"Ya gotta keep pushin' for the fortune and fame."
I have been writing for Real Money for eight years now, and it's time again to quote Guns n' Roses seminal work, "Paradise City." Axl Rose's line is still as true today as it was when the band released the Appetite For Destruction album in 1987.
Many investors in this market are so deeply ingrained with a 1987-style, Ron Popeil infomercial mentality of "just set it and forget it" when it comes to their portfolios. If that's the way you roll, let BlackRock (BLK) , Blackstone (BX) , and the like dictate your returns, that's fine. They worship at the altar of Jerome "Easy Money" Powell and don't care at all that inflation is making the average person's life much, much worse. Fill up your tank if you don't believe me. Even if you drive a Tesla (TSLA) , take a full charge and see what that does to your electric bill.
Inflation Is a curse. Paul Volcker darn near killed it with his economic shock treatment in the 1980s, but Powell and his merry men and women have resuscitated it with glee. The stock market loves it ... for now. There will be a reckoning. I think that will begin with second quarter earnings reports in two weeks, but, hey, who even cares about "earnings" in price-to-earnings, when Easy Jerome has the market's collective back.
I do. I do research on stocks. It is, for better or for worse, the only job I have ever had.
The funny thing about that green eye-shade-wearing nerdiness is that you occasionally find a diamond in the rough. Or, in my case, 14 of them. So after a two-decade break, I have started writing full-length equity research again, this time for Sao Paulo startup OHM Research. I love it.
I have compiled a dirty dozen-plus-two of the companies that I believe fit several important themes. My Real Money colleague, and old DLJ research department buddy, Chris Versace, does a great job imparting the importance of thematic investing in his columns and elsewhere. Here are the megatrends, themes if you will, that I am playing now. This also happens to dovetail with my coverage universe for OHM.
OIl prices are high and will remain so. The world simply didn't spend enough capital on oil exploration between 2016 and 2020. That was not just a COVID phenomenon, although that obviously exacerbated the underinvestment. We are paying the piper now: $70 per barrel of oil is here to stay, and we may even spike to $100/barrel this summer. Your choice is to complain about it ... or invest in it. My OHM coverage includes Brazilian giant Petrobras, but also a cadre of smaller, Toronto-listed companies that are exploring the Caribbean and African basins for much needed oil.
The world of transportation is decarbonizing. So, that's the world we live in. There is not enough oil to power our global transportation fleet currently, but there is also a growing demand (powered by government incentives) for carbon-free transportation. For OHM, I am following Tesla and VW (VWAGY) as well as a bunch of oil companies. Deal with it. Learn to understand multiple modalities. Companies like Nano One (NNOMF) and Exro Technologies (EXROF) , which I have mentioned previously, will help make electric car batteries and powertrains better. Westwater Resources (WWR) and Lomiko Metals (LMRMF) will provide the graphite, the crucial ingredient for electric vehicle battery anodes.
I would love to go through each of these 14 names in detail, but RM's space constraints limit me from doing so. My OHM Research coverage list is presented above. Feel free to reach out for more.