New artificial intelligence report from the analyst who recommended Nvidia at $11
The Big AI Die Up Is Coming
Which Side Will You Be On?
Millions of investors risk being wiped out by this looming catastrophe while those who follow this map now could make a fortune…
WARNING: Do Not buy any ai stocks until you read this FREE REPORT
Dear Reader,
The next Big Die Up is here…
Only this time, it’s not in pot stocks, cryptocurrency, or U.S.
housing… it’s artificial
intelligence.
But make no mistake…
It doesn’t matter what the mania comes disguised as, the exact same
pattern is unfolding and unless you know what’s coming, you could be
wiped out.
So if you’re thinking of investing
in any AI stock, then this could be the most important report you read this year.
One that could not only save you from financial catastrophe but could potentially
make you one of the few investors who make a killing from today's artificial intelligence
mania.
You see, while there is no doubt that the recent advancements in
artificial intelligence are game changing and will drive colossal innovation in every sector of the
economy...
There's also no escaping that
The Big AI Die Up Is Coming
I did it in 2007 when I predicted the housing market was about to
implode and recommended shorting Fannie Mae and Freddie Mac.
I did it in 2017 when I warned investors that Bitcoin – despite its
long-term potential – was in the midst of a full-fledged mania:
“My warning is the price action of
bitcoin and other virtual currencies is very dangerous in that most people dramatically
overestimate their capacity to tolerate volatility and risk.”
And we did it 2018 with pot stocks writing…
“All manias end the same way. Prices
eventually reverse, often sharply, and go on to retrace 50%-80% or more of the entire rally until
the last bull finally throws in the towel.”
Now, I’m going to show you how to
successfully navigate this new investment mania in artificial intelligence... and the story starts
with this 139-year-old map of Wyoming...
In the aftermath of the Civil
War, a new “gold rush” was underway.
For decades the Great Plains had been the domain of the buffalo, and
their numbers were seemingly endless.
Luke Voorheese, an early settler, wrote that he’d traveled 200 miles
through a single herd of buffalo.
However, as the post-war economy ramped up, the demand for buffalo
was insatiable.
Their hides were used for belts on factory steam engines,
waterwheels, warm clothing, horse harnesses, and much more.
And exterminating buffalo became the unofficial
policy
of the U.S. government.
The army gave away free ammunition to buffalo
hunters.
The newly built Union Pacific Railroad brought thousands of hunters
onto the plains. And soon, piles of bones like this littered the West.
It wasn’t long before almost every bison in the
United States – some 20 million animals – had been slaughtered…
… and replaced by cattle.
In the first of the fabled “cattle drives,” 35,000 cattle traveled
north from Texas searching for fresh pastures.
Seventy-five thousand came the following year.
By 1871, more than half a million
head of cattle a year were migrating northwards into the plains where “the buffalo roamed” not
long ago.
In the two decades following the Civil War, more than ten million
cattle migrated onto the northern plains, along with half million horses and 50,000 cowboys.
And
the once-deserted Great Plains boomed as new cattle towns popped up all across the
West.
These towns thrived as the value of U.S. meat production soared to
$1.4 billion – roughly 20% of America’s GDP at the time.
Thousands of people settled in these new towns, with saloons,
casinos, shops, dance halls, theaters, and restaurants springing up to cater to the new
residents.
Within a few years, these Cattle Towns were the wealthiest places in
America.
And the most famous of them all was
Cheyenne, Wyoming.
In just a few years, this cowboy encampment went from “a handful of
people” to more than 3,000 residents… and soon boasted the highest per capita income in the
world.
The “Cattle Kings” built lavish mansions, threw extravagant parties,
and imported the finest clothes and jewels.
And Cheyenne became the “center” of
the West, with its main street housing an opera house, the Atlas Theater, and the Inter-Ocean
Hotel.
But nothing signified the wealth of this town more than the
establishment of the Cheyenne Club.
