Well, listen, I want to keep the interview going by changing some topics I wanted to cover. But before we get to commodities, I wanted to pick both your brains on shipping. It's really been a tale of two types of shippers, container and tankers, because the AP molar Merska came out with and just missed it on their earnings. Xim has been awful and a huge bear decline while you have the tanker stocks like TK and Scorpio at multi-year highs. So Chris, we'll start with you. What's your take on what's going on? And more importantly, is the shipping area investable right now?

Yeah. I mean,

let's look, I don't want to pat myself back, but I'm going to pat myself on the back because that's kind of just where we've been sitting. And it's

like, I

just, you

know, we there's supply constraints in the industry,

in the tanker side,

containers don't have the same issues.

We still and it's weird, you know, like on the tanker side of things, because it's kind of tied to, well, not kind of, it is tied to the fossil fuel industry. We've got this dynamic whereby Wall Street are still entirely concerned about having the diversity meetings and understanding the new pronouns. And they don't really want to be financing anything that's related to the devil incarnate, which could be shipping on fossil fuels. And so there's nobody wants to finance the stuff. It's a very capable intensive type of business

or, or sector.

And then of course, you know, the,

you've

kind of got the,

the fact that, you know, moving the stuff around the world in, in an environment where supply chains are under pressure as a premium, like it's a perfect scenario. And that's,

and that's

without having the idea that

you might

want to actually store energy, right, which is, which basically is what you would want to do going into a geopolitically fractious conflict environment, right? You, you, you want to, you're going to hoard. And, and I don't, we haven't really seen that yet. So based on all of those things, I'm, I'm just, I remain a holder of them. They're not as cheap as they used to be. But, you know, it's, it's, so for us, it's, it's, it's a bit of a lesson position. We don't have the same weightings in that. We've kind of shifted weddings more into like kind of offshore and some of the more esoteric stuff in the offshore space.

But,

you know, I'm certainly not bearish and I, and I, and I want to still have chips on the table with respect to that. Containers, containerships now are like the super, super cheap. You know, you talk about them, like you just kind of take the basic metrics on it. It's like, it's, I feel

like we might be a little bit early,

but it's certainly getting a lot more interesting. But I think we still, look,

I

want to see, I want to see

bankruptcy is I want to see M and

A, like, you know, because you get M and A at the top of the cycle, the bottom, bottom of the cycle. And so I kind of want to see that bottom bottom M and A process taking out where you just got bankruptcies and, and then guys start swallowing up some of the, you know, the leverage players. So I think it's, yeah, I don't know what to do with thoughts on a copy.

Yeah, I think

you hit on the key ones. I mean, look, they built a ton of containerships and there's a glut. The only way you fix the glut is by scrapping a lot of vessels and it's going to be really, really miserable and painful for a long period of time to scrap them. You know, I think there's too many tankers out there as well, but the trade routes got all screwed up by the war. And as long as that keeps going and, you know, especially as long as the Panama Canal is basically shut to a seaborn traffic because of the drought, you're going to have screwed up trade routes and screwed up trade routes tend to, you know, lead to harder charter rates, more ton miles, all that sort of stuff. I mean, people aren't paying attention to what's happening in the Panama Canal, but it's a total mess. Well, the other element to that is,

is, is if you look at, you've got the sewers and you've got the golf, like both of those looking kind of like problematic, like if you were just a hedge, hedge that, you know, a geopolitical risk, it's like, what do you, how do you hedge it? Well, you age it with

like the tankers.

