Remember back in 2020, during the peak of the coronavirus? A barrel of oil actually traded below $0.
It makes sense. With everyone hunkering down at home, no one was driving, and the entire world had an oversupply of oil. Sellers were put in the awkward position of paying to take oil off their hands!
Nearly three years later, the opposite is true. Stocks of Big Oil companies are up like crazy.
Take a look:
Experts expect oil to continue climbing, too.
With the likelihood of easier money policies next year, the continuing Russian-Ukrainian conflict and the U.S.’s need to replenish its petroleum reserves, it’s a perfect storm for higher oil prices.
(In fact, my colleague Adam O’Dell believes there’s a super cycle on its way that will propel oil to over $500 a barrel. And it could send one U.S. stock soaring 100% in the next 100 days.
He’s going to reveal everything in his exciting new event tomorrow, December 28. If you’d like to attend, click here to save your seat. But hurry! Space is limited.)
Funny enough, though, there’s another big opportunity that higher oil prices are fueling.
You see, with higher prices, oil companies are racking in even more profits… And they’re using that cash to fund the last thing you’d expect.
Renewable energy.
At first glance, it makes no sense. Why would oil companies — whose very existence depends on fossil fuels — want to fund its eventual replacement?
I go into all of that and more in today’s video.
Click on the play button below to check it out.
And click here if you’d prefer to read a transcript.
That’s it for this week! But remember, if you’d like to learn more about other big opportunities in oil, make sure to check out Adam’s webinar tomorrow. I know you won’t want to miss it.
Curious what subscribers have to say about Ian? Read Strategic Fortunes reviews from real subscribers here.
Market Edge: The Rise of the Donut Machines
I keep the vast majority of my nest egg in solid dividend paying stocks and in a handful of durable trading strategies that I truly believe in. This is my financial future, and I take it seriously.
But I also have a much smaller piece of my portfolio carved out for moonshots and, frankly, entertainment!
This is where I put the stocks that make absolutely no sense to my financial plan. It’s my equivalent to Warren Buffett buying Dairy Queen because, like a naughty little boy, he wanted to own his favorite ice cream store.
I bought a small position in Krispy Kreme, Inc (Nasdaq: DNUT) months ago for no other reason than that I like the donuts. It might make money. It might not. I really don’t care. It allows me to pig out on the merchandise without feeling guilty. If Whataburger were a publicly traded stock, I would buy some of it too for the same reason!
At any rate, Krispy Kreme was in the news this week. The company announced that robots would soon be running large swaths of the kitchen. According to Krispy Kreme CEO Mike Tattersfield: “Probably within the next 18 months, you’ll see some automation starting to go into the frosting, the filling, the sprinkles, and even the packaging.” Management expects that about 18% of its production can be automated over the next year and a half.
This isn’t a gimmick. According to estimates by JPMorgan, Krispy Kreme currently spends over $100 million in labor costs making donuts. Apart from the current efforts, as much as $60 million of that can potentially be automated.
It’s not just Krispy Kreme.
Chipotle (NYSE: CMG) made news a few months ago when it announced it was experimenting with robots making tortilla chips. And of course, just about every major fast food and fast casual chain now allows for online, mobile or kiosk ordering … which reduces the need for manpower at the cash register.
As supply chains get shorter and production returns to the United States, we don’t have the available labor to actually do the work, or at least not affordably.
This is contributing to inflation in a way that the Fed is mostly powerless to address. Chairman Jerome Powell can jack up interest rates to the moon, but he can’t snap his fingers and make new, fully-trained workers magically appear out of the ether.
The only viable solution to deglobalization and the nasty, lingering inflation — or even stagflation — it promises to bring is massive investment in automation technology. This would include donut-frosting robots, of course, but it also includes artificial intelligence and really any innovation that results in squeezing more productivity out of fewer people.
This promises to be one of the great opportunities of our lifetimes. And Ian King is well on top of this trend.
