That's great, it starts with an earthquake... birds and snakes and aeroplanes. I have R.E.M.'s seminal "It's The End Of The World As We Know It" running through my head this morning. The scenes from Ukraine that I witnessed last night and early this morning were stunning. Hard to process, but here are a few random thoughts.
There will be someone on FinTV telling you that this is a buying opportunity. Ignore. Turn it off. This is not a buying opportunity for equities. It is one hell of a holding opportunity for equities in the energy sector, and hopefully you have been following the exploits of my HOAX portfolio, here.
This is the ultimate backdrop for HOAX. A world in conflict, in need of hydrocarbon fuels to keep it warm. The European part of that world is also acing the possibility of the permanent rejection of Russia' Nord Stream 2 gas pipeline, and possible damage to existing natgas infrastructure that traverses Ukraine.
Any damage to pipelines makes non-pipeline transportation more valuable. Oystein Kalleklev's (FLNG) owns liquified natural gas carriers that seem pretty darn valuable right now. Watch out also for the oil tanker stocks to rise from their dreadful slumber as well. Nordic American Tankers (NAT) , for instance, has been an absolute dog, but this might be its day. Anything seaborne just became much more valuable after last night's actions.
This is the death of Ark Innovation ETF (ARKK) . Real world problems make Cathie Wood's dreamy fantasies about a melting planet turn into so much fairy dust. Nobody cares now, Cathie, or John Kerry, or Al Gore, or high school dropout Leo DiCaprio. Shut up with your apocalyptic mythologies. This is an actual shooting war. Let's let the grown-ups do their thing.
This is the time for real problems, not made-up ones like climate change. This also hurts Elon and Tesla (TSLA) , and I would not touch those shares with a 10 foot pole here. The way I am currently playing that Tesla-avoidance is being long Michael Tuttle's brilliant Short ARKK ETF, (SARK) - TSLA is ARKK's largest holding - and as well as long some (QID) , ProShares' inverse QQQ fund. Tesla got so big that it is big enough to sink the Nasdaq, and not the other way around. If Tesla does not receive the go-ahead from local water authorities in Brandenburg (the yea/nay decision is scheduled for next Friday, March 4th) to fully open its Gruenheide plant, there would then be a very good chance that that plant would never be allowed to produce at scale, and thus Elon's asset would be stranded. Be very careful with TSLA here.
But in the midst of destroying Wood's pathetically leaky ARKK, I am quite aware that my Real Money Best Idea for 2022 was Nornickel. Yes, a Russian nickel company. Yes, (NILSY) is down a mere 22.89% this morning. Ouch. Yet nickel prices have risen about 15% on the LME thus far in February, and I am seeing them quoted on the LME this morning at $25,315.50. This is a risky trade, for sure. Do not bet the house on it, but do bet on the fact that Russia is the number one producer of nickel in the world and that Nornickel is the number one producer of nickel in Russia.
Finally, Vlad has given us all the chance to reflect, and to remove the crap names from our portfolios. The bounce we have seen in the Nasdaq from 9:30 am to 10 am this morning, was the ultimate selling opportunity. Don't miss another one. Just dump the overpriced hopium names from your portfolio. Now.
Let's see what happens in Ukraine tonight. I will have another Real Money column tomorrow.