Yeah. Yeah. One thing I would say, and I've made, you know, absolute fortunes and steel that floats and, you know, I'm long OSVs and I'm long drill ships right now. But the one sector that looks really attractive to me in steel that floats is car carriers. There's a shortage. The, the Chinese have finally figured out how to make cheap cars and export them. And they're exporting them as fast as they can. And there's not enough car carriers to move the damn things. And the Chinese will keep exporting $10,000 cars anywhere that that'll take them as long as they can find someone to carry it. And what we've learned is that when you put a lithium ion battery in the ocean, it tends to catch fire and they've burned a lot of car carriers the last couple of years. And, you know, you have, you know, supply demand mismatch. The Chinese need, you know, they're the demand side and supply side keeps sinking. And I mean, it's sad that, you know, because people have been dying in these car carrier accidents, but there's been a lot of them. And, you know, I look at supply demand mismatches where the supply side is, you know, constricted in demands, just ripping. And I don't think people, enough people are talking about what's happening in car carriers. I have no positions. I'm kind of pissed. I missed it, but I think it's a lot of legs left.

Are there a tradeable

stocks that are specialized in that? Yeah, there's quite a few of them. I'll let listeners go discover them for themselves.

They're all like you and your pep pennies or like,

oh, no, no, these are, you know, multi-billion dollar businesses. Right. Okay.

Yeah, it's good to know. I didn't, I didn't never looked up any of those.

All right.

Anything in the shipping space is going to be large, large enough to get into it. Just because of the virtue of the fact that it's always a deep finance industry. Because it's like you can't go and build any particular ship with, you know,

grandmas coins. Like it's, it's

just capital intensive. Right.

Right. So let's move on. Because Chris, I know you have been focusing a lot on the offshore drillers and copy has been on that trade quite extensively as well. They clearly have been a great investment to date. I mean, many of them are up, you know, fivefold or more. Are you still bullish? And is it still a good time to own these stocks?

They're still dirt cheap. But I mean, they're still dirt cheap.

I don't know what else to say. And then, and then when you look at the fact that I don't think this is round of the cycle that we're going

to have shale, like

bailing anybody out, which is what it did in the last cycle, that that now seems to be evident. And look, shale is going to do well. I'm not, I'm not bearish shale at all. I'm just saying that that shale is not going to do what shale did last time. And if that's true, then we've got a shortage and we've got a problem. And then if you've run across where we're going to get it from, basically in the last highs, like back in the sort of 2012 through 14 kind of phase, there was a whole like a shitload of money went into everything, including offshore. And what's interesting is that the dynamic that took place there was that they found a whole lot of stuff, right? It's actually just sitting on the shelf. So the metrics, the financial models for the stuff have already been built. So it's like you're sitting there, you've got a bunch of these guys where they go, okay, we know that we've got $30 oil. It's sitting there. We know what the dynamics are to get it.

The issue that is at hand is that, a,

you've got like a political front where you go, okay, do we go and deploy what is literally billions of dollars, right? Because you're going to put a rig in the water. It's like probably 1.2. You're going to have every rigs going to have four OSVs. They're like, I don't know, 65 to 80 at a guess. No one knows because no one's.

Yeah, millions.

So like this is very, very expensive, right? So your time, like as a consequence, you need to have a certain

longevity of timeframe to say, okay,

I'm going to get my capital back and then I'm going to get a return on the capital. And what that requires is security. It requires certainty of outcome and certainty of outcome on the political front. When you've got sleepy Joe, you're stumbling around.

He could at any point go, no, no, no, we're going

to put in a tax

on, you know, X, Y, Z.

And that's just that's a very difficult environment for people to take risk. And so we're just seeing and of course, you know, as I referred to before, we still got your cowards in Wall Street who are wearing their high heels and trying to figure out what the new pronouns are so that I want to finance these things. So there's a whole of the restrictions taking place, which just keep building momentum. Now add to that the component, which we began this discussion with, which is interest rates,

you

know, increasingly the market's understanding that it's not a short term environment of interest rate moves. So when you're looking at it's not a matter of saying, okay, the interest rate is X right now. It's a matter of saying, okay, what's the interest rate going to be over a financing of something like a rig over a 30 year timeframe? And you're no longer looking at a

lower for longer environment. You're looking at a higher for longer environment.

So your entire models that you've you build suddenly start looking very, very different.

