Insider-Weekly-Issue 20230820

— Issue #278: Aug 2023 —
Welcome back, friends!
This one is from Hervey Bay in Queensland, Australia. Thanks, Leanne!
And this one comes from Anthony, who’s sunning himself on the Greek islands.
© 2023 Capex Administrative Ltd. | Unauthorised sharing may result in limb loss 1
IN THIS WEEK’S ISSUE
● No let up
● The beat goes on
● Rome revisited
● Sunak drilling embrace merely political posturing
● Decline for a rally
● The fragility of the global oil trade
● The security risk of uranium production and refinement
● Structural issues for US oil reserves
● Productivity problems in shale
● Not a great day for Marxism
● Nasdaq rally on thin ice
● Nigeria?
● True intentions of coal investors
● Air conditioning and emerging markets
● Another showstopper from Simon Michaux
● The Big Five:
1. Tsakos
2. SeaBird Exploration
3. Shelf Drilling
4. Profire Energy
5. UBS (5-year call options)
NO LET UP
It would be nice to put COVID behind us, pretend we don’t have the aftermath of
“unexpected deaths” and “turbo cancers” now accounting for increasing excess mortality
rates. But once you realise that COVID was never a medical pandemic, but rather a heist,
then you realise that this is a false wish. I bring this up because there are a few things that
“COVID” was designed to achieve.
First is the implementation of vaccine passports. We have discussed this before, so no need
to rehash. They want it global, hence subverting all nation states to sign over sovereignty to
the WHO, which brings in the second thing to be accomplished — ceding of sovereignty to a
corporatocracy.
A friend sent me this infographic, which, while not completely comprehensive, provides a
decent infographic of how the existing system actually works and gets implemented from
the top down to the peasants.
What is important to understand and clearly evident if you’ve been paying attention over
the last few years is that government officials are not the ones calling the shots. They’re
lower down the totem pole than most think. This isn’t the structure in all of the world, but it
is the structure in the Western “democratic” world.
Speaking of which…
UK developing vaccines for next pandemic
The development of a vaccine for… wait for it… a yet-to-be-determined virus. You can’t
make this isht up. And you can bet they'll never try to force everyone to take it. Unless you
want to travel, buy food, work, leave your home… you know, that sort of thing.
THE BEAT GOES ON

The UK government has published official figures on deaths following COVID vaccination
revealing:
● 1 in every 482 vaccinated people in England died within one month of vaccination,
● 1 in every 246 died within 60 days of vaccination, and
● 1 in every 73 were dead by May 2022.
You can see the nasty numbers for yourself at this link.
It’s amazing how thoroughly lobotomised people have become. Unless the news tells them
there is something to worry about, they can ignore what is in front of them and not even
question why.
And yet nothing happens. Nobody cares. Literally.
Which brings me to the similarities between the collapse of Rome and what I believe is
today the collapse of the Western-led financial, economic, political, and social system,
albeit with much greater speed.
ROME REVISITED
I came across an excellent thread from @oldbooksguy on Twitter. It is entirely relevant to
where we are today and as such, I’ve devoted an entire section to it. Read on…
Ancient Rome was the world's most powerful empire for 500 years.
At its height, Rome boasted of roads, public baths, and much else that was close to
miraculous for the rest of the planet. Then came the Great Fall, and what happened has
lessons for the world TODAY.
In his book The City In History (1961), Lewis Mumford explains how Rome went from
"Megalopolis to Necropolis."
This great city set up its own demise in two ways: Panem et circenses (or "bread and
circuses"). Mumford says, "Success underwrote a sickening parasitic failure."
As ancient Rome became prosperous, it became an unsustainable welfare state. Mumford

