Ep248: If $200 Oil

This is the 10 Minute Concertion Podcast, this is VP.

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It is the teminative contrarian podcast and for episode 248, I was a bit torn on what

to talk about.

It's not that the spreadsheet is getting lean.

It's certainly not.

It's just, do I want to keep talking about oil and what's going on in the Middle East for

a few reasons.

But mainly is, this is a contrarian podcast.

And if we're really being contrarian, we should be talking about all of the sweet divergence.

All of the absolute gifts this crisis is giving us.

And believe me, we will talk about it.

But I figure if I'm going to do one more oil episode, it just makes sense to do it now.

We can kind of close out the series.

Because making a mistake, oil is a part of what we do here.

And it just doesn't get the amount of shine that I feel like it should get.

So I'm very happy to talk about it.

I'm glad the awareness is back, albeit under more unfortunate circumstances, which

really is going to be the case with oil.

But it's one of those things.

And I said it last episode.

And I'm going to say it all the time now because I love this saying because it really pertains

so much to what we do.

But these things don't matter until they matter.

And that's why you have to invest in things when nobody cares.

Because they will.

And when they do, oh boy, you're going to be really glad you got in cheaply and just

held your nose and bit the bullet and bought when it just seemed like for some goofy reason

that you thought these things were just going to wither and die on the vine because they

just weren't in the conversation at the time.

You know, it really is kind of my job to break you from that awful circle that so many

people fall into by so many, I mean, almost everybody.

And I'll bet the majority of you, which is completely inexcusable.

But I can only do what I can do.

So let's get into this particular episode, which is going to be not so much about buying

things when they're cheap.

But what to do if one particular thing were to get really, really expensive, which is

another reason I'm really happy to bring this episode to you because these things also

happen.

And we need to be ready for them and we need to have a game plan because it might happen

so quickly that I wouldn't even have time to put a podcast together to even tell you

what to do.

It might come and go so fast.

Or what would actually be worse is if it did happen and you had no guidance, but you

really needed it because let's be honest, that's going to be a crazy, panicky, emotional

time and it may compel you to do things outside of what you would normally do, which is also

what we really try to avoid here.

And we're going to talk about that as well.

And before we do that, I wrote a very important blog post on Substack.

And if you are not subscribed to it, I will always have a link down below in the show notes

for you to go subscribe to it.

I've said it before, you're probably getting just as much alpha there as you're getting

here.

And it's completely free and they will notify you via email if you want to every time

I put something out, which is about maybe once every 10 days going right about that

clip right now, but on that blog post, I said to you, I said, really, you need to make

a decision right now for the rest of 2026.

Now, I know we have a much longer time frame than that here, but with everything going

on, as far as the rest of this year goes, you need to decide who do you want to be going

forward.

And there's no wrong answer, but it's really, it's pretty binary.

Are you going to be the hardcore contrarian that says, okay, no matter what's going on

in the world, I'm just looking for deals.

You know, I'm completely fine with my entire portfolio eating shit minus the energy stocks

right now.

If it means I can get, you know, smoking good, completely unreasonable deals on a lot

of the things that I really want to buy.

You know, that's option one, option two is to say, okay, I kind of know a recession is

supposed to be coming up and this would be a pretty good catalyst for that.

Oil is oil at the end of the day, you know, people are probably overreacting like they

always do, but it's still oil, man, and it's, you know, I've been looking for a time

to de-risk my portfolio and no better time than right now with something like this going

on.

So let's just kind of chill, move into cash, generate some very safe yield, and let's

just let this whole thing play out.

You know, I'm not so inflexible that I'm going to sit there and say, no, it's got to

be this one thing all the time no matter what's going on in the world.

You know, no, there are two ways to play this, and I understand both.

And so step one, my advice for this episode is to go read that blog and decide right

now what it's going to be.

Write it down.

And while we have a little bit of break in the action, while it's over the weekend and

emotions and the news cycle isn't too crazy right now, and we're all of rational minds.

Take this decision now, write it down somewhere, tape it onto your computer screen on your

wall, whatever, say, look, this is how I'm going to approach the rest of 2026.

And then now we can talk about something almost completely unrelated to that because you'll

see what I'm talking about on to oil.