And so there's

a certain amount there where you're going, okay, in order for this to actually work, we're going to have to actually finance, you know, build into our metrics a much, much higher cost of capital. And hence, we need a

higher cost of ultimate underlying, you know,

oil or gas or

whatever it is.

And so there's a whole, there's basically a multiple different

cost components and risk components to the energy space and the offshore space in particular, which basically are leading to a situation where there's just nothing really happening. At the same time, the guys that are in the space are just, they're like, they're going to, they have sucked up most of the market or the market and they're just going to print money. So it's, you know, I can add a little bit to the tobacco industry,

which when you remember when

when they actually found out that tobacco kills causes cancer.

And then

they're like, okay, you know, now these guys can advertise and everything else. And so, you know, everyone was like, oh, we're going to be bearish in tobacco stocks and everybody sold them. But what was interesting was like by putting legislature into place, which disincentivized tobacco production, it meant that the existing companies just had a fantastic motor build around them. And we've got a similar dynamic that's taken place in the offshore space.

So you've

got literally a motor around these guys because like, who right now in North America is going to go out and go, oh, I want to build a new company doing

this. And even if you want

to do more financing, no. So then I

can,

they're

not going to add any more of this equipment, okay? The existing equipment, what you see is what you get. I like to think of it like being like Cuba, you know, like in 1959, everything ended and like that that pink Chevy that they have, you know, that all the tourists, you know, go around in the convertible. Like what you see is what you get. And this, they're just going to buff it and repaint it. And that thing will be going for another 100 years because they're not getting any new cars into Havana. And I think that's what's going to happen with all of this equipment. And I can't believe this stuff trades at five to 10 cents on replacement costs where,

you know, I think

they're going to earn 30, 40% on their capital based on replacement costs. So, you know, if it costs a billion to to build a new seventh gen, you know, drill ship, I think they're going to make $300 million cash flow a year. And the amazing thing is you could buy this piece of equipment for less than 100 million. Exactly.

You're

buying it

for one third of cash flow. I don't know why you wouldn't buy

you can. I mean, I

have. There's another dynamic.

Yeah. Look, I mean, I'll, you know, full disclosure,

we're

balls to the walls deep in the

stuff. So, like, you

know,

and I'm going to hurt if I'm wrong, but

you've

got to also think about

the fact that

they, these companies, like, what are

they going to do with the cash flow? I

think they're just going to keep divinity, diva, hey, there's two things that can do with the money, right? They can just reduce debt and a whole lot of them have almost got no or little debt, right? So, they

can do that or

they can just dividend

that money back to shareholders because the shareholders still are risk averse, right? So, they don't want to go out and drill more or doing anything else like that. So, any more

equipment, I think you're also going to see a lot more consolidation. And when these guys consolidate, it just leads to better, economies of scale, synergy and better pricing, quite honestly, because Exxon can't go out to 10 guys and play them off each other if there's only three

guys left. I don't see anyone in, you know,

US antitrust carrying what happens to the oil field, you know, oh, you guys in oil sector want to do something with oil, who cares? You know, we're going to be running the economy on unicorn farts in 10 years. Like, you guys do your oil stuff, we don't really care. And I think you see a lot more consolidation.

But the interesting thing just to touch on that with the respect to the consolidation, and I agree with you.

And by the way, we've just seen it with Exxon taking out pioneer. And so, it's the dynamic that's taking place there is that it's a consolidation, but you're not adding any supply. There's no aggregate supply increased. It's just my shit on the chase. I think you're still

going to see a bunch of older vessels that have been stacked since like, look at like, trans ocean, like all these vessels, some of them have been stacked since 2016. On the earnings call, guys were asking them, Hey, when are you bringing these things out? And they're like, yeah, we're thinking about it. We're doing studies. Like,

they

didn't want to say that it would cost four or $500 million to reactivate this vessel. And they're not going to reactivate it. Like the return on capital is no good. If you let it sit there, rusting away for two or three more years, then it's going to be six or 700 million to reactivate. Plus inflation, plus like, there's no parts. No one builds parts for this stuff anymore. These things aren't going to be reactivated. Like, I think trans ocean is going to lose five rigs that are just going to be scrapped. I mean, they dumped a bunch on dolphin and dolphin doesn't know what to do with them either. I think you're going to see the overall fleet size keep contracting.