writes that "indiscriminate public largesse" became common. A large portion of the
population "took on the parasitic role for a whole lifetime.” More than 200,000 citizens of
Rome regularly received handouts of bread from "public storehouses."
Lewis Mumford also wrote the desire to lead an industrious productive life had severely
"weakened."
So what did people spend their time on? Distractions, which meant circuses.
The Roman people, not working for their livelihood but living off of the prosperity of their
city, became numb.
Mumford writes, "To recover the bare sensation of being alive, the Roman populace, high and
low, governors, and governed, flocked to the great arenas" for games and distractions.
The entertainment in Rome included "chariot races, spectacular naval battles set in an artificial
lake, theatrical pantomimes in which lewder sexual acts were performed.” Today it is social
media and porn.
Out of 365 days, more than 200 were public holidays and 93 were "devoted to games at the
public expense."
Consuming entertainment became the primary priority of Roman citizens in Rome's

decadent phase. As Lewis Mumford writes,"Not to be present at the show was to be deprived
of life, liberty, and happiness."
Concrete concerns of life became "subordinate, accessory, almost meaningless."
Ancient Rome could put half of its total population "in its circuses and theatres" at the same
time. A new public holiday was declared to celebrate every military victory. But the number
of holidays kept rising even when Rome's military prowess began to fail...
Mumford writes that no empire had such an "abundance of idle time to fill with idiotic
occupations."
Even the Roman emperors who privately despised the games had to pretend they enjoyed
them for "fear of hostile public response."
Bottom line: The very power and prosperity of ancient Rome set the stage for its collapse.
As welfare states expand around the world today and entertainment options get ever more
immersive, we are forced to ask a question: Is this Post-Industrial Civilization Rome, Part
II?
Edward Gibbon, the author of The History of the Decline and Fall of the Roman Empire, says:
"The decline of Rome was the natural and inevitable effect of immoderate greatness. Prosperity
ripened the principle of decay; the causes of destruction multiplied with conquest; and, as soon as
time or accident had removed the artificial supports, the fabric yielded."
All advanced civilizations become "complex systems," and then rot sets in. This idea is
explored in a 1975 book: Systemantics.
Why systems fail so often - and how to make them work
SUNAK DRILLING EMBRACE IS MERELY

POLITICAL POSTURING
In a “surprise” turn, Sunak has given the green light to drilling in the North Sea. But will this
result in any material increase in oil production, and if so, when? Furthermore, if oil is
found, will this result in the UK actually having greater energy security?
From the article:
“Will the move unleash a torrent of new production?
Decades can pass from the award of a licence to first production of oil and gas, and in
many cases it never even happens. For example, the licence for the controversial Rosebank
field that could potentially get the go-ahead for development this year was awarded in
2001.
North Sea oil and gas resources are mostly tapped out and production has steadily
declined since its peak more than 20 years ago. The iconic Brent facility, which once
produced as much as half a million barrels a day, has been mostly dismantled. The only oil
field to come online last year, called Evelyn, pumps no more than 6,000 barrels a day.
Even if a new licence yields a discovery, many questions will have to be answered before it
can be declared economically viable: How many barrels are in place? Is the field close to
existing infrastructure? Does it lie in shallow or deep water?
As Wood Mackenzie analyst Greg Roddick points out, “no commercial discoveries have
been made on new acreage awarded through licensing rounds since 2014.”
Is this good for UK energy security?
The UK imports about 40% of the oil and gas it consumes, yet about three quarters of the
crude pumped within the country was exported last year. That’s because so much of the
nation’s refining capacity has been shut down — about half over the past two decades —
that the country is heavily dependent on imported fuels.
Britain also has very little natural gas storage, so it often exports the fuel to Europe
during the summer and imports it back again during periods of peak demand in winter.
So there is no guarantee that additional oil and gas produced in the UK would remain
there, and the country is very much exposed to swings in international price benchmarks
over which its tiny share of global production — about 1% last year — has little influence.”
So Sunak’s embrace of drilling appears to be just a move to appease worried Brits about
energy security. It won’t actually lead to any more security in reality.
But perhaps more importantly — this is evidence that the net zero hogwash is a side effect
of cheap energy and cheap money. You see, it’s only under the complacency of abundant
relatively cheap energy (thank you, Russia) that folks managed to achieve the hubristic
view that “net zero emissions” is in fact both good and necessary. It is neither.
Anyway, the Sunak’s move illustrates that everyone is a greenie until it hurts their pocket,
and now these muppets are facing increased pressure from reality and a restless peasantry.
When the fit hits the shan and public sentiment changes so too will we see increasingly
politicians seek to take advantage of the shift in public opinion. After all, being the parasitic
leeches most of them are, this would be only natural.
DECLINE FOR A RALLY

