Is There a Difference Between Replacement Cost and Replacement Value?

We continue our pilgrimage through the oil and gas space and today we have Victor Swishchuck from Letko Brosseau to help us dive into the upstream section of the Energy Sector. Victor gives us a summary of what it means to really understand the energy sector from zero to one. We go from understanding the different types of crude oil to the different types of Upstream Oil and Gas Businesses, to how to value them and the most common pitfalls every naive investor faces when getting into the industry.

• [0:00] Who is Victor Swishchuck?
• [5:00] Intuition Guided by Experience
• [10:00] Studying Credit and Bonds before Equities
• [18:00] Analyzing the Energy Sector: From Zero to One
• [30:00] What does it mean for Oil to be Sweet, Sour, light, etc
• [42:00] Upstream Oil and Gas Businesses
• [1:00:00] Valuation: Implied Oil Price by Reversed NAV.
• [1:13:00] Common Pitfalls and Where can you get burned?
• [1:30:00] How to learn the industry?
• [1:47:00] Closing Questions and more from Victor Swishchuck

Finally, a big thanks to the following sponsors for making the podcast a reality!

Mitimco

This episode is brought to you by MIT Investment Management Company, also known as MITIMCo, the investment office of MIT. Each year, MITIMCo invests in a handful of new emerging managers who it believes can earn exceptional long-term returns to support MIT's mission. To help the emerging manager community more broadly, they created emergingmanagers.org, a website for emerging manager stockpickers.

For those looking to start a stock-picking fund or just looking to learn about how others have done it, I highly recommend the site. You'll find essays and interviews by successful emerging managers, service providers used by MIT's own managers, essays MITIMCo has written for emerging managers, and more!

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