Come on up for "The Rising". The lyrics of Bruce Springsteen echo through my head as I am heartened to read stories of regular folks rising up against the modern-day tyranny of Climate Hysteria and, more broadly defined, ESG. I just cannot remember a time in my 50+ years of existence that there was so much constant propagandizing in the mainstream media about... well, everything.
While brilliant pranksters like Just Stop Pissing Everybody Off continue the great British tradition, as exemplified by Monty Python and even Benny Hill, of ridiculing excess - in this case, by interfering with the penny ante histrionics of the complete crazies that compose Just Stop Oil - it saddens, but does not surprise me, that Wall Street often follows in lockstep with this ridiculous ESG-loving propagandizing.
But some of us are rising against it via our portfolios, and that is where my HOAX model portfolio, which I first propagated in my Real Money column of 12/30/21 comes in. As Exxon (XOM) and Chevron (CVX) rise in today's market, shaking off what were admittedly lackluster 2Q results from both companies, HOAX will continue to rise. But that's what non-propagandizers do. We tell the truth.
I am not Pollyanna. Exxon and Chevron both reported underwhelming results last Friday. Full stop. But markets are forward-looking, discounting mechanisms. The rise in crude oil prices the past week - Brent is currently quoted at $85.84/bbl and WTI is quoted at $82.28/bbl as of this writing - and that means that the next set of results from XOM and CVX - 3Q23 results, which will be reported at the end of October - will be much stronger than those of 2Q23.
These companies are price-takers. They provide a commodity, which just like water, food and sunlight itself, humans need to live what, in 2023, we would consider to be a modern, civilized life. Yes, oil is a natural resource. Yet, there are those that would have you believe that Exxon and Chevron, with other Big Oil companies like Shell (SHEL) , are somehow "killing the planet" Get serious.
Those who are rising have enjoyed a 60.7% gain since HOAX's inception date, assuming they have followed my updated trades. Yes, I believe in active portfolio management and on April 2nd of this year, at my firm, Excelsior Capital Partners, we pivoted hard toward black oil. The coal names, Arch Resources (ARCH) and Peabody (BTU) , were monster performers for HOAX after inception, but one has to follow the tea leaves, and I wanted some exposure to the aforementioned SHEL, as well as Australia's Woodside Petroleum (WDS) and Norway's Equinor (EQNR) in the portfolio.
It is a great big world out there. And all its inhabitants consume hydrocarbons.
In that same time period, Cathie Wood's (ARKK) has fallen 53.6% versus HOAX's 60.7% gain. Yes, Jim, we get it. You are not a big fan of Cathie's. More relevantly, though, the S&P 500 has fallen 4.1% during HOAX's 1.7 years of existence. Did I know in December 2021 that the S&P 500 would peak at 4796.56 on January 3rd of the next year... and not regain those levels? No, but I was firmly convinced at Christmas 2021 that interest rates needed to rise to combat a generational wave of inflation. And, boy, have they.
If you believe in relative performance, HOAX's has been sublime. It is a rising of a different sort. A rising in brokerage account values. That always feels good, but, again, we are rising against a wave of idiocy that is tangible.
I honestly cannot predict when people will come to their senses, but with HOAX's relative (and absolute) gains carrying the day for ExCap, I will say this one more time. Jimmy, crack corn, I don't care.
I am writing from Brazil where a project has taken me many times since the onset of the pandemic. This project is very close to competition. When this figurative baby is born, I may no longer be able to contribute to Real Money. But just know that as I stare out at the Atlantic from the magnificent Bahia beach of Praia do Forte - after enjoying the spectacle of sharing breakfast with some playful macacas, very cute Brazilian wild monkeys - I can tell you that this Big Blue Marble, and that primates that inhabit it, is in damn good shape.
Yet, this morning I was subjected to an article from aggressive propagandizers on FinTV that noted that "southwest Brazil" had hit a record high temperature. I spend so much time in this country, but I was not even aware that there is a region known as Southwest Brazil. I am quite certain that not many people live there, as Brazil's major population centers are concentrated near the Atlantic.
But, please, keep Google-searching for parts of the world that you have never visited and keep cherry-picking outlying weather data. I will just keep investing for my clients.
That's what we are rising against and that's why XOM and CVX keep rising. Those stocks are under owned by ESG-loving institutional investors because of those portfolio managers' adherence to the weird Groupthink of ESG. "I can't own XOM because I am worried that it is hot in Phoenix." In August? Seriously?
I have spent enough time in Phoenix and its suburbs to know that it is always hot in August. Just keep spreading your fertilizer. Those of us who are brave enough to rise above it, and avoid the stench, will keep reaping the benefits in our portfolios.