Energy companies just reported the steepest decline in operating rigs in three years. The
lack of urgency among these businesses to boost production is paving the way for another
strong rally in oil and gas prices, ultimately creating further upward pressure on inflation.
Seems like oilers are more interested in paying dividends or buying back stock than
investing in future growth. We’re fine with that. If we have to sit and compound returns via
dividend payment while share float contracts, we’re as happy as a dog with two tails.
It is bizarre to think that the US oil and gas rig count is about half the level of 2018 and yet
the oil price is about 20% higher.
Don’t be thinking that the US is any different than the world in general.
Sooner or later this lack of investment is going to catch up with oilers, the oil price will
boom, and so too will investment. We just gotta be patient and invested well before the
boom times… which is what we are doing.
THE FRAGILITY OF THE GLOBAL OIL TRADE
We don’t want to see an escalation in the Ukraine war (or any war for that matter). That
being said, it probably wouldn’t do our portfolio any harm if the guns started blazing in the
Black Sea.
From the article:
“Russia exports around 500,000-550,000 barrels a day of crude and 450,000 barrels of
refined products, mostly fuel and diesel, from Novorossiysk. The port also loads about
250,000 barrels a day of crude from Kazakhstan that gets delivered to the port via
pipelines and from there is shipped to Romania for refining, Kpler data show.
Nearby the port, the Caspian Pipeline Consortium, or CPC, alone loads tankers with about
1.3 million barrels of crude per day and is the main route for exporting oil from
Kazakhstan to Europe.
“Some 2.5 million barrels a day of crude and product flows are endangered by the flareup,”
Katona said, adding that a potential halt of the CPC would do much more damage to
Western interests.
Russia is also the world’s top wheat exporter, and the bulk of its grain is delivered from
Novorossiysk and the Kavkaz anchorage in the Kerch Strait. The country is in the midst of
a second bumper harvest, making this a crucial time for getting grain to global markets.”
Speaking of energy security and the fragility of the global energy markets…
This is what happened:
“Prices on the Title Transfer Facility, the European benchmark, rose to more than €43 per
megawatt hour, up from almost €30 on Tuesday, reaching its highest point since mid-June.
The increase was triggered by reports that workers at important LNG plants in Australia
were planning strike action in a fight for higher pay and better job security, with market
movements exacerbated by some traders closing out bets that gas prices would fall.
The move highlights that despite gas storage levels rising close to capacity in the EU, the
energy crisis that has roiled the continent for almost two years is not yet over, and markets
are still nervous about the vulnerability of supplies.
While Australian LNG supplies rarely flow directly to Europe, the EU has become
increasingly reliant on global seaborne cargoes of LNG to replace Russian supplies cut
since the war in Ukraine.”
As a matter of interest, the world’s global LNG trade is in the hands of a relative few
exporters. Below are the countries with largest liquefied natural gas (LNG) export capacity
in operation worldwide as of July 2022 (in million metric tons per year):
The point of all this is that all these “disturbances” are waking many governments up to the
fact that they are coming up very short on the energy security front.
Getting back to this European natural gas thing…
The rise we saw last week was a mere blip, prices are still lower than they were at the start
of the year. However, it wouldn’t take much for prices to rise materially again as the only
thing that has happened is Europe just got lucky with the weather over the last 12 months.
THE SECURITY RISK OF URANIUM
PRODUCTION AND REFINEMENT
A coup in Niger? Who really cares about an insignificant Central African country, anyway?
Well, take a closer look:
Here is the deal:
“If Niger falls into the Russian orbit, the world would depend even more on Moscow – and
its clients — for atomic energy. Kazakhstan and Uzbekistan, two former Soviet republics,
are among the world’s top uranium producers, accounting for about 50% of the world’s
mined supply. Add Russia and Niger to that, and the share jumps to just above 60%.
Uranium is only the beginning of what’s called the nuclear fuel cycle. While Russia is also
the world’s sixth-largest uranium miner, its real power lies elsewhere in that cycle: the
transformation of the commodity into usable atomic fuel rods for civil reactors via
so-called conversion and enrichment.
Russia accounts for nearly 45% of the global market for uranium conversion and
enrichment, according to data from the World Nuclear Association. It’s a stranglehold that
has created what US officials recently called a “strategic vulnerability” that’s
