00:03 Hey guys, John Polomny here, Actionable Intelligence. Today is Saturday, December 6th, and this is the weekly market update. Disclaimer, anything that you hear or see on this podcast or video, it's not to be taken as investment advice. I am not a registered financial adviser. I cannot give you personal financial advice.
00:28 Please do your own due diligence. It's your money. It's your responsibility. Okay. Before we get started on the slide deck for this week, I'd like to point out a couple things. I'm getting popular enough now where I'm getting imitations on X or Twitter and also on Discord. So understand that yes, I market a newsletter.
00:54 It's all through Substack and it's all via the links in the show notes. It's all above board. I will never directly email you and try to solicit you for anything. So if you get a solicitation from somebody that looks like they changed a letter in my name or added a "John.poly plus one" or something, be very clear.
01:20 It's not me. I'm not doing that. And they're trying to strike up a conversation. I don't do that. I do have conversations with people when they DM me, or if they ask me a question. But I don't go out soliciting you or directly DMing you and try to chum up with you so that I can hit you up for some kind of scheme.
01:43 So be aware of that. That's out there. We have some parody accounts also. That guy made one, was pretty good. I think it's John Bubba Bubbaliciously, broadcasting from the diabetic belt in South Texas, something like that. I like these things because all publicity is good publicity.
02:04 And when somebody sees that, like this guy's goofing on Actionable Intelligence or some of the stuff I say, then people that don't know, they were going to say, well, I want to know what's going on. So I look at that as a positive. More eyeballs is better as far as I'm concerned.
02:24 And I know people don't agree with me on my geopolitical calls. Not everybody agrees with me. I don't agree with everybody else. But these are the calls that I make. And people will acknowledge the calls that I make that they like, but the ones that they're biased against or don't like, then I'm an idiot.
02:43 I don't know what I'm talking about, which very well could be the case. I don't put myself up there as a 100% batting average. So anyway, be aware that's out there, some of that stuff. So hopefully we just continue doing our work here and moving forward, putting out information based on the best that we can interpret the events the best way that we can and how they are going to affect investing.
03:17 All right, let's jump into it. So this is from Bloomberg — US plans more stakes in mineral companies. Because of the lack of any kind of real policy, because we've been debating who should go into what bathroom and all this other nonsense. We don't really have policies that are addressing what the challenges are in this new multipolar world.
03:48 One of which is securing the necessary raw materials for an industrial base so that we can be a military, technological, manufacturing power. So we haven't been doing that. The big case is uranium, for example. We all know that. But it's filtered down into rare earth metals and some of the other things where we're puffing our chest out that we're going to put China in its place, our main competitor.
04:13 There's going to be a war. Former CNO, chief of naval operations, telling the Navy to prepare for a shooting war with China in 2027. And then we find out, well, we have to import all of these critical minerals from the people that we're anticipating having a war with.
04:32 So that didn't make too much sense. So it looks like at least this current administration, whether you like them or not, has made moving forward with trying to address this issue around critical minerals. They have the list of what's on the critical mineral list, which I believe there's like 60 elements on there now, anything from uranium to copper to rare earths, what have you.
05:00 And so the other part of that is investing billions and billions of dollars, having the government get involved and backstop and put artificial price levels in and take stakes in companies. So expect more of this is the point I'm trying to make. And so this can be helpful in trying to identify where's that money going to go, because they're going to be talking about — if they're going to do this seriously, it's going to take tens if not hundreds of billions of dollars,
05:28 and that's a lot of money going into some of these companies. So we can expect more of that. That's what the Bloomberg summary is talking about. Says US plans more stakes in minerals companies. Trump official says the US government plans to take more equity stakes in critical minerals companies to counter China's dominance in raw materials.
05:50 Critical minerals such as gallium and cobalt are used in products ranging from iPhones to industrial magnets and are vital for defense systems and technologies needed to cut carbon pollution. The US government has spent over $1 billion to take stakes in critical minerals and mining companies, including deals with MP Materials, Vulcan Elements, and Trilogy Metals.