Now when I say $200 oil, I mean $200 WTI oil, you might see panicky spikes in the other

two oils, Brent crude and Dubai slash Oman, but the big talking point has been a possibility

of getting up to $200 West Texas crude, which would be about $50 more than the all time

high.

Yeah, again, seems a bit, I'm not going to say absurd, I'm going to say maybe improbable,

but that's a big talking point right now with people who are actually in the energy space.

If it was some rando on Twitter who's engagement farming, yes, and this also means people with

like half a million follows, you know, these people are just as bad as anybody else is

on there.

But like real industry people, you're starting to hear this from, but the possibility alone

I think is fairly low probability, but I am merely a trader slash investor as far as oil

goes.

Now I would say too, because the oil industry has two different sides of the political

aisle as well, which is something you don't always see in maybe like the precious metal

space or the crypto space, but you will see it in the energy space and mainly oil, because

you know, if you're in the renewable space, those people will typically lean left to where

if you're in like the Uranium space, for example, those people are going to lean much harder

right.

And we're talking about whatever the left and the right would be in the United States, because

that's the only point of reference I can really talk about.

But it just seems to happen that way, but in oil, for some reason, you get everybody,

which is good as long as you stay away from the fringes, because as we all know, the answer

is always somewhere in the middle.

The fringes are never right about anything.

And these predictions alone are coming from people who really sound like they're pretty

hard left.

I still listen to the macro voices podcast, which I recommend everybody does here.

I think it's a great podcast.

And this past episode, they had two people on and I'm pertaining to the second guy they

had on.

And this was one of the $200 oil predictor guys, he was industry known in the industry.

I've never heard him talk and I finally did.

And I don't love doing this, but it's damn it if it's not the case.

I heard him talk.

He had a squeaky voice and he was talking in a very panicky, hair on fire fashion.

I'm like, okay, this is going to be a guy who was probably rooting for $200 oil because

it would screw over Donald Trump.

And I was about as spot on as I've been in a long time when it comes to stereotyping

people because this guy was very TDS.

And the reason I bring this up is not from not because the prediction alone, but if for

some reason, oil should get this higher even close to it.

This is the moment that a lot of these people have been waiting for and they will continue

to add fuel to the fire as much as they can.

Which is why, even though they're industry, you should not be listening to them.

And again, by the same token, those super mega accounts, they're going to have their

say to and they are every bit as useless.

Nothing one person says or does, especially President Donald J. Trump is going to always

be good or always be bad.

But this is literally the base case.

This is literally the jumping off point for a lot of these pundits, even inside of the

oil space.

So I just want to let everybody know and make you guys aware, this is the one energy space

to where you're going to get a healthy amount of both people.

The key is to really try to stay in the middle and find the people who are going to be the

most factual, not people with an axe to grind, one way or the other.

Somebody, if you want to, you're like, okay, well, who the hell should I listen to then?

Somebody I have always liked a lot, somebody who a lot of you are probably familiar with.

This is somebody whose substack I subscribe to and have for years is Doomburg, the guy

who's represented as a cartoon chicken.

He values his privacy as do I and he is semi-private in that regard.

And I don't always agree with his forecasting.

But if you're looking for somebody who is very learned and very smart within the energy

space and will bring to the table a lot of things that most people aren't talking about.

So if you like what we do here, I think you would really like him too.

And you can subscribe to him on substack or you can just catch a lot of the interviews

that he does publicly for free.

And one of the things I've always remembered him saying is when it comes to energy,

gluts almost always follow shortages, which I was like, hmm, let's cross reference that

and let's see if that's the case.

And dammit, they almost always do.

And this is why in the energy space, especially the oil space, we say that this might not

always be the best place for super long term buy and holds.

This is a very unique space to where if you get a spike, especially if that spike seems

a bit unreasonable, then it can be a really good opportunity to take your profit and then

redeploy that cash into something else.

And again, with oil, I can tell you as somebody who's been trading it for, let's see what

we had now, 2026, about 10 years and somebody who's been investing in it for maybe seven

or eight years, I can confirm that this price action is very spot on.

So based on all of those things, I'm going to give you five different oil related investing

instruments, well, four and then one for traders and how I would personally approach all

five of those, should we approach or even get to $200 a barrel USD, West Texas crude oil.

So let's give a quick shout out to the traders.

First, if you are an oil trader out there and oil hits $200, this is going to deviate

from what you would do in an intelligent trading system.