It was designed to surpass the
luxuries offered in London’s finest social clubs.
Sprawling over three stories, the Cheyenne Club had rooms for
billiards, reading, smoking, dining, and games.
It boasted an indoor tennis court, hardwood flooring in every room,
a wine cellar, and every other extravagance of the time.
Champagne was served with every meal, and it offered the finest food
from around the world – even fresh oysters.
And all this prosperity was unlocked
by the vast abundance of cattle ranching on the Great Plains.
But the cattle trade alone doesn’t tell the whole story of how
Cheyenne became the wealthiest city in the world.
You see, it wasn’t only the cowboys
and Cattle Kings that rebuilt the U.S. economy after the Civil War…
And if it wasn’t for the invention
of one disruptive new technology, this incredible economic boom may never have happened.
It’s
an invention that transformed the natural abundance of the Great American Plains into an
economic engine of unparalleled power.
Yet, its impact is often ignored by historians who prefer the
romanticized story of intrepid cowboys wrangling cattle on the vast open plains.
But the reality is, without this one invention, Cheyenne would never
have become the wealthiest city in the world.
And as strange as it may seem…
This map of Wyoming – and the story it tells – holds the key to
navigating the recent AI boom.
Let me show you how...
THE BIG AI DIE UP
Hi, my name is Porter Stansberry.
Almost three decades ago, I started a financial research firm with
nothing to my name but a borrowed laptop.
Working from the kitchen table of my 3rd-floor
apartment in one of Baltimore’s most notorious neighborhoods…
I wrote about the disruptions, opportunities, and risks I saw in the
financial markets.
I had no “right” to do this…
I wasn’t a stockbroker or financial analyst.
I’d never worked for an investment bank or on Wall Street.
And beyond having access to the SEC’s database of financial
statements and annual reports, I had no special insights into corporate America.
But from that first report –
published in the late 90s – my firm would grow into one of the world’s largest financial research
companies.
And while you may not have heard of me or my firm…
For almost 30 years we were on the frontier of the financial
markets… accurately predicting many of the world’s most important economic stories.
The 1997 emerging market collapse…
the Japanese 1998 banking crisis… The Dot-Com blow-up of the 2000s…
The demise of General Electric… the
bankruptcy of General Motors… and the 2008 financial crisis, along with the fall of Fannie Mae
& Freddie Mac…
We warned of these catastrophes – and many others – long before Wall
Street or mainstream financial media…
That’s why our research has been featured by almost every major
media outlet, used by Presidential advisors, economists, and even reportedly landed on Warren
Buffett’s desk.
I’ve also personally predicted the rise of many of the world’s
leading companies today, including Apple, Amazon, Nvidia, PayPal, and Microsoft…
A major financial event is looming.
And unless you prepare immediately
you could see your portfolio wiped out as this event sends shockwaves throughout the
markets.
I believe losses of 50% or more could be coming to this sector… along
with a second “lost decade” of flat (or negative) returns that could destroy your retirement
prospects.
Yet
nobody is warning you.
In fact, almost everyone is spurring this force on.
The mainstream media, the financial press, and investment pundits
are all dumping gasoline on the fire.
1886, THE FIRST DIE UP
In the 19th century, one new technology
transformed America’s Great Plains. A radical new invention that helped ignite the U.S cattle
boom…
Barbed wire.
Invented by three farmers at a county fair in DeKalb, Illinois,
barbed wire transformed the ranching industry.
Before its invention, animals roamed freely.
Most ranchers couldn’t afford to fence in their herds or define
their property boundaries.
The only real option was wooden fencing but wood was scarce on the
Great Plans and had to be brought in on railcars.
It was expensive, labor-intensive to erect, and easily damaged by
herds of cattle.
Barbed wire solved these
problems…
And by doing so unlocked huge productivity gains in ranching.
The new low-cost barbed wire fences allowed ranchers, for the first
time, to define their property like you can see on this 139-year-old map of Wyoming...