06:12 So we're going to see more of this. Again, I think it's coming in uranium. I think we're going to have a United States strategic uranium reserve. I think that's coming. That'll just be icing on the cake. We don't need that for the uranium price to go where we think it's going, but that's just going to be more icing on the cake.
06:36 Kind of like SMRs. No one really was anticipating the potential demand from SMRs. We just said, hey, just the normal course of the underinvestment is sufficient enough to force the price higher. And so we've got all these other lottery tickets also — SMRs, the buildout of nuclear around the world, turning all these reactors back on, the AI power demands and other power demands which will be bridged by natural gas, but will ultimately end up being nuclear.
07:09 And again, we go back to, just for example, where's the supply going to come from? It's very interesting. And so this is even more egregious, the lack of planning. And working on this is what China and Russia and their systems do. This is because we are limited a little bit. One of the downsides of our political system being a two- and four-year election cycle, we don't really get on the stick until a crisis develops because no one wants — no one's going to go try to run for office where we need to spend
07:45 hundreds of billions of dollars on critical minerals. Nobody pays attention. You have to wait till there's a crisis, then there's a focus and then it enables the political class here in the US to be able to sell this, sell the ideas and get it going. That's not probably the best way to compete with these other folks, but it is what it is.
08:05 We don't make policy. We don't do that. We're interpreting policy, looking at what's going to happen, and trying to allocate capital in a manner that allows us to take advantage of these dysfunctions, if you will. So here's a chart going back to pre-2022 on physical palladium shares, the ETF.
08:34 It looks like — would you go long this chart or sell it short? This is kind of a bullish chart. I just throw this up here — it's easy to say, well, we're in a PGM bull market, but what does that really look like? This is a very classic rounding bottom — three times trying to get through this one level and then breaks through, consolidates, and then looks poised to move higher.
09:02 So I think the platinum group metals, they had a really good year this year, 2025. I think they're going to continue higher. I think a lot of commodities and resources are going to be moving higher over the next several years as we've discussed. And I think you're going to see a lot of charts like this.
09:22 You can see this moving average has kind of stopped going down, leveled out, and it now looks like it's turning up. The whole thing is just very bullish. I mention this because in the Actionable Intelligence Alert newsletter, we have a company in there that not only probably has one of the best copper assets in the world —
09:42 it's had some issues with, but it's now straightening out the issues and getting it back on full production — but has just commissioned and brought online probably the best platinum group mineral asset in the world currently, and that just started up in the last month or so. Run by one of the best mining entrepreneurs in history, serially successful.
10:10 Stock got bombed out on some bad news. The assets were still there. They've been serially successful in developing assets. Not in the best place on earth, but that's part of the risk, but able to buy that stock on discount and looking forward to good things. Not only that, probably has one of the best zinc assets in the world also.
10:32 So you might be able to figure that out clue-wise what that is, but I'm very excited about that stock and a way to play both copper and platinum group metals. Again, that's in the Actionable Intelligence Alert paid newsletter in our model portfolio. People don't talk much about tin.
10:56 Now that I'm retired, I spend a lot of time perusing social media, curating various people that I know know what they're talking about. And I run into these things before they go mainstream. Again, we can't kiss all the girls. In tin, there's really like two major companies that are kind of producing right now.
11:19 There's another interesting company that seems to be gaining traction on social media. I think it's called First Tin. Obviously, Alphamin and Metals X are the two producers, but we've had a previous top or high in tin back in 2022. It looks like it had a big pullback and now it's been just grinding higher over the last several years.
11:49 Looking like it may want to go a lot higher. Something you might want to look at. I own shares in Alphamin. It's not in the portfolio. I own it in my personal portfolio. I think it pays like an 8% dividend, something like that. Pretty high dividend. The caveat obviously is it's in the DRC.
12:08 They did have to shut the mine down for like a month or so earlier in this year because there was some rebel activity there. So that's part of the game, right? This is where a lot of the good mineral assets are. They're not in the best countries in the world. And so that's some of the risk that you have to take on.
