Spoke Fund® Boards

Government bond yields up, tech stocks down this morning.

WTI down 0.4%, nat gas up 0.6%.

Reports overnight of a new front in the conflict between Israel and Iran, as Israel has targeted at least a dozen vessels carrying Iranian oil. WSJ with more here.

Argus noting a surge in U.S. drilling permit approvals the last two weeks, and, as expected, New Mexico is seeking an exemption from the new Administration's oil and gas leasing pause.

All of which IMHO is an excellent segue into this FT op-ed:

Want a greener world? Don’t dump oil stocks

The transition to cleaner energy is under way. But it’s going to take several decades. In the meantime we need traditional sources of energy. Shouting at oil doesn’t change that. You could even call it, as the UK pensions minister did this week, “reverse greenwashing” — something that might make you look good but that does nothing to fix the real problem.

The rationality is strong with this one.

Friday assorted links

1. WSJ: Value Investors Finally Have Reason to Celebrate - for Now

Value stocks are beating growth stocks by the widest margin in two decades, the latest sign that investors expect the next year to bring a powerful economic rebound.

Cannot believe they said that out loud. Was fun while it lasted, though, right??

2. Today's 'supercycle' sighting:

The Upcoming Commodities Supercycle.

The next bull market isn’t in Tech.

Give that guy a Substack.

3. WSJ: Tesla Faces New Reality of Tough Competition

Customers in Western Europe registered roughly 98,000 Teslas in 2020, down about 11% from 2019, while overall registrations of all-electric vehicles more than doubled, according to Schmidt Automotive Research. Tesla’s share of the market fell to around 13% in 2020 from roughly 31% a year earlier.

4. NYT: Electric Cars Are Coming. How Long Until They Rule the Road?

Around the world, governments and automakers are focused on selling newer, cleaner electric vehicles as a key solution to climate change. Yet it could take years, if not decades, before the technology has a drastic effect on greenhouse gas emissions.

One reason for that? It will take a long time for all the existing gasoline-powered vehicles on the road to reach the end of their life spans.

Disclaimer: This post nor any of the material linked to herein in any way constitutes investment advice. Investing may cause capital loss. The publication of this note is in no way a solicitation or offer to sell securities or investment advisory services.

WTI up 0.9% to $64.60, nat gas down 1.4% to $2.62. Broader market futures flat.

Street consensus for WTI prices now looks like this:

2021E: $53.82
2022E: $57.00

And for nat gas:

2021E: $2.84
2022E: $2.64

Commence head-scratching as you see fit. And would note that expected '22 number for nat gas in particular seems out of whack - if for no other reason than cuz of EIA's target of $3.14 as noted yesterday.

Stay tuned. In the interim, expecting to see all of those walked higher in the coming months.

OPEC monthly report out tomorrow, too.

Today's Sign EVs Are A Bubble

Presenting FT Alphaville’s Electric Vehicle Bubble Watch spreadsheet.

"Once you pop, you can't stop."

It's like a Greatest Hits Album:



Brilliant. My work here is done.

Wednesday assorted links

1. What’s the deal with carbon pricing?

But there is another, simpler reason for Big Oil’s support: it is good business. The board members and executives have a fiduciary duty to their shareholders. In the long run—say, years down the line—carbon pricing may not help them, and it’s possible that carbon pricing would not result in decreased regulation. However, Big Oil has realized that the market today wants to see good immediate financials and pro-environment policies. To help their own stock prices in the immediate future, Big Oil knows that the best move is to support policies like carbon pricing. Investors seem to want environmentalist oil companies, especially if they are profitable too.

2. Yet another 'supercycle' sighting:



3. WSJ: NFTs Explained: What’s Driving Prices for LeBron James and Kings of Leon Digital Collectibles

Guy at the end nails it:

There are people who have been conditioned by cryptocurrencies to believe that just the fact that it can be owned makes it valuable. People just 100% believe that this thing has value, but in fact it doesn’t because there’s no way to get value out of it except for selling it to another investor.

Shifting gears for an early Q4 call in our group. Notes on the private boards to follow.

Disclaimer: This post nor any of the material linked to herein in any way constitutes investment advice. Investing may cause capital loss. The publication of this note is in no way a solicitation or offer to sell securities or investment advisory services.