It allowed them to contain their herd to a
specific plot of land, it helped them protect cattle from the dangers of the open plains.
The result was a 80% reduction in
annual bull mortality.
But that’s not all.
Barbed wire fences also meant breeding could be accelerated...
access to the best grasslands could be controlled… cattle couldn’t
escape… and rustlers couldn’t steal animals as easily.
It also reduced ranchers’ need for cowboys to watch over the
herd.
Instead of roaming the vast plains, ranchers could keep their cattle
contained, control their movements and diet, and better care for the animals.
This simultaneously reduced the cost
of ranching while also boosting the productivity of ranching.
It’s
why historians point to barbed wire as the catalyst that ended the open-range cowboy lifestyle…
and revolutionized beef agriculture.
The economics were obvious: The bigger the ranch, the greater the
returns from barbed wire fencing. So demand for both ranch land and steel soared.
The following frenzy will be familiar to anyone who remembers the
Internet bubble of the 1990s, the housing boom of the early 2000s, or crypto in 2020…
Seemingly endless demand for beef, amplified by the possibilities of
barbed wire, created the impression of a “can’t lose” investment.
Fortunes poured into ranching with
many of the country’s wealthiest people getting swept up in the mania, including:
The list goes on.
And the frenzy didn’t stop with the Yanks.
Imported American beef rapidly began to replace British beef as the
premium meat…
In 1876, England imported just 1,732 tons of fresh beef.
Two years later, imports surged to more than 30,000 tons, with 80
percent coming from the United States.
WINTER IS COMING
Bubbles attract pins.
The winter of 1886-1887 was the pin for the cattle boom.
No one had ever seen anything like it.
In January, the snow started falling, and it didn’t stop for ten
days.
The temperature plunged to -60 degrees, the
coldest winter on record.
There was so much snow and so little grass that the cows who didn’t
freeze to death, starved to death waiting for spring to arrive.
When spring finally came, hardly any cows were left – more than 1
million had perished over the winter.
The cowboys called it “The Big Die
Up.”
And it wiped out virtually every large cattle ranch.
As, Christopher Knowlton, author of Cattle Kingdom, writes:
“The deadly winter proceeded, almost biblical in its ferocity and duration, as though it had every intention of humbling and shaming anyone who had participated in the great cattle boom.”
“I wish I was sure I would lose no more than half the money I invested out here.”
When all was said and done, Roosevelt lost 75% of his herd and virtually all his money.
THE NEXT BIG DIE UP IS HERE
The cattle boom of the 19th century was the first
genuine global investment mania.
A new technology (barbed wire) converted the incredible abundance of
the Great Plains into an enormous economic engine for beef… and the demand was believed to be
unlimited.
But barbed wire was useless to keep out the snow.
And in a story that’s all too familiar, investors caught up in the
frenzy lost almost everything.
The desire for quick and easy riches overrode any sober analysis of
whether the market could sustain this type of growth or potential risks.
As more and more investors poured in more and more money, the bubble
continued to grow until, eventually, it ended.
Time and time again, investors get caught in the same
trap.
The South Sea Bubble, the railway mania, the Dot-Com boom, the 2000s
housing bubble, the rise of cryptocurrencies…
History is replete with examples of
what happens when a disruptive technology and the promise of market disruption meet excess
capital.
This brings us to artificial intelligence.
Advancements in artificial intelligence have catapulted the investment community into an unbridled frenzy of starry-eyed optimism.
The New York Times raves that AI could add $4.4
trillion to the global economy.
Politicians, pundits, and the media say it will “change
everything”…
Search volume for AI has gone stratospheric…
And artificial intelligence is now talked about by the media as much as Bitcoin, during the all-time high run of 2021.
Angel and seed deals have grown too, with 107 new deals and $358.3 million invested in 2022 compared with just 41 and $102.8 million in 2018.
