The Situation In Natural Gas Markets Opportunity Or Risk: Fill & Download for Free

This question is predicated on an inaccurate assumption.Warren Buffett IS buying. His first major purchase since the market collapse in March of 2020 is Dominion Energy.He spent $4B to buy the natural gas transmission and storage assets of Dominion Energy. Including the assumption of debt, the deal sums up to ~$10B.With this purchase, Berkshire Hathaway Energy will carry 18% of all interstate natural gas transmission in the United States, up from 8%.But you might be wondering, why natural gas?The natural gas sector has been in a brutal 12-year bear market and NatGas futures are down by a severe 90%.Look at the poetry in motion in the NatGas futures chart below!Even though the Nat Gas sector is priced as if it’s left for dead, it’s a sector that’s vital for the functioning of society.And yes, I’m aware that “society” isn’t “functioning” particularly well right now.But the demand for NatGas is robust, having grown by some 30% over the last 10 years driven by conversions of coal-fired power plants to natural gas, along with dramatic increases in LNG exports.In most cases, it’s impractical to substitute natural gas with other energy forms like nuclear, solar, and coal.Now, why did Warren Buffett pull the trigger for Nat Gas now instead of some other time?Well, there has been a limitless rise in production from Pennsylvania’s Marcellus shale field and nat gas produced as a by-product of Permian Basin shale oil wells.As long as that production kept happening, the production of natural gas as a by-product was not going to stop. In other words, the production from these two fields have kept ahead of demand for ~10 years.But things are changing. There are strong signs that growth has already matured in the Marcellus and Permian fields and production will fail live up to previous expectations.This means that the market will quickly move into a supply deficit over the next couple of years, if not months. Therefore, the time to buy NatGas stocks before the market figures this situation out is now.Just look at the demand for Nat Gas in the U.S….Look, the U.S. has ramped up its use of Nat Gas for electricity production over the last 10 years by ~75%. If that’s insignificant, I don’t know what is.And! Nat Gas now accounts for almost 40% of electricity generation in the U.S….While Nat Gas isn’t just used for electricity generation, the big growth in Nat Gas consumption over the last 20 years has been in electricity generation!There’s more to my research, but this is why Warren Buffett is investing in Nat Gas. It’s dirt cheap, and the supply-demand fundamentals for the future looks extremely promising.As for timing… I’ll tell you the truth. I don’t know, but the probability is extremely high that this sector will blow up and you will multiply your capital and look like a genius in the coming years. I mean, if anything, are you really going to bet against Warren Buffett?That being said, while Nat Gas is a great investment, there are many other asymmetric investment opportunities (limited downside, unlimited potential upside) with better risk/reward fundamentals at this time.If you’re interested in learning more about asymmetric investment ideas targeting 5–10x+ returns (uranium, shipping, rare earth, and etc.), I highly recommend checking out Chris MacIntosh’s weekly newsletter.Chris actually already positioned himself in Nat Gas before Buffett invested in Dominion Energy. In fact, Chris retired in his late-20s, having had success in…The last commodities bull market (~10x return).New Zealand real estate for a 64x return over 5 years, cashing out in mid 2006 just before Lehman Brothers got destroyed.The venture capital space where he built and then sold a VC firm which deployed around $30m of capital (too early to accurately predict his returns) selling out in 2015 when valuations had gone crazy).Bitcoin (bought in 2014 at ~$600, haven’t sold; we wouldn’t be surprised if it goes to $60k—trust me, we’ve done the math).Positioning yourself before the inflection point of any market cycle and riding it for all its worth can be the difference between life in a cubicle and achieving financial freedom.PS - If you found this helpful, SMASH upvote so it can help more people!

