468 TIP. Why Buffett is Buying Oil Companies w/ Josh Young

My guest today is oil and gas expert Josh Young. Josh is the Chief Investment Officer and Founder of Bison Interests, which focuses on investing strictly in oil and gas, which has become very contrarian over the last few years. We had Josh on the show in Q1 and were blown away with the extent of his knowledge, which is very useful at the moment as oil swings from decade highs to average lows. A lot has been happening in the oil and gas markets so we spend the first half of the discussion catching up on Q2 headlines and spend the back half of the show discussing Buffett’s recent massive investments in both Chevron and Occidental. 

IN THIS EPISODE, YOU’LL LEARN:
00:00:00 - Intro
00:01:44 - Why the price of oil has been experiencing 30% swings in Q2
00:06:44 - How the war between Russia and Ukraine has been affecting the oil and gas markets
00:23:32 - How interest rates continuing to climb could affect the supply and demand of oil
00:28:04 - Recession risks for oil and why some smaller producers are experiencing very low valuation multiples
00:48:36 - Why Buffett’s Berkshire Hathaway has now invested $26B into Chevron and $13B into Occidental and shows no sign of slowing down
00:51:55 - How retail investors can think about investing like Buffett with a much smaller portfolio
01:04:47 - A forecast for airline stocks

I always learn a ton from Josh and this one is a doozy. I hope you enjoy it and without further adu, here is my conversation with Josh Young.

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[DiabeticDawg]

It feels so good to hear another soul talk smack about the Canadian government. Needs to become more widespread.

[johnnyBGD]

Logic is so nice to hear these days, it such a rarity!👍

[jimjackson]

The price of oil is the highest In 10 years in yet the price of gasoline is far higher than 10 years ago. That is taxes in Canada at least. Why doesn’t anyone mention that?

[duanejackson]

Personally I would think that oil is heading downward, at least in this year and likely into the next 2 years, the White House is putting too much pressure on them. Right now I'm holding mostly short positions with WTI. And the short-term energy Outlook report is indicating much lower oil in the next 2 years, and government has a way of making it predictions come true.... I think the long-term trend of oil is definitely going higher though, but for an investor like Buffett the short-term fluctuations mean nothing. He is more interested in the value of a company and the predictability of its dividends and future profits. I think in the near term we will see fluctuations swinging as low as 75 a barrel, but for the long-term investor that would be a good opportunity to buy Big oil, that's just my opinion.

[LucianoCantabruel]

So the mistake that Europe did was to what? had double down on Russian hydrocarbons or double down on alternative energy? if it´s the second like Josh is implying then Europe has to invest more effort in becoming dependent on oil products that will cost even more than before and to have suppliers that can potentially become equally unreliable as Russia in the future. This strategy will really make Europe keep on digging the whole instead of finding any independence at all. The only one benefited are people like him that invest in oil and gas, which is obviously the reason why he is so adamant to defend the absurd of such a thesis. He doesnt show no data or analysis to support the thesis agains alternative energy and other mechanisms. I dont claim an easy path, but the hydrocarbon dependency promised to be hard enough already, and will only bring more pain for europe and everyone else.