AI-oriented ETF fund inflows have surged by 30%,
with retail investors dumping millions into the sector.
The investment mania around AI is so frenzied that it is effectively
fuelling the entire 2023 stock market rally…
Just seven tech firms in the S&P 500 are responsible for almost
all the returns this year (up 58%) with the remaining 493 companies up just 4%.
And in a story that's almost identical to the Dot
Com and crypto bubbles…
Earning calls for the largest tech
companies have seen 190 mentions of “AI” versus 36 a year ago.
As analysts for TAM Asset Management report:
“Companies that mention the word AI in their earnings are seeing boosts to their share price,” and that "smells very much like the dot-com era."
The same happened to BigBear.ai, which skyrocketed by almost 700% in just one month.
Or software firm C3.ai…
It has surged 252% since the start of the year.
Then, there’s Nvidia…
(A company I first recommended back
in 2016 when it was trading for just $11… a return of close to 4,000%.)
As the leading architect of computer chips, Nvidia is on the
frontier of the artificial intelligence market.
Their chips power over 95% of the world’s top AI systems, including
ChatGPT, and they have a virtual monopoly on the market.
And with the frenzy around AI going mainstream, Nvidia’s stock has
gone vertical…
It's now trading at almost 40-times earnings.
To put this in context (and to give you an idea of what could be
coming for Nvidia), here’s what Sun Microsystems – the one time Dot Com darling – CEO said:
“At 10 times revenues, to give you a 10-year payback, I have to pay
you 100% of revenues for 10 straight years in dividends.
That assumes I can get that by my
shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer
company.
That assumes zero expenses, which is
really hard with 39,000 employees.
That assumes I pay no taxes, which
is very hard.
And that assumes you pay no taxes on
your dividends, which is kind of illegal.
And that assumes with zero R&D
for the next 10 years, I can maintain the current revenue run rate.
Do you realize how ridiculous those
basic assumptions are? You don’t need any transparency. You don’t need any footnotes. What were
you thinking?"
It was the same story with Cisco…
It was the Nvidia equivalent of the Dot Com era.
It was the leading provider of networking infrastructure.
No competitor came close to its dominance, with roughly 75% of the
internet traffic going through their equipment.
From its February 1990 IPO through to 2000, shares compounded at an
incredible 102% per year.
At its peak, Cisco was the largest company in the
world, valued at $500 billion – roughly 60x sales.
It continued growing, with revenues more than tripling from $12
billion to $40 billion by 2010 – roughly 10% per year.
The problem was that this was a significant deceleration from the 40% average growth rate from
1995 to 2000.
As competition sprang up, Cisco
gradually ceded market share, going from 75% in 2000 to 55% today.
Meanwhile, growth for internet networking equipment slowed as the
market matured.
However, when you’re valued at 60x sales, you can’t afford even a
modest growth slowdown.
Despite revenues growing 4-fold since 2000, Cisco investors have
suffered two decades of negative returns.
Like Cisco in the Dot Com era…
Nvidia is now “priced for
perfection.”
It must continue to grow and execute flawlessly to maintain its
current valuation. Anything less than perfection will likely lead to enormous losses for
investors.
It's the same story for the other AI-related
firms…
Microsoft and Adobe (trading at
roughly 11x sales), Atlassian (14x), Palantir (16x), C3.ai (14x), and Snowflake (22x).
Betting on perfection is a fool's
errand in any environment. But it's especially hazardous in today’s uncertain market.
Despite this, investors fuelled by fear of missing out and dreams of
quick riches, continue to pour money into Nvidia and other AI firms.
That’s the problem with bubbles…
And what makes them so hard to resist…
There is always some truth behind
the hype.
The Dot Com bubble birthed the internet. The mobile bubble birthed
the iPhone. The crypto bubble birthed Bitcoin.
And there’s zero doubt in my mind
that artificial intelligence will also, eventually, birth many disruptive new products.
But before that happens, the bubble will pop.
