we spent a lot 0:04:23.360 --> 0:04:25.440 of time. We have a pretty small book, we're about 0:04:25.440 --> 0:04:29.000 fifty million, but we've got under a hundred clients. UM, 0:04:29.040 --> 0:04:30.640 So we spent a lot of the time with the 0:04:30.720 --> 0:04:34.920 extensive planning and portfolio management for the individual I like 0:04:35.000 --> 0:04:37.400 that don't don't mess it up strategy, that big, good 0:04:37.480 --> 0:04:41.640 name for investors, different additive, but I don't think that's 0:04:41.640 --> 0:04:45.960 allowed on this show. So yes, a family, a family 0:04:46.000 --> 0:04:47.760 podcast like this, A lot of kids, a lot of 0:04:47.839 --> 0:04:51.880 kids listening, especially since the beam stocks took off. So 0:04:52.240 --> 0:04:54.720 we'll see. But you know, Victoria, I always wonder with 0:04:54.839 --> 0:04:57.640 a firm like Years based in Texas, UM. You know, 0:04:57.720 --> 0:05:00.520 if if you were managing money in California, I'd wonder, 0:05:01.080 --> 0:05:03.880 in say, Silicon Valley, I'd wonder if everyone was, you know, 0:05:04.920 --> 0:05:07.960 very bullish on tech and venture capital. So in Texas 0:05:08.320 --> 0:05:11.960 I have to wonder, you know, does the energy industry 0:05:12.000 --> 0:05:16.520 sort of uh influence your clients? You know, are they 0:05:16.640 --> 0:05:19.719 gung ho about energy or are they looking to diversify energy. 0:05:19.920 --> 0:05:23.240 How does it sort of influence the investment decisions of 0:05:23.480 --> 0:05:25.920 high net worth clients in Texas. Yeah, it probably makes 0:05:25.960 --> 0:05:28.200 them a little more bullish on the energy industry. But 0:05:28.279 --> 0:05:30.679 some of our clients actually we run x energy because 0:05:30.680 --> 0:05:33.240 it depends on what their exposures are. So if you 0:05:33.320 --> 0:05:35.960 have a privately held company or you're on board of 0:05:36.000 --> 0:05:38.840 a public company, you've already got that exposure. So we're 0:05:38.839 --> 0:05:42.480 actually kind of trying to diversify and mitigate the concentration. 0:05:42.839 --> 0:05:45.800 Because everybody in Texas is well aware that the oil 0:05:45.839 --> 0:05:48.680 market is cyclical, right, so you're ride up the good times, 0:05:48.720 --> 0:05:50.560 but you know there's a flip side to it at 0:05:50.640 --> 0:05:53.240 some point, you know. And in this last decade has 0:05:53.279 --> 0:05:55.359 been super hard in the energy industry. We had like 0:05:55.440 --> 0:05:58.920 five crashes within ten years, um and and so they're 0:05:58.960 --> 0:06:02.400 just this waringiness about Okay, yes we are bullish energy 0:06:02.440 --> 0:06:05.040 and the energy transition. While E s G is coming 0:06:05.080 --> 0:06:07.160 and electrics coming, it's going to take a little bit 0:06:07.160 --> 0:06:09.279 longer to adopt than we are seeing that play out 0:06:09.279 --> 0:06:13.680 here in two So probably I would say not to generalize, 0:06:13.720 --> 0:06:16.600 but the attitude of a lot of our clients is 0:06:16.680 --> 0:06:19.400 that the death of energy was over exaggerated. So not 0:06:19.480 --> 0:06:21.600 to say that there aren't concerns about E. S G 0:06:21.839 --> 0:06:24.159 or climate change or things like that, but it tends 0:06:24.200 --> 0:06:25.960 to make them a little bit more willing to have 0:06:26.040 --> 0:06:28.640 a football hold in that that segment. So I do 0:06:28.720 --> 0:06:30.400 think it's a little bit of of what you know 0:06:30.560 --> 0:06:33.800 does influence what you feel comfortable investing in. Uh, you know, 0:06:33.880 --> 0:06:36.320 you have the same thing happened in California, and you know, 