12:28 But that also presents opportunity because you could have bought that stock on discount. That asset was built, producing cash flow. They'd shut it down for the safety of their employees, shut down for about a month, and then brought it back online. So, just another resource with a great chart. So copper is trading at fresh new highs.
12:52 Lots of people are bullish on copper for next year. I'm relatively bullish on it just because of the supply disruptions we've seen across the world over the last year or so — basically around 9% of world copper production coming offline. Seeing that the world's largest copper producer, Chile, also struggling.
13:16 The positive news is it looks like we're going to get a right-leaning government, right-wing government, more market friendly. So we'll see if that translates over time into more business-friendly, more copper-mining-friendly legislation. It's not something that's going to take effect immediately, but again, that's another thing that we have been pointing out in the Actionable Intelligence Alert newsletter.
13:40 Some of our best performing asset classes has been Latin America. So we think that continues into 2026 as more and more of the countries there seem to be casting off the left-wing economic policies which have failed them over the last 20, 30 years and moving to more market and right-wing.
14:05 So make Latin America great again, I guess. But anyways, copper — look, it's not just going to keep going up forever. But can it get over $6 a pound next year? Can it get to 650? I don't know. Why couldn't it? I'm very obviously bullish on the world economy, which is my contrarian call.
14:28 I think that a lot of people are offsides on this just because — I said before that so many central banks have been cutting rates, inevitably you're going to see stimulation in economies, see PMI start moving up, and then we've shown before that as PMIs move higher and you see expansion, that drags raw material prices higher, and some of these things like copper and tin are in supply, they're having supply issues.
15:02 And so we don't necessarily need another country to come to the forefront and create like a black hole sucking in commodities like China did, but the underinvestment that we've seen across the resource markets over the last decade is just going to — any blip or pickup in demand, or any situation where existing supply goes offline, creates at the margin a deficit
15:31 and it forces prices higher. So looking forward to seeing copper move higher. It's doing well now. We have positions in both the dividend portfolio, the AIA Dividend Portfolio, and the Actionable Intelligence Alert newsletter to take advantage of this. So this was an article talking about the material demands for energy, chips.
15:54 I think it was from the IMF. It's worth reading. I'll put a link to it in the show notes. "Material demands for energy, chips, and minerals will determine who dominates data." Artificial intelligence is often cast as intangible. A technology that lives in the cloud and thinks in code. The reality is more grounded.
16:15 Behind every chatbot or image generator lies servers that draw electricity, cooling systems that consume water, chips that rely on fragile supply chains, and minerals dug from the earth. That physical backbone is rapidly expanding. Data centers are multiplying in number and size. The largest ones, hyperscale centers, have power needs in the tens of megawatts.
16:40 Let's say in the gigawatts — goes on at the scale of a small city. Amazon, Microsoft, Google, and Meta already run hundreds worldwide. But the next wave is far larger, with projects at gigawatt scale. An Abu Dhabi OpenAI and its partners are planning a 5-gigawatt — that's 5,000 megawatts by the way — campus, matching the output of five nuclear reactors and sprawling across 10 square miles.
17:08 We're seeing something also like this up in Amarillo, Texas at the Fermi site. Huge site. This is one of the takes that I think is bullish for companies like Texas Pacific Land and LandBridge. I've mentioned this before. They have the water, the natural gas, and the base out in West Texas. I think you're going to see movement towards that also.
17:31 Because you have to understand something. If you put a data center in Abu Dhabi, yes, you're probably going to get all kinds of incentives. They'll build nuclear reactors for you. But data, even though it travels at the speed of light, you need to be close to the data where it's being used, to where the data center is fairly close.
17:50 If you look at how high-frequency trading's done, how these huge hedge funds that do this millisecond, picosecond stuff, the data centers are very close to the exchange where the exchange computers are, because that cuts down on the travel time. Even though it's at the speed of light, it cuts down on the time. So if your server is out in the middle of nowhere Abu Dhabi and you've got one that's sitting right there next to
18:22 the New York Stock Exchange, and bots are trading high — this does give you an advantage. I didn't realize that, but it actually does. So it's just one of the things to be cognizant of. So here's — this is from the article. It's a chart, data center power demand growth.
