Portfolio +37.0% YTD, 2.5x the market since inception. Strip out seven mega-caps and the market looks almost normal. Look closer and you’ll find one sector priced like it missed the entire rally.
Hi George, great read today. Been watching these energy companies and maybe you are considering them too: CCJ, EFR:CA, UROY, LEU, BWXT, OKLO, SMR, DUK, D (Dominion Energy). Thanks!
Exceptional dissection of the valuation dispersion! Your insight about the S&P 493 trading at 20x versus Mag 7's 31x exposes something critical: index concentration creates a mispricing arbitrage most investors ignore. What makes your energy thesis compelling is the dual tailwind you identify, AI datacenter demand for nat gas plus structural undervaluation at 0.6x historical multiples. The 10 to 15 percent incremental US gas production forecast aligns with infrastructure capex cycles that typically lag demand by 18 to24 months. One nuance worth considering: energy's discount reflects not just cyclicality but embedded optionality on future carbon pricing regimes. If regulatory frameworks tighten, high-ROIC producers with midstream integration could re-rate faster than the sector average.
Hi George, great read today. Been watching these energy companies and maybe you are considering them too: CCJ, EFR:CA, UROY, LEU, BWXT, OKLO, SMR, DUK, D (Dominion Energy). Thanks!
Thanks! Some were not on my radar. I will definitely check them out!
Exceptional dissection of the valuation dispersion! Your insight about the S&P 493 trading at 20x versus Mag 7's 31x exposes something critical: index concentration creates a mispricing arbitrage most investors ignore. What makes your energy thesis compelling is the dual tailwind you identify, AI datacenter demand for nat gas plus structural undervaluation at 0.6x historical multiples. The 10 to 15 percent incremental US gas production forecast aligns with infrastructure capex cycles that typically lag demand by 18 to24 months. One nuance worth considering: energy's discount reflects not just cyclicality but embedded optionality on future carbon pricing regimes. If regulatory frameworks tighten, high-ROIC producers with midstream integration could re-rate faster than the sector average.