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There aren’t many real geniuses in the investment business.
That’s because investing isn’t all that hard, intellectually. But where it is difficult is the emotional side.
Can you be patient enough? Can you be humble enough to cut your losses when it’s clear that you’re wrong? Can you remain disciplined to a winning strategy when there’s a drawdown?
Most people can’t do any of these things.
Tom Dyson, more than any other analyst, has always understood this challenge and has faced it head on.
Yes, I could tell you dozens of outrageous Tom investment stories, like when he piled into gold in the early 2000s or when he bought Bitcoin at $1 in 2013.
I could tell you about his long-term gains in Microsoft (MSFT), which he recommended in 2006. Or about the incredible gains he’s made for his readers recently in shipping stocks (yes, shipping stocks).
But, quite honestly, the reason you should read Tom Dyson each week isn’t merely because he is a genius at investing and will bring you outrageously good investment ideas.
You should read him each week because he understands the emotional challenges of putting capital at risk and, unlike anyone else in this business, he can guide you through those challenges.
Tom won’t just give you great investment ideas: he will sit in the foxhole with you and fight.
Read him and you’ll immediately see what I mean.
Start here: read his latest issue and recommendation below.
Until now, this was only seen by the paying members of Bonner Private Research, the phenomenal newsletter written by Tom Dyson, Dan Denning, and Bill Bonner.
Then, if you want more (which you almost certainly will), check out the special offer they’ve put together exclusively for Porter & Co. readers by clicking here.
Today, I asked Tom to share his research on why he just made a major portfolio pivot from tankers into oil and gas producers.
By Tom Dyson, Investment Director, Bonner Private Research
Please note: I drew this essay from the weekly note I published to BPR’s paying subscribers on Friday with the reasoning behind our big recent pivot from tankers to oil and gas producers. I lightly edited it.
Six days ago, Ukraine attacked another Russian dark fleet tanker — the Dashan — hitting it with a sea drone.
The list of official Ukraine tanker hits is now at seven by my count. Unofficially it must be much higher. It appears they’re only attacking empty vessels, which is good.
Tankers are slow-moving giants. They are defenceless against sea drones. Talk about easy targets.
Ukraine also attacked an important Russian offshore oil field — the Filanovsky oil platform in the Caspian sea. That’s after attacking the Caspian Pipeline Consortium, responsible for 1% of the world’s oil flow, twice in four days. More easy targets.
We’ve been watching the West build this sanction package all year through our interest in tanker investments. Although it’s been a slow process, sanctions are finally having an effect.
One example: the youngest tanker in the dark fleet is the 2019-built Dijilah. Even though a modern tanker like this should be earning a fortune right now with spot VLCC rates currently at $120k per day, it has been sitting empty and idle near Sri Lanka for the last five months.
Also, on Dec 3, the European government announced it had reached a deal to forever and permanently end the purchase of Russian gas and oil.
They’re attempting to “shut in” Russia’s oil. Blowing up export infrastructure — in conjunction with sanctions and no more European gas purchases — is proving an efficient way to do that. Expect more of this.
Not only has Ukraine stepped up its war on Russian oil exports, but U.S. forces have seized a VLCC near Venezuela carrying a million barrels of Venezuelan crude… and they’re threatening to seize more of them.
Bloomberg:
The seizure of an enormous oil supertanker off the coast of Venezuela on Wednesday is just the beginning of a new phase in the Trump administration’s ramped-up pressure campaign against Nicolas Maduro, according to people familiar with the operation.
Meanwhile, the market perceives there to be a glut in the oil market. The WSJ:
A Billion-Barrel Oil Glut Is Forming At Sea
Geopolitics and sanctions are causing crude to accumulate on the ocean.
Last week, WTI fell about 5% to $57, its lowest price in nine months, and adjusted for inflation, its lowest price since Covid. On Monday it fell more.
This chart shows the WTI oil price (adjusted for official inflation) on a log scale going back 50 years. Oil has rarely been cheaper — relative to the cost of living — than it is today.
It’s extraordinary! They’re blowing up oil platforms and seizing tankers and the oil price falls? The sentiment in the oil market is THAT abysmal.
This chart shows oil, priced in silver ounces, falling to its lowest price since Jan 1980.
They’re now at parity… something that’s only happened a few other times in history and only ever briefly. (Oil has now gone below parity. On Monday morning you could buy a barrel for 0.91 of an ounce of silver.)
That’s a 91.2% decline from 2005, when a barrel of oil reached 10.41 ounces of silver.
Source: The Chart Store (thechartstore.com)
QUESTION: “So what, Tom? Measuring oil in silver is like measuring lumber in silver. It doesn’t mean anything.”
MY RESPONSE: Using a 50-year chart you see the big picture… and levels where mean-reversion is likely.
I’m not saying the oil price can’t go lower. It can. Traders would say the oil price is “acting badly”, that is, not responding to good news and overreacting to bad news. That’s usually bearish price action. But we’re not buying oil and gas for a trade…
We’re buying it for income…
This big picture is simple. We’re at the top of an epic credit inflation. Rather than take the losses and suffer the liquidation, the monetary powers that be are sacrificing the currency. We’re watching a slow motion run on the paper money system.
We set the dial to Maximum Safety. Bonner Private Research subscribers have big positions in precious metals, to protect us against debasement of the money.
Gold, silver, and platinum…they’re all soaring in price as the world’s savers take out insurance against risks that cause bankrupt governments to debase the paper money system. Even though we’ve made great returns, we’re not selling an ounce.
Platinum was the slowest to respond. But has now doubled in price since we first officially recommended it in these pages as a “catch up” trade to gold on Feb 7, 2024 at $890 an ounce.
We’re also holding a large cash position, to protect us against crashing markets. Even though holding cash feels like we are losing money, we accept that cost for the insurance and optionality cash offers.
And finally, we’re holding a pile of energy infrastructure assets — hard assets that pay income — to generate some return. But what about the opportunity in energy right now as 2025 closes?
The apathy towards oil and gas couldn’t have come at a better time.
We took a big position in tanker stocks earlier this year. That bet paid off so we sold two thirds of our position last month, six shipping stocks including Frontline Tankers [FRO], the best-performing tanker stock.
Last week we were able to replace those shipping stocks with seven new oil and gas stocks. What the shipping stocks were to 2025, we believe the oil and gas stocks will be to 2026.
We are now tracking 14 stocks on our Official List and ten of them I have marked as”BUY.”
I think energy is the ‘new’ platinum. Slow to respond to the trend underway, but it will catch up to gold and silver sooner or later, too. Especially if the precious metals keep rising.
In the meantime, we’ll collect dividends. Some of the stocks we’ve recommended to BPR readers pay more than 10%.
Combined, we have a highly defensive portfolio that maintains the purchasing power of our savings as well as anything can in the year ahead.
Regards,
Tom Dyson
P.S. The “Official List” is the subscriber-only snapshot I publish each week updating our gains on each active recommendation, plus any new comments or changes to the position. There are 14 positions on the list right now. Ten of them are “buys” and four are “holds.” I have marked the new energy stocks as “BUY,” since I wrote them up for paid readers two weeks ago.
Our silver recommendation is also a “buy”, although we advise you to “accumulate” on weakness if possible given how strongly silver has performed recently (the silver position is up 73% since being added to the list in late July).
Cheap oil along with expensive silver is the perfect macro set up for miners.
We have direct exposure to silver mining stocks and leverage to the silver price itself and whatever lies ahead for silver in 2026.
To become a subscriber and immediately receive all of my investment research, click here.