“unsustainable.” About a third of all the enriched uranium consumed last year by US
utilities came from Russia, at a cost of nearly $1 billion paid to a company directly
controlled by the Kremlin. More than a year since the Russian invasion of Ukraine,
Washington hasn’t banned imports of Russian nuclear fuel.”
It was rather amusing to witness Macron attempting to placate African leaders (under
effective French control via their central bank policies and age old agreements), only to be
berated by African leaders. Kenya's William Ruto bluntly told Macron: "You are not hearing
us!"
This is much more than simply some insignificant little impoverished African nation giving
the middle finger to their monetary masters. This is about the end of Western colonialism.
Here’s the problem…
Ukraine is not going to plan at all. Now, Niger split… and instead of ECOWAS coming to
re-implement Western puppets, they were warned by Russia and China not to intervene…
and they haven't. You know why they haven’t heeded the call of their Western colonial
masters? Because they’ve been watching exactly how well that’s playing out for the
average Ukrainian. With an estimated 350,000 dead and it being plainly evident for all to
see that Russia is winning substantively, the appetite to be another Ukraine but on African
soil looks about as appealing as gnawing your own hand off.
What this means is really something we’ve discussed and promised many times here over
the years. That the global South will be fought over… and ultimately it will likely fall mostly
into the warm embrace of the BRICS. This coming turmoil is bound to create supply
disruptions and some wonderful investment opportunities for a world that is changing
rapidly in front of us and will almost certainly within a decade look nothing like that which
we’ve become accustomed to.
STRUCTURAL ISSUES FOR US OIL
RESERVES
We remind folks of the precarious situation the US finds itself in. We don’t believe any of
this precariousness is priced into oil prices. By now, you are probably aware that the US
Strategic Reserve is at the lowest level in 40 years. If you didn’t know… surprise! It is.
However, what few realise is that it will take considerable time to refill. Furthermore, the
oil that it gets filled with can only come from the Gulf of Mexico as shale oil is the wrong
grade for US refineries to use.
There is also an issue of the structural integrity of the reserve:
We wonder if the sleepy Joe administration has given much thought to how tight the oil
market is? Probably not. After all, they’ve pronouns to establish and trannies to hire so…
For those of you who have ever had a large position in an illiquid stock will know, when
demand for the stock is high, it isn’t hard to offload a holding. But to then turn around and
buy back your original holding… well, it's like chasing your tail. The more you buy the higher
it goes in an exponential fashion.
PRODUCTIVITY PROBLEMS IN SHALE
Yet more confirmation of what we have been saying for the last few years! Research firm
Enverus reports the steep drop in output from US shale wells is turning out to be worse
than expected, forcing oil drillers to work even harder to keep production from slipping,
The firm’s conclusion is that there won’t be a surge of American oil production after the
amount of crude extracted from US shale wells doubled in the past decade. The falling
output rate over time highlights a fact of life for US shale operators: oil wells are most
prolific in early months of production, with gushers quickly turning to trickles. That reality
is why oil output boomed during the shale revolution of the 2010s, as companies chased
production growth.
However, most of the land is already owned or leased, offering few opportunities to drill
new areas with vast oil reserves. Companies are considering a range of drilling and
production strategies to maximise what they get out of each well such as drilling wells
closer together, which makes the shale patch a more dense and difficult place to increase
the rate of production. We highlighted the idea of reduced well pressure becoming
problematic as a result of how close wells are being drilled to each other.
Further to the Enverus report, take a look at the latest EIA report.
First of all, note where the oil and gas come from: Permian for oil and Appalachia,
Haynesville, and Permian for natural gas.
Now, take a look at what has been happening at the new-well oil production per rig. It’s
wonderful. It’s like Biden's approval ratings — all decreasing. Summed up, the industry’s
treadmill is speeding up and this will make production growth more difficult than it was in
the past.
We believe that the endless supply of cheap shale oil is greatly over-exaggerated, and
over the coming years energy security will become more pressing. We believe this is
another feather in the cap for offshore oil exploration over the long term.
NOT A GREAT DAY FOR MARXISM