0:06:36.360 --> 0:06:38.800 if you're in San Francisco area, you probably are very 0:06:38.880 --> 0:06:41.440 very comfortable with your tech exposures and a little bit 0:06:41.440 --> 0:06:44.280 more comfortable with the early stage and the small cap 0:06:44.320 --> 0:06:47.920 tech and the the innovators per se. That's that's very 0:06:47.960 --> 0:06:50.800 interesting to me that the next energy portfolio is. I mean, 0:06:50.839 --> 0:06:52.680 it makes a lot of sense. You know, they know 0:06:52.760 --> 0:06:56.920 the the home base industry, but to get exposure everything 0:06:56.920 --> 0:07:00.240 else that they bring in, you guys, it's pretty interesting. Yeah, 0:07:00.240 --> 0:07:03.120 it's well, it look at this last decade, like I said, 0:07:03.160 --> 0:07:05.360 especially like fourteen, and you know you had energy well 0:07:05.360 --> 0:07:08.479 beloween when you had it well below thirty dollars and 0:07:08.520 --> 0:07:11.120 you just couldn't get it really above thirty dollars for years, 0:07:11.160 --> 0:07:13.480 you know, in the Saudias and ope kind of crashing that. 0:07:13.800 --> 0:07:16.440 I distinctly remember that because I was on vacation for 0:07:16.520 --> 0:07:19.840 Thanksgiving when OPEC changed their policy, and it really really 0:07:19.920 --> 0:07:23.080 messed up my Thanksgiving. So I've never forgiven OPEC to that. 0:07:23.560 --> 0:07:27.480 But you know, I think it's something that investors always 0:07:27.520 --> 0:07:30.320 have to be aware of their their you know, totality 0:07:30.360 --> 0:07:32.760 of their portfolio and wealth. So let's say you have 0:07:32.840 --> 0:07:35.400 your salaries tied up in energy or natural gas and 0:07:35.440 --> 0:07:37.400 your dock ops and they're tied up in that, or 0:07:37.440 --> 0:07:40.560 your networks tied up in some sort of energy exposed business, 0:07:40.600 --> 0:07:44.360 whether it's in uh, you know, the services or fracking 0:07:44.520 --> 0:07:47.280 or transportation. You just have to be aware of how 0:07:47.280 --> 0:07:49.880 cyclical up businesses and you kind of want to counterbalance 0:07:49.920 --> 0:07:52.240 it and say, yeah, I want my portfolio, but I 0:07:52.240 --> 0:07:54.160 don't want to be focused on energy. I wanted to 0:07:54.240 --> 0:07:57.400 be diversified because anybody that's lived in Texas for more 0:07:57.440 --> 0:08:00.440 than ten years knows at some point this it's going 0:08:00.520 --> 0:08:03.200 to come back down, you know, how long it stays elevated. 0:08:03.280 --> 0:08:05.880 If this is like A one where we saw that 0:08:05.920 --> 0:08:07.720 spike on the Gulf Woor, if this is an OH 0:08:07.840 --> 0:08:09.720 eight where again we saw a spike, but it came 0:08:09.760 --> 0:08:12.960 back hard. You know, how long does oil stay above 0:08:13.000 --> 0:08:15.680 a hundred? That's you know, the million dollar question down here. 0:08:15.920 --> 0:08:18.040 We do tend to think it's gonna stay elevated a 0:08:18.040 --> 0:08:21.000 little bit longer, just because of the supply demand dynamics. 0:08:21.240 --> 0:08:23.080 And we did see a lot of things shut down 0:08:24.040 --> 0:08:27.480 when we had negative energy prices and people were you know, 0:08:27.600 --> 0:08:30.280 paying you to take and store oil. I mean, wow, 0:08:30.360 --> 0:08:33.400 what what a difference twenty four months makes between like 0:08:33.559 --> 0:08:36.400 literally they were paying you to take it and now 0:08:36.440 --> 0:08:38.720 we're paying you know, five dollars at the pump to 0:08:38.760 --> 0:08:41.160 get it. Well, I know that you had sent us 0:08:41.160 --> 0:08:43.760 over our note uh talking about some of the energy 