I like your I actually I'm going to steal that. I like your whole analogy with Cuba, because that's basically what it is. I stole

that from someone else. It's not original.

Well, it's funny, you know, I grew up in Africa and it's like one of the things that you see in Africa, of course.

And this is this comes down to my argument of like inflation versus deflation largely. You know, you never get deflation, right? You

wander around there and it's like, it's not because there's a production of economy. You get the very opposite, right? You get a shitty economy where

they where

you've got like difficulty in getting sparked, like as you name it, higher levels of bureaucracy. And

at the

same time, you don't have deflation. And I think that's broadly quite a good template for people to kind of understand what the world's looking like on a broad basis. It's a state inflation. Basically, it's a shitty stagnant economy,

surprising costs of

the goods and services that you actually need.

Yes, right. It's structural. Right.

Yeah.

All

right. So guys, let's move on. And I want to move on to commodities. And, you know, Chris, I'm going to make it open ended in a sense. Because I know that copy is going to have a lot to see on Uranium. Maybe nothing new, but because you've been on the show just a month ago. But what commodity themes are you watching? Like, are you into the energy story beyond the whole periodic table? It's all going up. Now, what's your thoughts on commodities? What's on your focus?

Well, if

you want to basically, the last 20 ideas, one of the best, well, the best sector to invest in was tobacco stocks, right? Because tobacco stocks got a mote put around them. When people decided that yes, it was potentially

one of these things that kills you, but no one really cared if you were Asian, so they carried on

buying tobacco. And there was no competition. And so you didn't have any additional supply coming on stream. And if you're invested in those stocks, when everybody lost their mind about them, and you compounded the dividends, well, congratulations, you just invested in the best sector for the last 20 odd years. I think that's basically where coal sits today. So there is a mote built around it, because we have all these woke twats running around trying to run the world and things that don't work. And at the same time, and if you go back and you look at the stats from last year, I was 30, I think I was 35% of global energy still came from coal. And then, of course, you've got the Germans who have just deindustrialized and they cannot get any of the energy from Russia anymore. So they guess what? Now looking to bring back coal. So you've got it and you've just got underlying demand. I mean, the Indians don't care, the Chinese don't care, the Russians

like, when

the Western world is the global alliance, they basically talking about something that is probably about 10% of the global population. So coal is not going anywhere. It's going to remain aside from the fact that you're thermal and met.

And

most of these gritter ornamies do not understand that you cannot have any steel structures without the use of coal, because how are you going to make it? So we've got this underlying demand is an insufficient supply. And the companies are absolutely dirt cheap, they're printing money. And they're not going to, I think they're just going to start and continue to divvy the money back. So like, you can build yourself an incredible dividend portfolio, which

we've done

a lot of the stocks right now. We've got a dividend portfolio and the asymmetric or the two strategies we run. And we have been both. But that's like, I mean, I just think that's just like an absolute no brainer of a sector to be invested into. So, and yeah, it'll be a little bit volatile, but you know what, I'd

rather have, these things could be like banks, literally,

they're semi-firmal stable. Do you want to invest into a company that's got massive free cash flow, no or low debt, where it

could pay back that debt with like, a couple

of years of free cash flow? Do you want to invest in that? Or do you want to invest in a bank that is running tier three range shows that make blood fruit shoot from your eyes and then you don't even know what's on your balance sheet items. It's just so...

It's absolutely amazing how the industry changed. Like, Kapi, I remember in the ketam report when you had P body down when it was at a dollar published in year. And... Yeah, really long. Yeah. And just how the industry has evolved since then, it's absolutely amazing. And you know, here it is, how many, you know, tenfold higher and it's still cheap, right?