This was the remark from Lucas when we at HQ were viewing the following.
And this beauty…
Then this…
While on the topic of imbeciles, morons, and clowns, there’s also this:
"The mine is so important for Warsaw that it has in effect been paying the EU to keep it
open. Poland defied the court’s 2021 interim order for it to stop mining and refused to pay
the resulting daily fine of €500,000. In response, the European Commission began
deducting the fine from EU funds earmarked for Poland — withholding €68mn in total —
while Poland separately paid €45mn to the Czech Republic in compensation for
environmental damage and to get Prague to drop its lawsuit.
Brussels has also excluded the region around Turów from EU subsidies for places that
transition away from fossil fuel production."
It’s almost as if they need coal.
Speaking of which, Turkiye, a country I’ve been telling you is NOT going to go along with the
woke ESG shullbit, just tossed the climate alarmists aside like a rag doll.
Jeez! Doesn’t he realise the existential threat to humanity here? Clearly an unhinged
extremist. Probably misogynistic, too. Definitely actually, after he arrested all the
pink-haired folks who were trying to parade their bits in front of children in Istanbul during
pride month.
From the article:
“President Recep Tayyip Erdogan on Monday dismissed environmental protests over the
felling of trees to expand a coal mine in southwest Turkey, saying the campaign was led by
"marginals".”
Marginals? So he’s not going to let a few radicals dictate to the majority? Must be
undemocratic.
"This power plant, which produces almost two-thirds of the electricity consumed in the
southern Aegean, contributes around one billion dollars annually to our country's
economy," Erdogan said in a televised address after the weekly cabinet meeting.”
He said the power plant needed to continue production with new coal basins as the
existing reserves were close to depletion.
“Coal power plants have become once again a major source of energy in European
countries after the crisis that broke out with the Russia-Ukraine war," he said.
"Although some are constantly and persistently trying to re-play the same scenarios with
different skins, nobody is deceived by this game anymore," Erdogan said.”
He can’t possibly be referring to the Soros-sponsored “NGOs” that have actively been
working throughout Eastern Europe and the Caucasus. Nah, that’s crazy talk.
Actually, on the entire climate change fraud, I found this:
Now, to be clear… before we get any hate mail telling us what a bad man little Erdy is,
realise this. They are ALL power hungry psychos. They are simply psychos with differing
agendas, and it is our job to arbitrage those agendas for our own prosperity and freedom
where possible.
NASDAQ RALLY ON THIN ICE
The rally in the Nasdaq is not broad based. It is essentially being powered higher by a
relative few stocks. This isn’t a bullish environment, rather it has all the hallmarks of a
relief rally in an ongoing bear market. Let's take a closer look…
You may have noticed the press of popular opinion talking about the Nasdaq being up some
45% since the start of the year. Yes, that indeed is the case in the Nasdaq 100. That was one
hell of a short bear market (strangely, from January 1st, 2022 to January 1st, 2023).
But is the bear market really over? We define a bull market as a “general rise in the
average listed stock.” Of course, that begs the question as to how one defines a “general
rise,” but let's not get bogged down with that for the time being. What is critical is that one
should be able to make good money by randomly choosing a basket of 30 stocks across
an exchange rather than just investing in the major market index.
Everyone thinks that a major market index, like the Nasdaq 100 or Nasdaq Composite, is
“the market.” These are just constructs based on market cap weighting and often are not
good proxies for the performance of the “average listed stock.” We are better served by
looking at the behaviour of small cap indices to give an approximation of the performance
of the average stock.
Notice how the Nasdaq small cap index has hardly budged since the start of the year — a
very different picture from the performance of the Nasdaq index itself.
And here is what has really been happening beneath the scenes — the New Highs-New
Lows Index (the cumulative index of the number of stocks making 52 week highs less 52
week lows) has been trending down since late 2021 and is lower YTD. This indicator
suggests that the bear market is alive and well and that the 45% rally in the Nasdaq YTD is
a sucker rally.
If the Nasdaq (essentially tech/growth stocks) entered a bear market because of bond
yields rising… well, they aren’t down YTD. Rather they look close to making multi-year
highs:
Bond yields too high? Well, if history is anything to go by, they are getting back the “lower
range of normal.” In other words, they are far from being too high. Of course, bond yields
are essentially a function of inflation expectations. If you think that oil is going above $100,
then inflation is far from being “transitory.”
How does the NYSE look? In short, not much better than the Nasdaq. The strength since
October last year isn’t broad based, at least not typically what you would see at the start of
a bull market.
All very interesting, but what are the implications for investing? A few points come to mind:
● We are probably still in a bear market where the next big move for the major market
indices is down… or at best we are in for a long period of the market going nowhere
but with a lot of +/-20% moves, so index tracking probably isn’t going to be a very
rewarding strategy.
● Investments need to be REALLY focused on markets/sectors/stocks that are
offering great value and where the earnings outlook is positive for the next five
years.
We continue to believe that we have entered a bear market somewhat similar to the TMT
bear market of 2000-2003. Yes, the Nasdaq did fall some 75% during this time, but if you
had invested in out-of-favour small cap value stocks (much like what we are investing in
today albeit with a energy bias), then you would have come out with a slight profit — up
18% in the face of the Nasdaq being down 75% over three years is a huge
outperformance.
Russell 2000 Value (white) and Nasdaq (red) indexed to 0
It’s not without volatility. Note the “9/11” drop and then being up 55% as of May 2002 to
being up 18% some 6 months later. From experience this was a hard slog even for value
investors.
By way of interest, here is how the Russell 2000 and Nasdaq performed in the three years
leading up to the start of 2000. Suffice to say that investing in small value was light years
from being a popular investment strategy. Rather, it was horrid.
While we aren’t world renown for timing the market, quietly we wouldn’t be surprised to
see more downside in major market indices over the next few years. However, we aren’t
worried or concerned because history tells us if we constantly invest in stuff that has been
out of favour for an extended period of time (where investors over the last seven years
have only ever lost money), it is difficult to not come out ahead on a multi-year view.
NIGERIA?
The Nigerian stock market is on our radar. We just gotta think of ways to trade it as we
can’t trade directly on the Nigerian exchange.
Oh, more contrarian signs… Let’s see if the delisting of the only Nigerian ETF is a contrary
sign. And by the way, this is political, not economic. Also, history suggests that listings and
delistings of ETFs near to the top and bottom of markets respectively.
Nigeria, you may ask? Here is the Nigerian exchange indexed to 100 as of 1996 in dollars.
Yes, it really did go up 1,000% from 2000 to 2008. This isn’t to say that it will do that again
or that it is about to, but rather when the “stars align,” off the wall markets like Nigeria can
easily go 10x.
Remember the delisting of the coal ETF (the VanEck Vectors Coal ETF) in December
2020…
The delisting wasn’t at the bottom, but very close to it!
Reuters Global Coal Index
Perhaps one day there will be an “offshore oil service” ETF listed. If we were still invested in
the sector, this would be our signal to sell the lot — lock, stock, and barrel.
THE TRUE INTENTIONS OF COAL