0:08:43.800 --> 0:08:45.719 names that you do like, so maybe could you walk 0:08:45.800 --> 0:08:47.760 us through some of them. I think it's like Devon Energy, 0:08:47.880 --> 0:08:51.200 e o G, Diamondback Energy. And I wanted to ask 0:08:51.240 --> 0:08:53.440 you because we had Daniel You're going on the podcast 0:08:53.520 --> 0:08:56.040 recently and he was saying we could continue to see 0:08:56.080 --> 0:08:58.920 the the supply crunch, meaning that prices are going to 0:08:59.280 --> 0:09:03.000 continue to stay elevated. Is that also your expectation for 0:09:03.040 --> 0:09:06.200 the energy? Yeah? I like it. So, And this goes 0:09:06.200 --> 0:09:08.440 into the greater theme of like what's happening in the 0:09:08.480 --> 0:09:10.960 world right now, and the de globalization and as you 0:09:11.000 --> 0:09:14.000 may see Russia removed from the market. You're seeing all 0:09:14.040 --> 0:09:16.520 of this rebalancing of supply and demand, and it's hitting 0:09:16.559 --> 0:09:19.840 commodities harder. It's not just energy, it's hitting it's fertilizers, 0:09:19.840 --> 0:09:22.120 it's it's all of the exports that are in some 0:09:22.160 --> 0:09:24.680 precious metals. I think, what are they. It's not lithium, 0:09:24.720 --> 0:09:27.440 it's what's the press palladium. They're a huge, huge supplier 0:09:27.480 --> 0:09:30.760 of palladium. And so you're seeing this rebalance and shift 0:09:31.040 --> 0:09:32.760 and all of these things take a lot of time 0:09:32.840 --> 0:09:36.160 to redistribute and build up supply chains. So our base 0:09:36.240 --> 0:09:39.240 cases oil is staying elevated for the next eighteen months. 0:09:39.559 --> 0:09:41.720 I don't see it coming back down. I don't see 0:09:41.760 --> 0:09:44.840 the demand cruns happening, you know. You know, yeah, China, 0:09:44.880 --> 0:09:46.760 you kind of live and die by China some But 0:09:46.800 --> 0:09:49.240 if you look at the travel and the consumption in 0:09:49.280 --> 0:09:51.600 the United States and Europe and where the trends are 0:09:52.040 --> 0:09:54.960 um most every developed nation has not does not have 0:09:55.000 --> 0:09:57.440 a zero COVID policy anymore. It's it's we're gonna just 0:09:57.480 --> 0:09:59.400 deal with it. I know COVID it's like a dirty 0:09:59.400 --> 0:10:02.199 word these day because we're so tired of talking about it. 0:10:02.520 --> 0:10:04.959 But it's still there. I mean, that's what's affecting China 0:10:05.000 --> 0:10:09.199 and Chinese demand. UM. And Chinese demand may also get 0:10:09.240 --> 0:10:12.200 a little messy because China and India have shown willingness 0:10:12.200 --> 0:10:15.360 to buy cheap Russian crewed. Some of its geographically easy 0:10:15.440 --> 0:10:17.040 for them as well as you know, if they can 0:10:17.080 --> 0:10:19.480 buy it at thirty dollars and they're you know, concerned 0:10:19.480 --> 0:10:22.720 about their economic growth. UM. So we may see some 0:10:22.760 --> 0:10:26.520 demand wane in China, but generally speaking, barrel for the 0:10:26.559 --> 0:10:29.120 next eight teen months, I think is distinctly possible. You 0:10:29.160 --> 0:10:32.600 have not seen this wildcat or mentality come back in right. 