But I'm just going to tell you right now, if I'm trading oil and oil hits $200 and I'm

going long, I am instantly getting the fuck out of there.

But the guy on the TV said it could go to four and no, no, I don't care what he said.

You guys need to understand just how much people panic and how panicking is always the wrong

approach.

All right, if a large fireball is coming out of the sky and headed towards you, yes,

okay, run, but apart from that, especially in the financial world, how many times do

we really have to see it?

I mean, it hasn't even been 12 months, remember the tariff tantrum and it's the same narrative

every time they're like, oh my God, this is just how things are going to be.

And I talked about it on the show, I'm over here like, all right, this is, that was the

whole period of time that coined the taco trade that Trump always chickens out.

I'm like, you can call me whatever here, but that's not really what's going on.

It's like, has nobody ever read a basic elementary schoolbook on negotiation?

You probably should.

It's a very useful skill, no matter what you do in life.

The problem is nobody else has ever read one either.

So they see things like this and these nobody's sit there and talk about the guy who actually

wrote the book on negotiation and they all of a sudden they think they know more than

he does.

Well, I'm over here like, well, no, no, of course, he's going to set these tariffs to absurd

high levels so he can actually get the number he wants.

How does nobody know this anyway?

But again, if you look at your monthly chart, you can see exactly when this moment in time

was because of the stupidly long tail the candle has because people realized right away,

oh, okay, this is actually not how it's going to be forever.

But man, if you could go back and play some of those audio clips and see some of those

tweets, panic, panic, panic, what did we see if we want to stick with oil?

What did we see back in 2020?

We saw oil go negative and not just negative, like very negative because we thought the

same thing.

Oh my God, the entire world is going to completely shut down, international commerce is going

to completely shut down, domestic commerce is going to completely shut down and this is

just how it's going to be.

And what actually happened, it turned out to be a generational time to buy oil because

of the absurd way we panic is human beings.

So the same thing can be said about moves and oil to the opposite side, not just the crazy

declines but the crazy peaks as well.

But I guarantee you, you're going to hear the same dumb ass narrative we hear every single

time.

You know, they're going to say, this is just the way of things now, you'll see the headlines

too from whatever hack organization is out there.

How to prepare for a world with $200 oil, complete childish nonsense every time.

And like Doomburg said, gluts seem to always follow shortages because they do.

How long it takes for one to follow the other we don't know, but when you see a crazy drop

into the negative, that is a generational time to buy when you see a crazy spike to absurd

levels, that is the time to sell.

And if you're trading for the love of God, sell, I don't care if it goes to 500 chances

are if you didn't sell it to, you're not going to sell it five either.

Let's be honest, if oil hits $200, get out of your trade, sell.

Now if you have an oil ETF and you're kind of more or less holding that way.

So USO in the United States, whatever equivalents you have in other markets, I would take the

exact same approach, patch yourself on the back, take your money, get out of there because

the same logic applies.

Again, gluts will eventually follow shortages.

And when that happens, you don't want to be holding an oil ETF.

That money is way better off deployed elsewhere.

And so you need to get liquid.

Moving on to scenario number three.

If you have an oil services ETF or I will even go as far as to say an oil services stock,

I'm going to say the same thing, just go ahead and sell it.

These things are going to move a little bit different.

They're better by and hold options than the previous two situations.

But energy is still going to do what energy does, man.

I've already taken a little bit of profit on the oil services stock that I have.

You better believe if this thing spikes up to 200, that whole thing is going by by.

And I will, unfortunately, probably even have to eat the tax, which I hate doing, which

is why I love being a buy and hold investor because this almost never applies.

But it's still worth eating the 35% tax in the United States, which by the way, even

if I sell later, that's still going to be a 15% tax, which is more than I want to pay.

I've always believed that capital gains taxes are an absolute crime against humanity completely

unnecessary.

I really hate taxes, but not to the point where I'm going to do a bunch of illegal crap

and look over my shoulder for the rest of my life, either.

So while we're here, I don't know when I'm ever going to talk about this again because

I hate talking about taxes because everybody's situation is so different.

And that's just not something as a financial broadcaster that I, it's not a subject that

I think I should ever really approach.