INVESTORS
Research carried out on Whitehaven shareholders regarding the potential acquisition of
BHPs coal assets in Queensland.
We can see that an overwhelming number of respondents agreed that “increased
shareholder returns through payment of dividends” should be a priority, while a clear
majority of larger shareholders disagreed that the company should “increase borrowing to
invest in new mines.”
We don’t think investors in Whitehaven would be any different than most other large coal
miners.
Bottom line is don’t expect to see any material increase in coal supply, even with high coal
prices for quite some time, at least not until stockholders change their risk averse thinking.
This will take a long time!
AIR CONDITIONING AND EMERGING
MARKETS
We wonder if John Kerry and his “net zero” zealot mates have given any thought to
preventing Asian, Middle Eastern, African, Central, and South American “inhabitants” from
acquiring air conditioners (i.e. living a comfortable life)?
From the article:
“But in many parts of the world, including some of the countries at highest risk for extreme
heat, most people go without it. Roughly 5% of households in India have air-conditioning.
Of the 2.8 billion people living in the hottest parts of the world, roughly one in 10 has
access to AC, according to the International Energy Agency.
That’s expected to change in the coming decades, as the world’s largest AC manufacturers
target growing markets in Asia and Africa. By 2050, over two-thirds of the world could
have an air conditioner, and half those units will likely be in three countries, according to
the IEA: China, Indonesia, and India.
Wider access to cooling is absolutely essential: it will save lives as heat waves become
more common and more extreme because of climate change. But adding more air
conditioners presents a challenge, because they’ll increase energy demand—by a lot.
Space cooling makes up nearly 40% of all expected growth in energy demand between
now and 2050.
In 2018, cooling consumed about 2,000 terawatt-hours of energy globally. In 2050, that
could grow to 6,200 TWh. The difference, 4,200 TWh, is roughly the same amount of
energy the entire US electrical grid supplied in 2022.”
And how is that all going to be powered? We have a two word answer: mostly coal.
ANOTHER SHOWSTOPPER FROM SIMON

