Commodity Super Cycle - What Happened to Tap Backs?

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Inflationary pressures on commodity production side of things. Companies wanted to capitalize on those high commodity prices and rake in profitability associated with it. There was a tremendous amount of what in retrospect ended up being over-investment. The investment community, generally speaking, went to these companies and said, "You have no idea what you're doing"

Rebecca Hotsko chats with Lucas White, the portfolio manager at GMO for The Resources and Climate Change Strategies and a partner of the firm. They talk about his outlook for the energy sector, why he thinks energy is still very cheap and undervalued, his views on clean tech companies, and more.

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro

04:19 - His outlook for the energy sector and the main drivers of performance for the sector long term.

02:25 - Why Lucas thinks energy is still very cheap and undervalued at today’s prices, even after the price run up in 2022.

23:58 - Which segments of the market he thinks are most attractive in this space and offer the greatest opportunities long term?

29:56 - His views on clean tech companies and the opportunities he sees in this space.

29:56 - His thoughts on coal companies transitioning to clean energy and why this may actually reduce shareholder value.

39:31 - How today’s energy crisis is different from previous ones, such as the 1970s oil shock.

41:50 - How the move towards net zero climate targets will change the demand for resources.

41:50 - Which resources will benefit the most from this transition?

41:50 - Why he believes copper is the most important resource required to meet the need and demand for the energy transition.

46:37 - Why Lucas prefers investing in the equities that are producing commodities rather than the commodities themselves.

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Check out: GMO Climate Change and GMO Resources.
Related Episode: Listen to MI235: Investing in Uncertain Times w/ Louis Gave, or watch the video.

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