These things are all really cheap. It's incredible. And they have nothing to do with the cash. They can't get a permit to build another mine. Like, they're not going to build new mines. Maybe Indonesia will let them build mines. But, you know, Australia is probably not going to let any more mines get built. The US, definitely not. They have nothing to do with the cash except by tax and dividends. And it's a great place to be. Be well the demand for coal goes up every year because, you know, the idiot Germans shut down their nuclear power plants and suddenly they need coal. It's great. You know, they're carbon score. The only thing they grade themselves on, like, they couldn't care less about anything except their carbon score. Their carbon score is going the wrong direction. And, you know, they have as many windows as they can build and their carbon store keeps getting worse because they're burning the cheapest, shittiest lignite they can now. It's kind of funny. I mean, I pity the Germans because they

can't all be that stupid. Here's the thing. 2015,

German

electrical production, 8%

of it came from coal. Take a guess what the last print was.

31%. Okay. So they've spent, I

don't know

how many billions of dollars on windmills right since 2015.

And they've gone

from consumption of 8% coal in 2015 to 31% today. Well done, Greens. You guys are geniuses. So, I mean, that's just a dynamic that's actually that's flowing through much of the Western world. But the big thing, and you just mentioned it, Kapi, is that there's no additional supply. There's no additional supply coming on.

And then you look at, I mean, I would look at that and I'd look at these companies

and I'd buy them literally for valuations that you're getting in the NASDAQ, but you don't have to.

Everything's supply and demand. And look, demand goes up every year and there's no supply. It's incredible. I love the trade. So, listen, Chris, have you been drinking some of the Kapi Kool-Aid and in the Uranium

space? We have, although we've not been as fully

loaded as Kapi has.

And it's hard to

be. We're more

conservative investors with respect to asset

weightings.

So, but no, we've been,

in fact,

we've been long Uranium

ever. We

started

like 2017. So, it was like, we had a like four year, three and a half year timeframe where it did absolutely stuff all for us. It was on a five percent waiting. And then like all of a sardine within a matter of like 18 months, you know, positions went like 5X and had a little bit of a pullback and as running. But

so we remain long. I think it's just, it's in,

you know, when you look at a lot of these sectors, like I said, it's not merely a matter of saying, what do I want to be into? So, like, where would you

just not, you know, where would

you, like, when

I look at like, where would you not want to be short? Like,

you know, if you say, okay, I refuse to be short something, then by definition, you should probably look at it and be like, oh, that's maybe a long, right? And so when I look at things like Uranium and then like, I'm like, you cannot be short that you're an absolute idiot if you're going to be short that. And

so then it's just a matter of, okay, how do you, how do you weight that position? And

what are the dynamics of the market and so on and so forth. So, you know, we remain bullish on Uranium and again, Uranium is a supply issue, like ultimately, I don't think this is a shortage of Uranium, but there's certainly an issue with respect to supply. And then what people don't realize as well is that Uranium is only so good as the rich stuff. And guess what, you know, there's only a few places that are enriching it and, you know, they're not all that friendly. So you've got a whole lot of that that could

easily get weaponized, like in a heartbeat. And it hasn't yet. Exactly.

So, so you definitely look at it and you go, okay,

what's the probability of that happening? What are the price? What's the, what

is the price of the asset that I'm paying now? In other words, like an insurance policy, it's like having a million dollar house, right? You got a million dollar house, you're going to pay a thousand bucks insurance on it every year. Are you going to do it? Of course you are. You're a fucking idiot if you don't. On the other end, you got a million dollar house, you're going to pay $250,000 insurance for you. You're like, man, that's dumb. And so what, what, and that's what I'm just describing to you is basically the NASDAQ versus the fucking Uranium industry, right? It's like, you know, you're paying a thousand bucks for insurance on a million dollar asset. Why wouldn't you? You're an idiot if you don't. So,

you have

to be long.