MICHAUX
Listen carefully…
THE BIG FIVE

Five deep value ideas that you probably wouldn’t have heard of before let alone considered.
These aren’t trade ideas as such, but if you were to take each position short them in equal
weights and hold those short positions for five years, you would most likely be taken to the
cleaners, which answers the question of whether or not they would be a good investment.
Please read our important disclaimer here regarding any recommendations.
1. Tsakos
2. SeaBird Exploration
3. Shelf Drilling
4. Profire Energy
5. UBS (5-year call options)
TSAKOS
An owner of 70 mid-sized crude tanker vessels (Suezmax and Aframax) and product
tankers. With a market cap of $640m, that is an average value of merely $9m per vessel.
Check out the fundamentals with a forward P/E of 2x.
Still a huge degree of asymmetry!
We could have included a number of other tanker stocks as their valuations are also
bordering on the sublime.
SHELF DRILLING
An owner of 36 Jackup Rigs. A “rough and ready” valuation: market cap $529m divided by
36 works out to about $15m per rig. Granted these rigs aren’t all less than 10 years old, but
still, good luck on finding a working rig for anything remotely close to $15m. Remember,
Shelf bought 5 Jackups from Maersk Drilling just prior to the merger with Noble for $75m
a vessel.
Of course, if we were a little quicker off the mark and we were talking about Shelf some six
weeks ago, then we could have been buying Shelf with a valuation of $10m per rig.
Anyway, from current levels, this stock could easily triple and still it would be very cheap.
SEABIRD EXPLORATION
SeaBird Exploration is engaged in subsea surveying services, including two-dimensional
(2D), source, ocean bottom seismic, and shallow water three-dimensional (3D) studies.
Not a big company — it has just two ships, and this is one of them:
With a market cap of $37m, this works out to $18.5m per vessel. Not expensive!
PROFIRE ENERGY
Profire specialises in burner-management systems (BMS) and other
combustion-management technologies.
It’s an oilfield technology company, specialising in the design of burner-management

systems serving the upstream and midstream portions of the oil/gas industry, providing
systems that monitor and manage the burners used in the industry's combustion vessels
(e.g. tanks, dehydrators, separators, etc.).
The Profire Burner Management System maintains burner flame, manages fuel flow to the
burner to regulate vessel temperature, and safeguards the flaring of volatile hydrocarbons
for safety and emissions control. The company dominates the North American small and
mid-size oilfield burner management system market with an 80% market share.
In 2012, Profire was recognized as one of the fastest-growing companies in the world by
International Business Times and then recognized in 2013 as one of the fastest-growing
companies in North America by Deloitte. Obviously, the great oil bear starting in 2014 put
an end to that, but when that bear market is over, will they pick up where they left off.
Recent earnings suggest so:
“Our second quarter 2023 results reflect a sustained momentum across our business. We
recorded our fourth consecutive quarter of revenue in excess of $12 million and posted our
highest-ever quarterly net income and EBITDA.
The last six-month and 12-month periods represent the best-ever consecutive six and
12-month periods in company history. We are excited about the path we are on and our
ability to continue to operate at these record-setting levels.
We are a much better and stronger company today than we were when we last achieved
this level of quarterly revenues, profits, and cash flows. We have more products to offer,
our customer base is larger, our technology keeps getting better and better, and we believe
the outlook for our business is strong for the next several years.”
Another classic trading range breakout…
The company is small — with a $75m market cap and no debt.
UBS (5-YEAR CALL OPTIONS)