There will be a mass extinction event and only a few businesses will
make it to the other side.
Consider the crypto market where literally thousands of projects
that promised to revolutionize industries and be “the next big thing” have crashed to zero.
Or the Dot Com Bubble when hundreds of tech firms held IPOs each
year, almost all of which went bankrupt when the bubble bust, and even many of the survivors still
trade well below their highs:
- Intel – 59% below dot-com peak.
-
Cisco – 39% below dot-com peak.
-
Sun Microsystems - sold for
97% below dot-com peak.
Even Microsoft that “only” fell 75% from its peak took 17 years to surpass its dot-com highs. That’s almost two decades of flat or negative returns.
So although Nvidia will likely remain one of the
dominant players in the artificial intelligence market…
In order to make a sizeable return on your investment now, Nvidia
needs to execute flawlessly for years to come.
History tells us this is unlikely. And I believe investors caught
up in the hype of AI could see catastrophic losses when the bubble eventually
pops.
Remember, when the Dot Com bubble burst the NASDAQ plunged
77%.
Blue-chip darlings like Sun Microsystems
collapsed by 90% or more.
Hundreds of hot stocks vanished altogether… Pets.com, WebVan, eToys,
Boo, Kozmo… the list of “revolutionary” companies that went bust is endless.
When
all was said and done, the wealth of an entire generation of overeager investors was decimated –
and it’s the same story with every bubble.
You can be directionally right, you can be correct in your analysis
that a technology will change the world, but the price you pay matters.
Even the best businesses are terrible investments if you pay too
much for them.
And right now millions of investors are rushing into grossly
overvalued artificial intelligence and tech stocks that have almost zero chance of maintaining their
current value.
So unless you can weather a 50% (or more) decline in your investment
and can afford to wait 10 years (or more) for your bet to pay off… then I’d urge you not to invest
in overhyped artificial intelligence firms.
You see, there are artificial intelligence investments that will make investors a fortune
in the years to come but it’s too early and too risky to tell who the winners will
be.
What is clear right now, however, is the companies you should avoid at all costs – the ticking time bombs in your portfolio that could crash to zero when the music stops.
The companies who’ve jumped on the AI bandwagon as a way to drum up new investment, inflate their valuations, and capitalize on the mania…
That’s why I want to give you a brand-new research report my firm has produced – and why I urge you to read it now before it’s too late.
It’s called Artificial Illusion.
Inside this special briefing you’ll get an unflinching view into what’s really going on in the artificial intelligence markets, why much of what you’re being told is a lie, and how you can see through the hype.
My analysts and I detail the sector in a way you’ve never seen before…
We analyze the current market (and the key companies in it) with a sober, unbiased view that cuts through the hype and misinformation that is leading most investors down a dangerous path.
We detail the companies you must avoid at all costs… along with the companies who could benefit from AI over the long-run.
These are not investment recommendations but rather firms you want to keep an eye on in the months and years ahead.
The companies my team and I are watching because of how they’re applying advancements in artificial intelligence to strategically grow their already exceptional businesses…
… and that once the mania of the sector crashes and valuations return to earth we will consider buying.
In fact, there are three companies in particular that we’re carefully monitoring… and along with your copy of Artificial Illusion I’d like to send you our research analysis of each.
The first is a fintech company that’s on its way to becoming a $1 trillion powerhouse - an undisputed leader in its field thanks to recent advancements in AI.
The second is a cosmetic firm whose proprietary algorithm has enabled them to grow their earnings nearly every year for the last decade.
The third is an equipment manufacturer that, believe it or not, may end up literally saving the world 20 years from now.
Nobody else – whether it’s the mainstream press, investment bank, Wall Street firm, or independent financial publisher – is telling you this story but it’s critical you’re aware of it.
And in just a moment I’ll show you how to grab your copy of Artificial Illusion before it’s too late.
Remember, it was a freak snowstorm that decimated the cattle speculators in
the 1880s.