0:10:32.640 --> 0:10:34.440 So if you look at the graph of the Baker 0:10:34.559 --> 0:10:36.960 huge rig count, you know, and you saw like coming 0:10:37.000 --> 0:10:40.240 up the where like sixteen hundred rigs. And then obviously 0:10:40.320 --> 0:10:43.000 we had the OPEC change and everybody lost lost lost 0:10:43.000 --> 0:10:45.600 their ass to be quite frank with you. UM. And 0:10:45.600 --> 0:10:48.760 and so you saw this grand the investment in the 0:10:48.760 --> 0:10:52.200 oil and gas industry. And even now we're well well 0:10:52.240 --> 0:10:56.240 below peak, we're still well below pandemic era UM oil 0:10:56.280 --> 0:10:59.160 and gas rigs out there. So you have seen oil 0:10:59.200 --> 0:11:01.319 companies and you'll see this theme. And the oil and 0:11:01.360 --> 0:11:04.280 gas stocks that I like, the Devon, the e O G, 0:11:04.720 --> 0:11:07.480 the Fang, you know, UM and the Pioneer. They are 0:11:07.720 --> 0:11:10.200 US based with a big foot put in the permium. 0:11:10.240 --> 0:11:13.720 They have low brake events, and they're absolutely pushing cash 0:11:13.760 --> 0:11:16.040 to shareholders. They are not putting it back on the ground. 0:11:16.360 --> 0:11:19.559 They are saying, thank you, shareholders for trusting us, here's 0:11:19.559 --> 0:11:22.000 your money back. Really sorry, we didn't make you money 0:11:22.040 --> 0:11:24.200 for a decade, but here you go, let's make some 0:11:24.240 --> 0:11:27.479 money now. But you're not seeing that wild counter mentality 0:11:27.559 --> 0:11:31.319 that happened with other oil price spikes, because that would 0:11:31.320 --> 0:11:33.920 happen and you'd have this massive inflow of let's get 0:11:34.000 --> 0:11:36.200 more rigs out there, and just you know, supplying demand 0:11:36.200 --> 0:11:38.600 would eventually flip it over you. If you look at 0:11:38.600 --> 0:11:41.000 the slope of how the rig count has increased, it's 0:11:41.040 --> 0:11:44.320 a much lower trajectory. Nobody's really pushing a ton of 0:11:44.360 --> 0:11:47.440 money back into CAPEX. So we love the stocks that 0:11:47.480 --> 0:11:50.600 are giving our shareholders just a better return right now. 0:11:50.640 --> 0:11:53.000 Like Devon Energy at a hundred dollars barrel is like 0:11:53.040 --> 0:11:56.760 a sixtent free cash flow yield. They're pushing out of 0:11:56.800 --> 0:11:59.560 their free cash flow and a variable dividend every quarter, 0:12:00.040 --> 0:12:02.360 Like you're talking a lot of money to sit and wait. 0:12:02.440 --> 0:12:05.440 Plus you might get price appreciations still because they keep 0:12:05.480 --> 0:12:07.920 making more money. And if you look at where earnings 0:12:07.920 --> 0:12:11.000 revisions are happening, about the only place that we're thinking 0:12:11.000 --> 0:12:13.640 earnings are going to go up as energy, And so 0:12:13.720 --> 0:12:15.880 the pe s there are actually still even with this 0:12:16.000 --> 0:12:18.320 massive price moving up in a lot of these stocks, 0:12:18.520 --> 0:12:22.000 the ps are actually still very nominal and very value oriented. 0:12:22.280 --> 0:12:24.520 I actually I was writing about this earlier this week 0:12:24.600 --> 0:12:27.240 where there's this e t F. It's like a cash 0:12:27.280 --> 0:12:32.120 cows The ticker is really funny CEO w Z, but 0:12:32.120 --> 0:12:34.040 but it's been seeing tons of inflows. And when I 0:12:34.080 --> 0:12:36.839 was looking at the names within it, their energy names, 0:12:36.880 --> 0:12:40.480 and it's companies with high free cash flow yields. So 0:12:40.640 --> 0:12:42.800 does that make sense to you to see something like that, 0:12:43.120 --> 0:12:45.960 we want cash, we want money. Right now is playing 0:12:45.960 --> 0:12:49.800 defense and survival, Like not to sound super dour about 0:12:49.840 --> 0:12:53.760 the world, but by is let's survive as this year 0:12:53.800 --> 0:12:56.480 with as minimal damage as we can, Like we're trying 0:12:56.480 --> 0:12:59.440 to avoid falling on hand grenades and avoid it like 0:12:59.480 --> 0:13:02.280 a complete blow up and I do think the energy sector. 