Regardless of whether there’s a pandemic, I’m always buying stocks whenever I see opportunities with 5–10x+ returns.I’ll share 3 of my investments below (please do your own research, as they are all very volatile, so if you can’t stomach volatility, these investments are not for you!).1. ImmunoPrecise Antibodies, Ltd.ImmunoPrecise Antibodies is a clinical research organization (CRO) that offers as full suite of services as Immunoprecise Antibodies does.Take a look at its Q1 of 2020 financial results…$6M of cash on hand.Revenue of $3.8MGross profit of $2.4M (64%)Adjusted EBITDA of $932KNet loss of $549KFinancials aside, look at what makes ImmunoPrecise Antibodies attractive…A phenomenal leadership team.Balance sheet loaded with cash ($6M on hand).Cost efficiencies that have improved margins.Some competitors may offer partial expertise in the antibody discovery space but they don’t offer the full complement of services in antibody optimization, and engineering and manufacturing. But ImmunoPrecise does!ImmunoPrecise is the ONLY company (out of 3 that have come forward) with 3 antibody solutions for COVID-19, as of 2020.75 antibodies with potent neutralizing ability ready to go.2 quarters in a row of 50% YOY revenue growth.U.S. institutional investors are piling to get in.In conversation with U.S. and Canadian governments.Once ImmunoPrecise Antibodies reaches the minimum $4/share required to be listed on NASDAQ, it will be listed there, which will bring a whole ton of liquidity.I am also a part of an investor forum with one of the directors of ImmunoPrecise (Paul Andreola), and I know it is his largest position in his portfolio (~50% or 60%, if I remember correctly).Along with the macro tailwind of the search for a COVID-19 therapy and funding being injected into CROs, there is a lot more room for ImmunoPrecise to run.2. Antero ResourcesAntero is the second largest NGL (propane) producer in the United States with 50% free cash flow yield.That’s a significant statement!The oil crash in 2020 has caused a massive imbalance in U.S. gas supplies in 2021, and it’s likely that U.S. gas prices will average ~$2 in 2020, but ~$4 in 2021.Speaking macro, natural gas accounts for almost 40% of electricity generation in the U.S….While nat gas isn’t just used for electricity generation, the big growth in nat gas consumption over the last 20 years has been in electricity generation!In fact, the demand for natural gas has also grown by ~30% over the last 10 years, driven by conversions of coal-fired power plants to natural gas, along with dramatic increases in LNG exports.While there are a lot of other natural gas names, I’d say you get the best bang for your buck with Antero.Take a look below at other natural gas companies’ 2021 production/share when compared with Antero…Goehring & Rozencwajg researched about the oil/gas ratio going from $25 to 6–8x. They believe that we will see WTI (West Texas Intermediate—crude index) at $75 which means gas could be $9~$12.If they are even half right about their research, Antero Resources will be worth much more than $20.Also, don’t ignore the fact that Berkshire Hathaway made a bet on the macro tailwind of natural gas and allocated $10B into the sector!I love the asymmetric risk/reward here.3. Commodities and Hard AssetsThe commodities market is cyclical and typically uncorrelated to the broad market indices.If anyone were to invest in commodity stocks near any of the bottoms in the past few decades, they would have multiplied their capital in a matter of 5–10 years.And we are in the same place today—a historical cyclical bottom.With central banks constantly expanding money supply and debasing their own currencies, this is the catalyst for an inflationary environment, which is a huge macro tailwind for commodities to do well.Again, commodities is a CYCLICAL asset class, and I’ve been buying a ton of energy and commodity stocks because…They’re trading at historical lows when compared with broad market indices.They’re needed for society.They’re critical to political security.Truth is, no country can obtain political security without energy security, and that’s a part of the bull thesis for energy and commodities.I’ve dumped my deflationary assets (tech) and bought inflationary hedge assets (energy, materials, commodities), and plan on holding them for the coming decade, as that’s where mass capital will flow in to over the coming years.Positioning yourself near the bottom of the commodity cycle and riding it for all its worth can be the difference between life in a cubicle and achieving financial freedom.Don’t know where to start?If you’re interested in learning about more unique investment ideas that target 5–10x+ returns over the coming years, I highly recommend checking out Chris MacIntosh’s weekly research.Chris retired in his late-20s, having turned pennies into pounds in asymmetric bets like…The New Zealand real estate (64x return)The last commodities bull market (10x)Bitcoin (20x)Shipping (27x)He now runs a deep value hedge fund and is sharing what he’s doing in his fund with retail investors who are not accredited investors and cannot access his fund.PS - If this was informative, SMASH upvote and share so it can inform more people :)

Ukraine is not either an EU or NATO member, so the formal answer is no.Ukraine gained its "independence" when the former USSR was dissolving and in effect released to go on its own as an independent country. Furthermore, the historical link between the Crimea, and the Ukraine area within Greater Russia has existed for centuries prior to this. In fact, the area of the Balkans where Ukraine exists has long been considered the birthplace of the Russian peoples.With the rise of President Putin and the nationalistic furor in Russia as he brought the country back to relevance on the world stage from the ashes of the former Soviet Union, the vast majority of Putin's support comes from the Russian people themselves, who support the notion that it was a gross failure in leadership of prior Soviet leaders that lead to the dissolution of the USSR and the loss of its sphere of influence vis a vis the satellite countries which immediately surrounded it, and in many cases, as in the Ukraine, shared a long mutual history with large Russian speaking populations. Putin merely tapped into the nationalistic popular belief that at least some of the adjacent former Soviet satellites should be brought back into the fold under a Russian federation.In the case of the Ukraine, whilst they originally were part of this loose economic and political federation under the former elected President, after the Kiev uprising and deposing the government which had been pro-Russia, the newly formed government made it quite clear they wished to withdraw from their alignment with Russia in favor of a bid to join the EU, which would ultimately lead to it becoming another border nation within NATO. Russia has felt since it ceased being the USSR that Europe should have embraced the new democratic movement and welcomed Russia not only into Western Europe and the EU, but made it a member of NATO. In hindsight, it seems