For Nvidia the threats range from competitors encroaching on its
market share, to a global recession, to a Chinese invasion of Taiwan – an event that could wipe out
25% of Nvidia’s business overnight.
Forecasting the future competitive landscape of an emergent
technology, or pricing in geopolitical risk is difficult.
In order to justify these current tech valuation, investors must
grapple with a series of highly uncertain future scenarios.
And as I’ve shown you, the risk/reward for almost all these companies is simply not worth taking, especially when there are far superior opportunities available.
THE TRADE OF THE DECADE?
While AI and tech firms are grossly
overvalued…
There is one sector that is massively undervalued.
It’s out of favor, and has been for years, but if you’re willing to
go against the crowd, there are potentially outstanding opportunities available.
I’m talking about once-in-a-decade opportunities.
In fact, the last time the set up was this “perfect” was in the late
‘90s.
As investors got swept up in the mania of the internet boom, they
ignored other “old economy” sectors.
By the peak of the Dot Com bubble, these “old economy” companies
were at historically cheap valuations which were the inverse of the overvaluations in tech
firms.
Case in point, at the peak of the mania, the tech sector was trading
at a price to sales (P/S) ratio of 7 and a price to earnings (P/E) near 60.
The energy sector on the other hand was trading at a P/S near 1, and
an average P/E well below 20.
When the Dot Com Bubble burst there was a massive “mean reversion”
that resulted in energy stocks exploding in value.
Energy stocks not only outperformed tech stocks but also the broader
market for most of the following decade.
Investors who had been buying energy stocks at their historically low valuations (while everyone else poured into overhyped and overvalued tech stocks) made fortunes.
The stage is now set for a similar opportunity.
Except this time, the market return could be even greater.
In fact, I believe this sector offers one of the greatest investment opportunities
of the last decade. And I’m not the only one, Warren Buffett has spotted this unique opportunity
too.
Buffett’s recent energy plays are among the biggest he’s ever
made.
Consider this…
Buffett's total cost basis for Coca-Cola was $1.3 billion.
And he started buying Apple in 2016 and bought $6.7 billion that
year.
Coca-Cola and Apple are right at the top of his signature stock
picks and best performers.
His energy investments in 2020 were over $29 billion.
And this year he’s continued to load up on energy stocks with news
of a $3.3 billion takeover of Cove Point LNG – a gas export terminal in Maryland.
Buffett knows supply and demand in the energy market hasn’t been
this favorable since the 1970s.
Not only is the energy sector inexpensive relative to technology
firms. It’s incredibly cheap on an absolute basis as well.
In fact, as the chart below shows, energy stocks currently offer a
free cash flow yield of more than 13% – nearly double their yield in the early 2000s.
In other words, energy stocks are significantly better value today than they were back in 1999... and I believe offer even greater upside potential.
You see, for years now energy firms have been the #1 target of the
radical left.
Climate change zealots, progressive politicians, and their allies in
the mainstream media have convinced millions of Americans that unless we abandon fossil fuels
immediately the world will end.
“[China] put more new coal plants into operation last year than the rest of the world combined, and its proposed new coal mines account for almost a third of the global total.”
“Trying to live without fossil fuels could “result in billions, not millions, of fatalities from diseases, malnutrition, and weather-related deaths.”
This supply-demand reality is unavoidable and investors who position
themselves correctly could potentially see significant returns in the years ahead.
Because history shows the best time to invest in any sector is
precisely when it’s undervalued.
And right now, with the money out chasing tech stocks…
Both institutional and individual investors have left the boring
“old economy” sectors like energy in the dust in favor of new darlings like Nvidia.
Energy is by far the cheapest sector in the S&P 500…
My team and I are monitoring several companies that we believe could be the winners of this mounting supply-demand issue.
Again, these are not investment recommendations (only our paying members get our active buy and sell alerts) but are instead our favorite companies in the sector.