0:13:02.720 --> 0:13:04.959 I'm aware of commodity price spikes. We can go back 0:13:04.960 --> 0:13:06.640 and look through all the charts. We actually did this 0:13:06.679 --> 0:13:10.160 whole big research thing of what's killed off oil markets 0:13:10.160 --> 0:13:12.640 in the past. So what killed off the nineties oil market, 0:13:12.640 --> 0:13:16.160 the eighties oil market, oh a, and then the whole 0:13:16.920 --> 0:13:20.920 decade which was a complete lost decade in oil and gas, 0:13:21.320 --> 0:13:25.400 and then obviously implosion. Um. But when you look at 0:13:25.400 --> 0:13:28.400 these companies now you are getting massive cash flows back, 0:13:28.400 --> 0:13:30.280 and I feel like the cash flows are sustainable. So 0:13:30.360 --> 0:13:32.640 Devin Energy, I love. They're my top pick in the space, 0:13:32.679 --> 0:13:35.360 so I do talk about them frequently. But they've got 0:13:35.400 --> 0:13:39.320 only the oil hedged, so they're actually seeing a lot 0:13:39.360 --> 0:13:41.440 more of a fern um. You know, that was one 0:13:41.480 --> 0:13:43.240 problem a little bit with the e m p s 0:13:43.360 --> 0:13:45.600 last year. We still had pretty high hedges coming out 0:13:45.600 --> 0:13:48.680 of two thousand uh and then you see those fixed 0:13:48.679 --> 0:13:51.120 plus variable dividend and now other people have modeled after 0:13:51.200 --> 0:13:53.640 it is not as unique anymore. But they pushed I 0:13:53.640 --> 0:13:56.440 think one a dollar twenty seven as a quarterly dividend. 0:13:56.760 --> 0:13:58.840 It was a great yield. And if you look at 0:13:58.920 --> 0:14:01.040 how that's grown and how they expect their free cash 0:14:01.080 --> 0:14:04.520 flow to grow. They're they're they're doing everything they can 0:14:04.720 --> 0:14:08.000 to make their shareholders reap the rewards that they're getting 0:14:08.400 --> 0:14:10.839 UM and their share buybacks. I think they authorized another 0:14:10.840 --> 0:14:13.319 two billion and they've they've literally brought back three of 0:14:13.360 --> 0:14:16.080 their market cap. So if Devin thinks they're stocks worth owning, 0:14:16.400 --> 0:14:18.160 you know, share by backs are one of the good 0:14:18.360 --> 0:14:20.480 uses of cash, and it's a way to enhance your 0:14:20.480 --> 0:14:27.000 shareholder value. Victoria wondering what you think is causing that 0:14:27.120 --> 0:14:29.400 sort of you know, as you describe it, that wildcat 0:14:29.480 --> 0:14:33.760 or mentality from returning UM. Is it's simply just a 0:14:33.880 --> 0:14:36.880 legacy of the busts that that you've talked about in 0:14:36.920 --> 0:14:40.560 the last few decades, or you know, people love to 0:14:40.560 --> 0:14:44.720 politicize oil production and claim it's it's a result of 0:14:44.800 --> 0:14:48.000 you know, Biden and and energy policy. But is it 0:14:48.320 --> 0:14:51.600 you know, is there anything that policy could do right 0:14:51.600 --> 0:14:55.600 now to increase production or is it just you know, 0:14:55.840 --> 0:14:59.080 like you said, Uh, those busts of the last few 0:14:59.080 --> 0:15:02.480 decades have really left their scar and no one wants 0:15:02.520 --> 0:15:05.760 to rush in and oversupply the market right now. I 0:15:05.800 --> 0:15:09.240 think it's more they don't want to oversupply the markets 0:15:09.320 --> 0:15:11.280 I mean, like like if you again, if you look 0:15:11.280 --> 0:15:13.160 at the rig count and how we've messed up some 0:15:13.200 --> 0:15:17.000 of these other other um bull markets and oil, it's 0:15:17.040 --> 0:15:20.280 been an oversupply eventually happens, and that's typical and most 0:15:20.320 --> 0:15:24.280 commodity markets, right, commodity prices spike, you bring more production online. 