RE:RE:RE:RE:What can I say ............Here is below, a quick transcript of a last friday twitters meeting with Eric Nuttall : https://twitter.com/sohaibab9
Start at 4h.41 min or so for about 20 minutes !
Eric words :
I think our biggest job as energy investors is to figure out what is noise and what matters and the noise that you know. I've said the same thing so I apologize if I'm boring. Some people with this, but we get bombarded on either basis with with garbage right? It's garbage, that's it's clickbait. It's meant to sell newspapers, get you to open up articles, whatever.
and so you know let's let's look at a short term demand hit in china from a lockdown in one city and you look at a you know the the biggest community the world's selling off and as stocks selling off 5%
By 5% on what should be a kind of a like two or three week phenomenon?
And so to me, that's noise to me. I try to focus truly on what matters and that is where we are in a structural bummer. Bummer because there are structural challenges to growing supply.
With every fiber of my being and logic, I can demonstrate why demand is going to grow for at least the next 12 to 15 years and so that to me that cookie. That's that's where we're at. We're in an environment of higher oil prices, which I define as a floor of about 100 bucks. You don't give or take. There's going to be volatile volatility. I think we're going a hell of a lot higher than this for the next couple of years.
You can buy into stocks discounting probably 55 to 60, and so does the short term noise like the NASDAQ fell off growth to value fed blood, the reflation trade.
To me, it's all short term isn't my eye is on? How do I make my investors the most money money that I can when I truly believe there's at least a double left in many of these stocks, and so I don't want to be shaken out trying to be short term. Focused to try to avoid, you know, modest drawdown.
When I'm selling a stock trading at 1.8 times cash flow in like 35% free cash yield to try to avoid a 5% drawdown when I think the stock is 150% upside like that. That's just my own stock. We all have to be cognizant of how much volatility we're willing to stomach, but in my mind you got to focus on what matters. What are the drivers of long term demand where the drivers of of supply challenges over the medium to long term?
And where do you want to make the most amount of money? Well, there's a debate. Large cap, small cap services, not gas oil, etcetera. Like everything looks very good.
But I think that's that's our challenge.
You know, ignore the noise. Figure out exactly what matters in. In my mind, there's four things that matter.
Medium long term demand shale growth. OPEC spare capacity and non OPEC you know growth outlook on long cycle that's all that matters to me.
Question about Baytex without mentionning the name :
4H. 44 min. 50 sec. Eric is a couple of people heard you this morning with a certain with a certain management team and then we just got news that you know.
There was a sell off, so I guess you know what's your take on it in regards to the communication of management teams who shareholders and and ensuring that.
you know that there there's a strong understanding there in terms of the expectations or clear you know and that seems to be an issue here in terms of communication with
You know that there there's a strong understanding there in terms of the expectations or clear you know, and that seems to be an issue here in terms of communication with shareholders.
OK, no, I got it so it without getting specific on which company you're referring to, you know, as a guy like let let's say I own 25 million shares of a particular company, this wouldn't be the first time I would have had a conversation with them. You know, it's always a board decision. It's not management.
Some boards are more conservative than others. Some chairmans need pushing more than others, but I I'm. I'm really, really happy with the buy in from everybody. Like I I had a phenomenal meeting with Alex Purvey of Synovus yesterday.
And I had to tweet already and it didn't get approved. But you know, I've I've never met a guy who's so in tune with what the street wants and is actually delivering on it so.
It's I think everybody needs to appreciate how high the barzman set from a $45 billion company saying we're going to return 100% of free cash flow back by our estimates late this year to early next year, and so when I went ask, you know, another company, you know what's what's reasonable. It's it's a bit of a load of question. You know I'm not.
Trying to catch them flat footed I'm I'm trying to help people appreciate how much free cash flow can be returned because, you know, I put out a tweet today talking about the street estimates and the the research quality is just absolute garbage. You know you look at price targets and you know of a particular company. Let's say you know the stock closed at 6:50 and you know average St targets like 7 bucks. Lately, the kernel price that's inferring that they think fair value is like a 16 to 17% f
On a company that just has said that they're drilling wells that are paying out in weeks, which I've never seen in my 19 year career, and so there's just such a breakdown, it it requires people helping kind of steer the generalist guy to to realize kind of what matters, what doesn't.
And see what you know. Reasonable fair value is like I look at the average St consensus on a particular name and my own internal target is is literally twice what those people think. So if anybody thought that I was selling a particular name which we're not mentioning, they would be completely incorrect. You know we were if it wasn't for concentration issues, I would have been a buyer of such a name.