And I want to detail each of them for you so that you can add them to your investment watchlist – whether they’re right for you or not is your decision to make.
DIRTY
ENERGY FORTRESS
The first opportunity is a dirty energy
“fortress.”
It’s a tremendous opportunity to
capitalize on the repeated failure of woke, modern energy policies.
You see, despite the trillions of dollars spent on renewable energy
investments and tax incentives…
Alternative energy like wind and solar have failed to make even a
dent on fossil fuel consumption.
According to Goldman Sachs over the last decade, a staggering $3.8
trillion has been invested into renewable energy sources.
During that same ten years, guess how much the percent of global
energy consumption from fossil fuels fell?
Exactly 1%.
From 82%... all the way down to 81%.
Yet despite this failure, governments around the world – especially
in Europe – continue to block the development of fossil fuels.
This has created a huge distortion in the energy market – including
last year’s global gas shortage, which sent prices for natural gas and liquefied natural gas (LNG)
to new record highs.
And while the pain of global LNG shortages were postponed thanks to
one of the warmest winters on record, the gas shortage is still coming – it’s unavoidable.
Even in early 2021, the writing was on the wall when research firm
S&P Global Platts forecast that LNG demand would exceed supply through at least 2025.
And this was before the Russian invasion of Ukraine.
The Western sanctions on Russia took vast swaths of their gas and
oil out of circulation, putting even greater pressure on the already fragile EU energy
markets.
Russian natural gas imports into Europe and the United Kingdom
dropped by 50% in 2022 versus the prior five-year average:
Now, Europe has to replace a record amount of
missing Russian gas, which will only intensify that demand in the years ahead.
As Exxon Mobil CEO Darren Woods emphasized at a Wall Street Journal
CEO Council Summit…
““You look around the world, and the balance is, the world will be
short [of liquefied natural gas] probably through 2026…
That’s how we’re seeing that balance
play out – it just takes time to bring these very large, capital-intensive projects on
stream.”
Europe replacing Russian gas represents one of the largest re-shuffling of global energy flows in history… and it will have major implications on energy prices for years to come.
COLD WAR 2.0
Warren Buffett has been investing in energy like
never before.
He’s been adding to his Occidental
Petroleum holding hand over fist and just completed a $3 billion takeover of a Maryland-based LNG
export terminal.
Now you can buy what Buffett is buying, and you’ll likely do very
well.
However, Occidental is a mega-cap stock. And it’s no secret that
Buffett loves it. Which, of course, limits its upside potential.
So while OXY remains a great investment, there is a secret to
potentially making far greater profits in energy companies. And I’d bet not more than 1 in 1,000
investors knows about it.
I learned the secret from legendary energy tycoon T. Boone
Pickens.
The secret he shared with me is a way to separate the cash flows
from the overhead and the risks of the oil business.
And I believe it’s ideal for the months and years ahead…
You see, even as governments around the world attempt to limit
“dirty energy”, they can’t escape reality.
Fossil fuels are what powers the global economy, providing more than
80% of the world’s energy supply.
What legendary oil man, T. Boone Pickens, taught me remains one of
the best ways to take advantage of this.
It’s a special way to turn a capital-intensive business into a
capital-efficient one.
The key to understanding these businesses is that they don’t have to
pay any of the production costs or take any developmental risks.
They own the mineral rights, and all capital and operating expenses
lie with the operator.
And that means, as inflation continues to drive energy prices
higher, the mineral rights they’ve acquired in the past become more and more valuable.
These royalty companies can make investing in oil and gas much
safer.
They transform a capital-intensive industry into a capital-efficient
one that’s virtually guaranteed to produce increasing returns across time.
In fact, these “companies” aren’t really businesses at all.
They are just a legal fiction that can generate enormous wealth by
separating the value of the resource from the risk and expense of production.
Well-run mineral rights businesses are truly one of Wall Street’s
greatest secrets.