0:15:24.320 --> 0:15:27.920 Now you're supplying demand rebalances. We never actually get balanced. 0:15:28.040 --> 0:15:30.000 I don't think I've ever actually seen it come out 0:15:30.000 --> 0:15:32.640 of your market that we would consider balanced. Were either 0:15:32.760 --> 0:15:36.040 under supplied or oversupplied. And quite frankly, the last two years, 0:15:36.040 --> 0:15:39.120 we've had this whiplash between the two um and that's 0:15:39.160 --> 0:15:43.880 something we'll talk about frequently down here. The Biden administration 0:15:44.040 --> 0:15:47.080 and the US energy industry do not have a good relationship. 0:15:47.200 --> 0:15:49.840 I think that's putting it mildly. I think there's a 0:15:49.840 --> 0:15:53.120 lot of angst about government regulations. I think there's a 0:15:53.160 --> 0:15:56.160 lot of you know, there's a lot of rhetoric about 0:15:56.240 --> 0:15:59.280 you know, the then the Biden administration is definitely pushing 0:15:59.320 --> 0:16:02.280 greener and and climate change issues in the oil and 0:16:02.320 --> 0:16:05.240 gas industry. It definitely felt a little unloved. But I'm 0:16:05.280 --> 0:16:07.640 not sure there's anything that Biden administration could do. Yeah, 0:16:07.720 --> 0:16:10.480 they could open up some more leases, but you actually 0:16:10.560 --> 0:16:12.160 have a lot of people that have a lot of 0:16:12.240 --> 0:16:14.960 leasing and permitting. And if you look at the timeline 0:16:15.080 --> 0:16:17.800 between when when a company can buy a lease, so 0:16:17.840 --> 0:16:21.000 when they actually like get that gasoline in your car, 0:16:21.200 --> 0:16:24.280 it's years and years. I mean, there's permitting, then you 0:16:24.320 --> 0:16:26.440 actually have to drill it, then you actually have to 0:16:26.480 --> 0:16:28.480 like pump the oil out of it. Then you gotta 0:16:28.520 --> 0:16:30.560 transport it, then you gotta refine it, and then you 0:16:30.600 --> 0:16:33.480 gotta transport to gas stations, and all of those things 0:16:33.520 --> 0:16:36.720 take a lot of permitting. So could it be eased 0:16:36.720 --> 0:16:39.080 if if regulations were eased, you know, that's that's the 0:16:39.160 --> 0:16:43.200 rallying cry of less regulation and less government coming from Texas. 0:16:43.320 --> 0:16:46.000 But at the same point, it's not going to immediately 0:16:46.040 --> 0:16:47.880 make an impact on the pump. You know, look at 0:16:47.920 --> 0:16:51.120 the release of the Strategic Petroleum Reserve. That did nothing. 0:16:51.720 --> 0:16:53.800 You know, at the end of the day, that did 0:16:53.880 --> 0:16:56.440 nothing to relieve it because some of it you just 0:16:56.480 --> 0:16:59.000 don't have enough refinery capacity right now. You have some 0:16:59.040 --> 0:17:04.760 refiners golf most refineries are finding it at So could 0:17:04.840 --> 0:17:08.359 the industry and the government have a better relationship, Yes, 0:17:08.520 --> 0:17:11.280 could that foster a little bit more drilling. Yes, Is 0:17:11.320 --> 0:17:14.199 it going to bring back a lot of supply quickly, No, 0:17:14.960 --> 0:17:17.680 just because of the timeline it would take between like, yeah, 0:17:17.720 --> 0:17:20.560 I'm gonna go get that lease and get it all 0:17:20.600 --> 0:17:23.280 permitted and get it drilled. It's not like it's showing 0:17:23.400 --> 0:17:26.639 up at you know, the gas station tomorrow. And just 0:17:26.680 --> 0:17:29.480 to bring us back to the broader market. Obviously, every 0:17:29.480 --> 0:17:32.480 conversation I've had this week has revolved around whether or 0:17:32.480 --> 0:17:35.600 not we've had a bottom, whether or not we've hit 0:17:35.680 --> 0:17:38.320 it or probed it or tried to form it or 0:17:38.920 --> 0:17:41.800 you know, I've heard some people saying that we are. 0:17:41.800 --> 0:17:43.520 It's going to be a rounded bottom. It's going to 0:17:43.560 --> 0:17:46.080 take some time to to to form. So I'm just 0:17:46.119 --> 0:17:49.479 wondering what you think and what you're expecting from the market. 