MI253: The Bull Case For Commodities w/ Lucas White

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Education, Investing, Business

4.6 • 592 Ratings

🗓️ 31 January 2023

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

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Summary

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. NEW TO THE SHOW? Check out our Millennial Investing Starter Packs. Browse through all our episodes (complete with transcripts) here. Try Robert and Rebecca’s favorite tool for picking stock winners and managing our portfolios: TIP Finance. Enjoy exclusive perks from our favorite Apps and Services. Stay up-to-date on financial markets and investing strategies through our daily newsletter, We Study Markets. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: Fiscal.AI Connect With Lucas: Website | LinkedIn Connect With Rebecca: Twitter | Instagram HELP US OUT! Help us reach new listeners by leaving us a rating and review on Apple Podcasts! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:02.7	Oil and gas companies are extremely cheap right now. Generally speaking, commodity producers
0:07.6	in general are very cheap right now. Historically, oil and gas companies, metal and mining
0:13.5	companies, kind of, they've traded at about a 20% discount in aggregate relative to the
0:19.2	broad equity market going back to the 1920s.
0:22.1	Just to give you a sense for how cheap these companies are right now, that discount is more like
0:26.0	55, 60% discount relative to the broad equity market.
0:33.5	On today's episode, I'm joined by Lucas White, who's the portfolio manager at GMO for the
0:40.2	resources and climate change strategies and a partner of the firm. During this episode, I get
0:46.2	Lucas's outlook for the energy sector going forward. He explains why energy is still very
0:52.3	cheap and undervalued at today's prices, what the main
0:56.0	drivers of performance will be for the sector over the long term, along with his views on
1:00.8	the move towards clean energy, what this will do to the industry, his thoughts on coal companies
1:06.5	transitioning to clean energy, and what companies he thinks offer better opportunities in the space.
1:13.3	I really enjoy today's conversation with Lucas. He cleared up a lot of questions I had on the
1:18.9	energy sector heading into 2023 and he points out some really interesting trends that I think we
1:24.5	should all be aware of as investors, and he shares what he thinks are
1:28.3	the best ways that we can capitalize on these opportunities going forward.
1:32.9	So without further ado, please enjoy today's episode with Lucas White.
1:39.0	You're listening to Millennial Investing by the Investors Podcast Network, where your hosts, Robert Leonard and Rebecca
1:45.9	Hotsko, interview successful entrepreneurs, business leaders and investors to help educate and inspire
1:51.8	the millennial generation.
	...

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