But let me just say it now, I have been working diligently to structure things, to where I can

invest in stocks on different markets as an American citizen, and as a foreign resident

of certain countries, to where I can really get my tax bill way down on the things I love

to invest in.

I haven't quite gotten there yet.

I made one attempt a while back.

It was a failed attempt because I didn't quite understand all the rules.

I'm talking to my fellow investors here, and I think 30, 35% of you are in the United

States, and this is really something I am looking to accomplish going forward.

Because at the end of the day, it's not what you make, it is what you keep.

And one of the best things you can ever do for your future self is to structure yourself

intelligently and legally to get those percentages down as much as possible.

And if you're from a high tax country, which most of my audience is, my God, you can't

do this soon enough, even if you know basic math, which is about where I top out at, and

you understand compounding which we all should hear.

If you're not in the process of getting this done now, I'm not really sure what you're

doing.

There are ways, there are ways with traditional banks, we should all be grateful that the

blockchain exists now, there are methods there as well.

But I just want to take a little bit of an interlude and mention that here, I will bury

it in an oil episode, and only the real ones get to hear about this, even though I'm hoping

if you're really a real one, you've already got this process and motion, but as far as

how to do it, step by step, you will not ever hear something like that from me, because

if I say one wrong thing, and then somebody goes out and does that one wrong thing, now

I got a problem.

So anyway, moving on to situation number four, if you have an oil company, such as Exxon

or Chevron, now I will say if you hold an oil producers ETF, such as XOP or something

like that, then I'm going to take the same exact same approach as I would if I had a

service as ETF, I forgot to mention that.

So my bad.

But if you hold one of these two companies, I almost hate to say it, but these are such

good long term buy and hold forever companies, so I'm talking about Exxon, ticker symbol

XOM and Chevron ticker symbol CVX, with just like the steady trend line up, these are

going to give you long term on top of the great dividends they give you all the time.

I would almost be inclined to just do nothing and just sit there and hang on to them.

And I know some of you have these stocks in your portfolio right now.

I would say maybe, and again, like we talked about with the two choices that you need to

be making for 2026, I would say, you know, write this down, decide which direction you

would want to go here and then execute it, but it might not be the worst thing in the

world to sell half and then let price come back down and then get your position back

to where it was.

That would be okay too.

But if you just wanted to do nothing and just hang on to these stocks, I don't think that

is ever a bad idea.

I mean, for one, these aren't just oil companies, they're energy companies, they are heavy into

oil still, but we've seen that you just can't replace oil.

Some of these countries have gone maybe a week without it and they're in danger of completely

shutting down.

Like we're just not to the point where we've replaced oil at all at scale.

So you might see some people out there telling you these companies are a dying breed.

They are not, they've been saying that about these companies for 20, 30 years and they

just continue to do amazing and pay you really well for having the wherewithal to hang on

to them.

And then scenario number five.

This has nothing to do with oil stocks, but what about everything else under the sun?

What will the prices of those things do under $200 oil?

Well, the answer is most of them are going to tank and tank for no reason.

Like, if you think we have sweet diversions now, holy crap.

This is probably going to be a generational buying opportunity for almost anything you

could ever want.

And this is where I would probably take a lot of the cash I have and just kind of suck

it up and just start buying hand over fist, you know, a true contrarian investing jubilee,

which means it's perfect to take any oil asset you might have minus chevron and exon.

And immediately put that cash into something that's having the mother of all fire sales.

Sweet divergence everywhere is $200 oil good for any of these companies or any of these

stocks.

No, but is it going to stay there also almost certainly no.

So why would you be afraid to buy these things?

Like back the truck up if you see this happening again, this might happen so quick.

I might not be here to tell you on the weekly podcast that you need to be doing this.

Maybe we will have an emergency midweek episode, but the whole point of this particular episode

is just to prepare you for a situation like this as probable or improbable as you might

think it is.

Because if it ever was going to happen, this and the crisis we're currently seeing would

be, would probably be the one time it would happen.

So we need to be prepared and please know that dumping all of your oil equities and buying

and not just buying feverishly buying things which are seeing record lows in their prices

due to something like this is going to seem absolutely crazy.

Like you might be one of the few people even doing it, but how many times do we have to

see something like this to know that you are not being crazy.

You're not panicking, like everybody else who is going to be wrong, just like they always

are when they panic.

You're just being early.