0:17:49.800 --> 0:17:51.520 I don't think we found a bottom yet. I know 0:17:51.640 --> 0:17:54.600 Friday was a really great turnaround. We had that important 0:17:54.640 --> 0:17:57.840 thirty fifteen support level held and that was huge and 0:17:57.880 --> 0:18:00.919 that kind of caused that interday reversal. You know, yesterday 0:18:00.960 --> 0:18:03.399 you saw a rally off. I know we're on the 0:18:03.440 --> 0:18:06.359 tech side. We are approaching that very long term trend 0:18:06.440 --> 0:18:09.280 line that we might break through. Um, I just think 0:18:09.280 --> 0:18:11.040 we're we're not done yet. You know, I think there 0:18:11.119 --> 0:18:13.280 is a little bit more of the first leg because 0:18:13.320 --> 0:18:15.720 I always asked, you know, what is our catalyst? How 0:18:15.720 --> 0:18:17.960 are we going to get growth? You really haven't seen 0:18:18.000 --> 0:18:20.719 a lot of earning revisions, and so we talk about, well, 0:18:20.840 --> 0:18:23.280 valuations have come down. Yeah, the the P part of 0:18:23.280 --> 0:18:25.640 the P and E have come down. What happens when 0:18:25.640 --> 0:18:27.520 the E starts to go back down to you know, 0:18:27.560 --> 0:18:29.800 there's two parts to that. And if we don't have 0:18:29.880 --> 0:18:33.560 earnings expansion or at least earning staying status quo, you're 0:18:33.560 --> 0:18:36.360 gonna see valuations maybe aren't quite as low as they're 0:18:36.359 --> 0:18:41.520 looking now. Um. You know that being said, it has held. 0:18:42.320 --> 0:18:43.840 I just don't think we're done yet. I think this 0:18:43.920 --> 0:18:46.080 is more of a relief rally. Um. If you look 0:18:46.119 --> 0:18:51.080 for the signs of capitulation, down age, the VIC spiking, Um, 0:18:51.119 --> 0:18:53.720 you know, we're just not there yet. Yeah. Cash balances 0:18:53.800 --> 0:18:57.320 have have definitely increased, and yes we've seen some equity selling, 0:18:57.359 --> 0:19:00.720 but not a well and true panic. Like not to 0:19:00.800 --> 0:19:04.160 sound like a snob, but I need like a solid panic. 0:19:04.240 --> 0:19:06.600 You know, we just haven't seen that that that solid 0:19:07.040 --> 0:19:11.520 absolute capitulation. Everything selling off, you know, we we we 0:19:11.600 --> 0:19:15.119 aren't there yet. And then my concern also where is 0:19:15.160 --> 0:19:19.040 your growth where you know margins are definitely being squeezed, 0:19:19.240 --> 0:19:22.120 and and we we're gonna have to wait until the 0:19:22.200 --> 0:19:25.480 FED can send the economy into a recession to stop 0:19:25.520 --> 0:19:29.359 some of this. And my oppression is you think that's 0:19:29.440 --> 0:19:31.399 kind of inevitable that you know, the Fed's not going 0:19:31.440 --> 0:19:35.240 to be able to bring inflation from eight percent plus 0:19:35.280 --> 0:19:40.240 back to their target without they triggering I I not 0:19:40.320 --> 0:19:42.920 that I don't. Yeah, I mean I would. I would 0:19:42.960 --> 0:19:46.280 say I would love and I would challenge somebody to say, 0:19:46.359 --> 0:19:50.800 has the FED ever navigated a difficult situation? Well, not 0:19:50.920 --> 0:19:53.760 to rip on them, it's a thankless job because they're 0:19:53.800 --> 0:19:57.520