When my family settles around the table after our big Thanksgiving dinner tomorrow, I can guarantee you one thing…
One of my family members will ask … what should I invest in for 2024?
My answer will be the same as it is every year. Quality businesses in a mega trend, run by rock-star CEOs, trading at great prices.
But I’ll let you in on a secret…
The biggest mega trend to watch next year? It’s going to be oil.
I asked what you thought, and you almost unanimously agreed:
When you ride a mega trend it’s like riding a 100-foot tsunami wave.
You don’t have to do much. Just don’t fall off the surfboard. Stay on and ride it all the way in.
And that’s what is setting up in the oil industry right now — a decades-long mega trend wave….
End of the Road, EVs
I took all the bunk about green energy — remember, I have two Teslas.
But it’s not cheaper. It’s not more efficient. It’s not carbon neutral.
It’s none of that stuff.
Aspirations got confused with reality and everyone just went into it.
Now, the honeymoon phase is over and Americans are falling out of love with EVs.
EVs aren’t selling. Early buyers have bought. Now, EVs are sitting unsold on dealer lots. Sales of all-electric cars in the U.S. stalled out at around the 100,000-a-month mark since June.
Ford and General Motors pushed back investments in EVs. Even Tesla’s CEO Elon Musk hinted on the company’s October earnings call that it might slow down.
I think the Real Talk is this — EVs aren’t making the top of anyone’s Christmas list this year. And we’re going to need fossil fuel for a long, long time.
We still need about 100 million or so barrels a day.
Over the next year, we will continue to see more acquisitions among energy companies.
We are starting to see that play out right now…
- In October, ExxonMobil agreed to acquire Pioneer Natural Resources for $60 billion. The deal would make Exxon the biggest producer in the largest U.S. oilfield and secure a decade of low-cost production.
- Then, $300 billion market cap oil giant Chevron agreed to buy U.S. oil producer Hess for $53 billion. Chevron doubled down on its bet that demand for fossil fuel will remain robust for decades to come.
If the past is a guide, the acquisitions will happen quickly and prices will soar.
I don’t know which companies will be acquired, but I do know that the best oil companies are poised to run higher.
And it’s cheaper to buy oil on the New York Stock Exchange than it is to drill…
Why Should You Buy Oil Now?
All signs show that — inflation is slowing.
The latest probability for another Federal Reserve rate hike in December is now pretty close to 0%. And there’s now about a 30% probability that the Fed will cut rates in March 2024.
(Click here to view larger image.)
I’m sharing this latest economic news with you because it made headlines.
And investors get excited by big headlines and happy news … so when this came out, investors started to come out of the woodwork to buy stocks.
That’s not the way to make money in the stock market. You don’t make money by buying high and selling low.
You make money when nobody is interested in stocks.
And over the past five months, Mr. Market has given up great opportunities to add little-known businesses at great prices.
The opportunity has never been better to buy into oil.
Mr. Market plays catch-up pretty quickly when it comes to oil stocks. That’s why it doesn’t pay to procrastinate.
Gains can pile on rather quickly and I don’t want you to miss out.
2 Oil Opportunities
One best of the best oil company is Occidental Petroleum Corporation (NYSE: OXY).
I recommended it to my Alpha Investor readers in April 2022.
At the same time, Warren Buffett was buying it at Berkshire Hathaway. We paid around the same price as Buffett.
And anytime we can pay the same price as Berkshire Hathaway it’s a happy day.
Here’s the thing. Berkshire released its quarterly update a couple weeks ago…
Buffett and his team bought even more! They bought another 4 million shares at higher prices than our recommendation!
That tells me, we got it right.
And if you’re looking to add more exposure to oil in your portfolio, Occidental is a good buy right now.
But I’ve got another opportunity to share with you today…
Thirty oil companies have been legally approved to pay out $17.9 billion in the form of “MLP checks” this year.
These companies transport millions of barrels of oil and natural gas across America every single day.
As these companies grow, America gets access to more oil and natural gas.
Best of all, while they may trade like stocks, these companies exist in a world of their own…
You don’t invest in shares; you invest in units. You don’t become a shareholder, you become a unitholder … a silent partner in the company.
And, as a silent partner in one of these companies, you’ll get paid MLP checks not only this year … but year after year for as long as the company remains profitable.
They provide investors with an income stream unlike any other.
Regards,
Charles Mizrahi
Founder, Alpha Investor