Here we go again… UBS is hitting up against that “resistance” line, attempting to break-out
of a 14-year-old trading range… and we all know what happens when stocks break out of a
long-term trading range (well, by now you should have a reasonable appreciation).
For non-US citizens, here is an idea: a bull call spread. I say non-US citizens because US
citizens cannot trade options in Europe (I don’t know why).
Here are Interactive Brokers’s instructions on how to do a bull call spread.
And how it looks for me — a December 2027, 28/36 spread at 1.00.
So if we can get the spread at 1.0 and UBS does close at or above 36 come December 2027,
then it will result in a 700% profit.
It would seem now is an ok time to buy long-term call options as implied volatility is at
reasonable levels.
12-month implied volatility of UBS options trading on Eurex
However, before you get stars in your eyes take a look at the chart above. Back in 2015 and
2018 we could have easily said the same thing. Now, 5-8 years later, UBS is trading at
exactly the same level as it was back then.
WEEK’S HUMOUR
First, this one…
And how true the following is:
Millionaire: Makes $20m in 2020

Millionaire: Hires “artist” to make “art” for $25k
Artist: Puts a streak on a canvas
Millionaire: Thanks artist and has art appraised by an appraiser in his same circle of
friends
Appraiser: Values artwork at $20m
Millionaire: Donates $20m artwork to museum and gets $20m tax write off
Millionaire: Pays no taxes in 2020.
Me at museum: “This is stupid, it’s just a line on a canvas”
Hipster next to me: “No, you just don’t understand it because you’re uncultured”
Sincerely,
Chris MacIntosh
Founder & Editor In Chief, Capitalist Exploits Independent Investment Research
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— Issue #278: Aug 2023 —

Welcome back, friends!

This one is from Hervey Bay in Queensland, Australia. Thanks, Leanne!

UK developing vaccines for next pandemic

THE BEAT GOES ON

And yet nothing happens. Nobody cares. Literally.

As ancient Rome became prosperous, it became an unsustainable welfare state. Mumford

Consuming entertainment became the primary priority of Roman citizens in Rome's

Concrete concerns of life became "subordinate, accessory, almost meaningless."

Why systems fail so often - and how to make them work

SUNAK DRILLING EMBRACE IS MERELY

“Will the move unleash a torrent of new production?

Is this good for UK energy security?

DECLINE FOR A RALLY

From the article:

Getting back to this European natural gas thing…

Here’s the problem…

There is also an issue of the structural integrity of the reserve:

NOT A GREAT DAY FOR MARXISM

It’s almost as if they need coal.

From the article:

Actually, on the entire climate change fraud, I found this:

Russell 2000 Value (white) and Nasdaq (red) indexed to 0

Reuters Global Coal Index

THE TRUE INTENTIONS OF COAL

From the article:

ANOTHER SHOWSTOPPER FROM SIMON

THE BIG FIVE

Check out the fundamentals with a forward P/E of 2x.

Still a huge degree of asymmetry!

It’s an oilfield technology company, specialising in the design of burner-management

Another classic trading range breakout…

The company is small — with a $75m market cap and no debt.

UBS (5-YEAR CALL OPTIONS)

Here are Interactive Brokers’s instructions on how to do a bull call spread.

And how it looks for me — a December 2027, 28/36 spread at 1.00.

Millionaire: Makes $20m in 2020

© Copyright 2023 by Capitalist Exploits

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