both the United States and the EU made a gross political blunder in not seizing that opportunity to be an inclusive partner with Russia, instead of maintain the same Cold War mentality. It was if the victors decided Russia was no longer a threat and therefore no longer relevant and not worthy to be included into greater Europe. That was myopic and insulting to the proud Russians who thought, and expected, to be embraced and welcomed by the EU and their former Cold War enemy, the United States. As far as I am concerned, this was a diplomatic failure at the highest levels of governments and has lead to the situation we are now in today. it laid the ground for a person like Putin to emerge.With the vast resources of Russia, particularly crude oil and natural gas, and its proximity to Europe, Russia managed to position itself with its energy exports to make the EU a captive market, most critically in natural gas. Those exports, while the price of crude and natural gas were high, gave Russia the economic might to rebuild its economy and its military. Major nations around the world flocked to Russia to establish business relations and offices, It became a hub for international investment which also drive its economic recovery, and a rising lifestyle for Russians lead to more popularity with the Russia electorate.Throughout this period, there was a quid pro quo between Russia and the Ukraine: Russia provided low cost gas deals to the Ukraine and the Ukraine sold its wheat and products from its heavily industrialized Eastern zone, from factories originally built by the Russians and maintained close ties with the Russian Federation. But as the Ukraine became more and more enamoured with leaving that relationship and joining a trade alliance with the EU that would eventually lead to EU membership, and then NATO membership, the good relationship that had existed became frayed. Russia set up new contracts for natural gas that were at market value, without the price concessions Ukrainians had once enjoyed. This hurt the Ukraine economy as they had to pay more for their energy sources. The Ukraine then began tapping into the flow of natural gas running through the Ukraine from Russia to the EU, in effect stealing it. Russia became incensed and there was a series of disruptions with Russia turning down, and even turning off, the flow of natural gas to the EU by turning it off to the Ukraine. Negotiations ensured. The Ukrainians had to take loans out payable to Russia to pay for the NG they owed for and the new NG supply they wanted restored. By the end game of all this jockeying, the Ukraine owed Russia over USD$6 billion which they couldn't pay. And as any wise negotiator in business would do, Russia's Gazprom began to float "conditions", which were not so much business arrangements, as political objectives with ramifications for the Ukraine if they preceded with further distancing from Russia and a continuation of a march towards Western Europe, and eventually, NATO membership.Because of the history between Russia and the Ukraine, and because Russia's national interests were being threatened by this move on the part of the Ukraine, Putin made a decision which I am sure he balanced against the possible and probably repercussions it would have. But under no circumstances could or would Russia allow the Ukraine to become another adjoining nation to surround it under the NATO umbrella. Russia felt, and maybe rightfully so, that NATO was slowly drawing a noose around its neck and squeezing it even more with the possible admission of Ukraine into the EU and NATO membership looming ahead thereafter. If this had been the United States, and for instance Canada decided it was going to sever its long term relationship with the United States and leave NAFTA and the "Seven Sisters" and cease being a US ally and become aligned with Russia, how do you think the US would deal with it? Maybe the US would decide to liberate Canada, just as Russia liberated the Crimea.There are multiple levels at which this plays out, politically and militarily. For another consideration, one must realize that the Russian Navy's Black Sea fleet has a base on the Crimea peninsula--one that holds strategic importance to it, especially since Turkey is a NATO member and the only exit and entry into the Black Sea runs through Turkish waters. And then there is the critical NG distribution infrastructure that exists in the Ukraine, which Gazprom relies upon to get its NG delivered to its largest most important customer, the member nations of the EU. In the calculus of Putin's decision were all these interrelated and underlying considerations, each with significant ramifications to the Russian's economy, its political relevance and its national boundaries and the attending military implications of Ukraine as a NATO member.Frankly, I am not ever in favor of a larger, stronger nation using its economic or military might to usurp the rights of a smaller neighbor. But if you drew a Ben Franklin T and listed the pros on one side and the cons on the other, from a logical basis, Putin did what was most in Russia's best national interests. I might add, knowing neither NATO or the United States would risk WWIII over its annexation, especially given the historic relationship that existed between Greater Russia and the Balkans for many centuries. We may not like what Russia did. We can ostracize her and continue to erect economic trade barriers to punish her economy too. But in the end this was never going to result in a military reaction by NATO or the US, and Putin knew that whilst he would pay a price, it was a price, in his nation's mind, and his, that was worth it. And that is why he has such a high approval rating regardless of the economic difficulties Russians have faced since the trade sanctions went into effect.Eventually, Russia will emerge from this malaise. In the meantime, I have little doubt that both the US Department of Defense and the military-industrial complex, comprised of major defense contractors who stand to benefit from the military's painting of Russia as a renewed national threat, are gleeful and pleased. This means more weapon system contracts, more of the US budget reallocated to defense, and a return to the Cold War mentality--all a plus for the defense contractors bottomline. All I can say is that again is reflective of the lack of political leadership both at home and abroad with our European and British allies, as well as a failure of diplomatic engagement. Only when we appreciate that Russia remains a military super power--and how could it not be considered such with 15,000 nuclear weapons and a Navy and Airforce in a rebuilding stage--will we realize that it deserves a seat at the table and the respect that goes with it. Embracing Russia and treating it as an equal, and even finding common ground to include in within the international community as a major partner in security, political and economic matters, since it is a permanent member of the UN Security Council for a reason, would be a good start in healing the rift that the United States and Europe helped create.