The ROE for $VALE has averaged 21% for the last 28 years...remarkable.

Yes iron ore is cyclical but being the low cost producer is the ultimate protection against cyclicality.

"We prefer a lumpy 15% return to a smooth 12% return." If you pull up a chart in USD it's easy to say 'meh' but that chart has compounded at over 13% per year on a total return basis over the last 20 years in USD terms despite FX headwinds and a de-rating from 7.1x NTM EV/EBITDA to 3.8x NTM EV/EBITDA

assume $PXD is representative of the marginal oil producer (fairly accurate)

given the *hyper* short duration of shale oil wells, continuing to drill destroys shareholder value vs. keeping it in the ground

drilling w/ hyper decline rates = illusion of stable production

https://twitter.com/Suicide95518428/status/1653734146315890688

the market still hasn't figured out that almost all shale oil capex is maintenance capex, the biggest anomaly of the shale revolution wasn't just the capital destruction, it was the production growth

Hell of a week fam.

Drawdowns are never fun but they are a fact of life as an investor.

Back up to 56% ESG allocation, -5.4% ytd. One positive note to owning a lot of low duration stocks though...at least your expected yield goes way up during the drawdowns. Overall expected portfolio yield now 8.4%.

Petrobras CEO Jean Paul Prates says Brazil’s state-controlled oil company should keep increasing fossil fuel output: "We may be the last to produce oil in the world” bloomberg.com/news/articles/… via @business @business self proclaimed "last oil producer in the world" growing production for "decades to come"

trades at 2x earnings

Porsche SE increases group result after tax to 4.8 billion euro porsche-se.com/en/news/press-… midpoint of 2023 guidance is 5.5 billion euros

current enterprise value 15.7 billion euros

Sum up uranium stonks over the past year. Still some value in the space (also lots of garbage) but requires a lot of patience...1 year is nothing for the fuel cycle but for a cash burning developer it's another year of meaningful dilution in an environment where market discount rates are rising. ☠️

that is *not* the issue so far

https://twitter.com/elonmusk/status/1638614961038712833

That is happening at the margin but it is not material at a system level, at a system level the banking system is still awash with deposits (that's why they don't feel the need to raise deposit rates)

when you prioritize electrons from intermittent wind & solar via egregious market distorting subsidies it destroys the efficiency of the grid by forcing the rest of the supply stack (dispatchable) to dance around wind & solar's intermittency if batteries are the solution to wind & solar intermittency who do you think balances the intermittency without batteries? --> dispatchable generators

Brazilian Energy Policy under Lula: What to Expect - The Dialogue thedialogue.org/analysis/brazi… Worth remembering, most of PBR's profit (and taxes) comes from upstream not refining/marketing.

Approx 75% of the total paid in taxes + dividends goes to the government...taxes are their biggest expense.

Law change in 2016 + market complexity preclude running RTM at a loss

Andrew Dessler has no idea what he’s talking about. Stick to atmospheric models of the future which are unfalsifiable by design.

https://twitter.com/AndrewDessler/status/1585024323353743361

There are a number of reasons for why variable renewables raise the cost of electricity but the key point is they are not replacement capacity they are capacity additions.

you know who else is doing this?

the United States

https://twitter.com/BloombergNRG/status/1560052981873233922

regular reminder that wind & solar does not replace dispatchable fossil fuel capacity

attempting to subsidize the supply side via production tax credits en lieu of a carbon tax ==> the only thing taking out coal is natural gas and that ain't happening at these nat gas prices

Brazil's Petrobras leapfrogs oil majors in dividend payouts ca.finance.yahoo.com/news/petrobras… via @Yahoo @Yahoo How can a company pay a 20% dividend in one quarter?

Trading at 2.2x next 12 month's EV/EBITDA w/ a clean balance sheet and low decline offshore assets.

At historical avg. of 7x it's a $50+ stock...what's the right handicap here?

I'm optimistic for SMRs because it offers hope for a nuclear future in the U.S. -- the nuclear waste issue is minimal and imminently solvable but requires political buy-in and potentially innovation to recycle more of it.

https://twitter.com/POWERmagazine/status/1554107903837192198

I believe it was @JigarShahDC himself that said "we need to build nuclear power plants the way we build airplanes, not the way we build airports"

We have the intellectual and industrial firepower to do it, we just need the political support.

Contrary to conventional market narratives in the West thermal coal demand globally has a long runway of growth ahead of it. Not surprising the growth is driven by relatively poor countries that are more or less following a similar development path to the one the U.S. and Europe pursued ~ 100 years ago.

15 basis point move in the 2s30s today, from inverted to more inverted...yikes the price level of real assets (inflation) is the one variable that the bond market seems to be assuming the Fed can control (even if it means a massive crash) but i doubt that's the right assumption here

jfc wonder if we'll see the BOB spread invert too before this is all over

If you study hyperinflations one of the most important lessons is they are almost always associated with big leftward shifts in aggregate supply curves. This is why wars are often associated with hyperinflation, wars destroy the productive capacity of economies. This of course is a major reason for being smart about your supply chains of both commodities and manufacturing...if you overextend foreign reliance on your supply side it leaves you vulnerable to losing control of your economy in a way that central banks are helpless to remedy.

Let Them Eat Carbon thebreakthrough.org/journal/no-16-… via @TheBTI "Poverty is still a global scourge. More than 700 million live on less than $1.90 per day, and more than 3 billion on less than $5.50."

Be Afraid of Nuclear War, Not Climate Change by @BjornLomborg wsj.com/articles/nucle… via @WSJopinion @BjornLomborg @WSJopinion "Giving the developing world affordable access to consistently available energy—which often requires fossil fuels—is the key to lifting most of the world out of poverty."

net zero ≠ zero

personally, I think 2050 may be (expensively) possible for developed countries but absent massive nuclear expansion or technological step changes in storage, hydrogen, and/or cheap superconductors 2100 is much more plausible the obsession and $ spent on low density and non-dispatchable wind & solar is a fool's errand...nothing wrong with a little bit for grid contributions and distributed solar when economics make sense but without cheap/efficient storage intermittent sources = knife at gunfight

few understand this

stablecoins are effectively unregulated banks operating outside the global payments system

seamless exchange between stablecoins --> btc/eth etc. --> exchanges --> banking system. impairs AML/KYC protocols across the board

https://twitter.com/TheStalwart/status/1405089677313445897

they are also free riding on the stability provided by the U.S. government by pegging to the dollar

want the blessings afforded by U.S. seigniorage, monopoly on violence, rule of law but w/o the burden of AML, KYC, anti-terrorism, banned countries etc. etc.