18:48 So all data centers combined use as much power as some of the world's largest economies and demand continues to climb. So this shows the electricity demand in 2023 in thousands of terawatt hours. That's trillion watt hours. See China obviously on top, US second. But you'll note data centers are down here near the bottom. But by 2030, already data center electricity demand's bigger than like the UK or France.
19:17 And by 2030 it'll be the fourth largest consumer — if the demand for data centers is what's forecast in 2030, be the fourth largest consumer of electricity currently. So this is a lot of energy, and of course energy is everything. And there's this worldwide push. Do I think it has elements of bubble-itiousness? Yes. OpenAI, I can't figure out how they're going to make any money. People smarter than me can't figure out how these people are going to make money. But I think that it's kind of like the meta —
19:48 people think, or like I heard Zuckerberg say, you've got to be in the game, because if you don't spend the money and your competitor does and it breaks through, then you get left in the dust. But also, if you spend so much money you can't recoup the funds, then what's going to happen? So I think the best way to play it is just through energy and pipelines and people that supply this energy to these people is probably the best way to play it.
20:18 It may not be sexy. You may not get 10x, but I definitely guarantee you'll probably beat the S&P. So back to copper. They're saying — of course, it's the IEA. Take it for what it's worth. They're usually wrong, but this is what they were saying at a recent conference. Copper faces 30% supply deficit by 2035.
20:42 10 years is nothing in mining. Said copper is heading toward a supply shortage that could reach 30% by 2035, making the commodity one of the most vulnerable links in global supply chains supporting energy transition and artificial intelligence development. Joe Bond Beer, International Energy Agency's critical minerals analyst, said at the annual Critical Minerals Association conference on December 1st.
21:09 Unlike lithium, where new supply is emerging across diverse regions including Zimbabwe and Argentina, copper faces structural constraints that cannot be easily overcome through rapid capacity additions. The projected copper deficit stems from declining ore grades, rising capital costs, lengthy project development timelines that make copper particularly difficult to scale up compared to other critical minerals.
21:33 Now, I can pretty much guarantee you that if the copper price goes high enough, there'll be so much copper that they'll bury you in it. But this is the opportunity. Well before this becomes a problem, the price will go up sufficiently and billions of dollars will come in and every marginal mine, every mothballed mine, everything will come back online.
21:56 So it's not like we're going to run out of material, but this is the opportunity. The price is going to have to go up to incentivize that investment to capture that. And this article is right with respect to what we've been saying. This is definitely what we're seeing — declining ore grades, rising costs and lengthy project development timelines.
22:16 That's exactly true and that's going to exacerbate the problem. And this is why I think that resource speculating — I won't want to call it investing because I think investing is different. Investing is like when I buy a duplex cheap and rent it out and I get an 8 to 10% return, or I buy some growth company that has a moat that has a 12 to 15%. That's investing.
22:43 Resources go through cycles, and at some points in time, most of the time they destroy capital and they're terrible businesses, as I've said before, but there are periods of time that are unique to usually each commodity or resource that you can study, where the price goes up massively, spikes in a short amount of time relative to a supply-demand imbalance,
23:09 that creates a scenario where it can go on for a year, a year and a half, two years, maybe three or four years in best case, where these companies can enjoy extraordinary profit. So the idea is to understand the cyclicality, buy when it's out of favor and then wait for the inevitable return — low prices curing low prices, the supply declining, demand continuing higher, your price spike, and then that's when capital comes back in and you get rewarded. These things are not buy and
23:42 hold — you buy them and put them in your coffee can portfolio and your grandson pulls it out of your safety deposit box in 30 or 40 years. This is not how this is done. You have to understand cyclicality. You have to have patience and you have to have the ability to buy these things when they're out of favor and the prospects for their businesses are terrible.