Case in point, the leading Permian Basin royalty company has
averaged an incredible 77% free cash flow margin over the last five years...
And since going public in 2014, its production figures have grown
nearly 10-fold, from average daily volumes of 3,000 barrels of oil equivalent to 28,000 in just
eight years
Investors have reaped the benefits, with the stock outperforming the
broader energy sector by a factor of 3.5 to 1 since its inception as a public company.
But this isn’t all you’ll discover inside Cold War 2.0…
This briefing features two energy royalty
companies:
The first is, in my opinion, the best oil and gas royalty company in
the energy sector.
It’s one of the most capital-efficient businesses you’ll find
anywhere, with 80% free cash flow margins.
It currently trades at a 15% free cash flow yield – the best
valuation since the COVID-19 pandemic.
The second is one of America’s largest natural gas mineral owners,
with an asset base spanning 20 million gross acres across 41 U.S. states.
Its capital-efficient royalty model converts over 60% of revenue
into free cash flow, and the company is enjoying rapid growth due to rising U.S. LNG exports.
It has a pristine balance sheet with no debt, pays a 12% yield, and
trades for less than 9x free cash flow.
All the details of these two energy companies are inside COLD WAR 2.0, but that’s not all I’ve set aside for you today…
THE NEXT LNG
GIANT
HOW TO GET
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SPECIAL
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Typically, for access to my firm’s
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However, the stories I’ve told you about today is something I
believe every person should have access to.
Because with everyone running headlong into a bubble in artificial
intelligence and tech stocks…
A rare window of opportunity has opened up in the energy sector with
firms trading at insanely low valuations.
That’s why – for one of the first times in my firm’s history – we are
giving you access to our research without the $1,425 fee.
That’s right, I want to give you
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service.
These are all quintessential “Porter Stories.”
They are the kind of major ideas I have focused on my entire
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I’m not interested, personally, in trying to jump on the latest
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I want to find opportunities that I can invest in for years and
years that can generate real, lasting wealth.
The kind of wealth that I can depend on, that I can plan on, and
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Every week you’ll get a briefing exploring the most important, yet
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Outside of research teams inside hedge funds, banks, and private
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Our team includes Wall Street legends like Martin Fridson, former
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What’s more, you’ll also get access
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FREE BONUS BRIEFING:
THE GOLDMAN SACHS OF WHITE TRASH
This is one of
my most controversial reports ever...
It reveals a nearly foolproof way to profit on the growth of
poverty in America.
It details a subprime auto lender. Now, owning shares of a
business making subprime loans to poor people isn’t going to endear you to the progressives.
But I don’t care…
This business is phenomenal.
It’s profitable, capital efficient, and generated 63% free
cash flow margins over the last five years, and today trades at just 13x earnings.
And when you take advantage of this special
offer you will
get instant access to this bonus investor briefing, at no extra cost.
And when you take advantage of this special
offer you will
get instant access to this bonus investor briefing, at no extra cost.
Just click the
button below now to secure your massive $1,200+ discount… your bonus reports… your bonus
newsletter access… and everything discussed today.
Just click the
button below now to secure your massive $1,200+ discount… your bonus reports… your bonus
newsletter access… and everything discussed today.
HERE'S EVERYTHING WAITING FOR YOU TODAY WHEN YOU TAKE ME UP ON THIS SPECIAL OFFER
- 87% DISCOUNT on Porter Stansberry's research
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Saving of more than $1,200 (access usually costs $1,425)
- Special Briefing: The AI Illusion
- Special Briefing: The $1 Trillion Powerhouse
- Special Briefing: The Prettiest Stock on Wall Street
- Special Briefing: The Apple of Agriculture
- Special Briefing: A Dirty Energy Fortress
- Special Briefing: Cold War 2.0
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Special Briefing: The Next LNG Giant
- BONUS Report: The Goldman Sachs of White Trash
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Weekly investment insights
from Porter Stansberry
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Plus much, much more.
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