24:09 This is why you see successful resource investors on podcasts talking about nickel. I mean, nickel, if you look at the chart and if you Google it and look at news, it's terrible. Who wants to? It's uninvestable. Blah blah blah. Same thing with oil. Oil's been down. Oil's going lower.
24:26 Oil's going to crash. It's got the highest short interest ever, the ETF. It's got the smallest component size in the S&P in its history. Who would ever buy it? Well, this is how you make money, because it's inevitable that these things go through cycles, and the inevitability and the volatility is what makes you wealthy.
24:47 But you can't just buy and hold these things. Now, that may be different with one of the IOCs. You can hold those for longer periods of time because they have the ability, like an Exxon or something, to return capital. Of course, they're not going to 10x for you, but it just depends what you're trying to achieve.
25:05 So copper, anything you want to look at, palladium, fertilizers, oil, natural gas, it's all cyclical. And as long as you're able to understand the cyclicality and the drivers of the markets, which isn't that hard even with AI, putting some time into it — but that's why people pay me in my newsletter to do that work for them.
25:31 And we don't get it 100% right, but I think we get it a lot more right than wrong in catching these trends. The problem is, a lot of this is, we have a tendency — because we're true speculators and contrarians — that we have a tendency to buy things early and then we have to wait. And a lot of people can't just sit there and go fishing or go to a ball game or just ignore it and sit on their butt until the thing turns. They need action.
25:57 They want that dopamine hit. So that's the hard part. Now, you could also do like Paul Tudor Jones, wait for a confirmation on the chart that you see, that rounding bottom or that long bottom and then the breakout, but then you give up some of the initial gain. My game is to try to capture the biggest portion of the move I can.
26:20 And so that means buying when nobody wants it. And if I have to wait a year or so, maybe even longer in some cases, but payoffs can be three, five, 10 baggers, and that compensates you for the dead years when nothing happens. We've talked about this before, though. So this is what I was talking about.
26:42 Look at how — this takes forever to develop a new mine, not just in the US, but the US has among the world's longest mine development lead times. I can't remember the name of the project. There's this huge copper project. I believe it's a Rio Tinto mine that they're trying to develop in Arizona.
27:01 And I think the last time I read about this, they have been trying to get the permits and get this thing going for 20 years. This is just ridiculous. This is exactly what the Trump administration is trying to move some of these roadblocks and expedite some of this, not only for jobs, but for our national security. Copper is, for example, on the critical minerals list.
27:24 You can't be a world power militarily, technologically, economically, and then rely on everybody else. You have this huge mineral endowment in the United States, not to mention Canada, Mexico, and Latin America in our own hemisphere, and then just be not exploiting it. That's not smart. So you see the years there, and you see a lot of big major mining countries, even Canada and the US, takes you 20 years to develop a mine.
27:54 This is why these things are not investments. They're speculations. In Mexico, Peru and Ghana you have the ability to bring a mine on faster there than you do the United States or Canada. This is a problem. So natural gas is another thing that's been performing well. Again, I don't necessarily have a view on it.
28:18 I've gotten killed in natural gas over the years. I do dabble. There's a couple companies I like. It's not in the portfolio because I don't like to put companies with K1s, but like San Juan Basin Royalty Trust is going to benefit from this. One of the crown jewel Canadian energy companies I have in the portfolio is the second largest natural gas producer in Canada.
28:43 There are ways to take advantage of this. What's driving this? Well, demand from AI power generation and also the fact that we're basically doubling LNG export capacity in the United States. Not to mention the fact we're into the heating season in the United States. And so again, you have to understand that you don't buy and hold.
29:04 The time to buy, I think, was back in October, but there are ways to play this. Pipelines, all kinds of different ways depending on what your risk profile is and what you're comfortable with. Again, I don't really mess around too much with natural gas. Oil's hard enough. I don't want to make things more complex with natural gas, but some people do very well in it and know what they're doing.
29:29 But it's just interesting that this is how fast things can change. In one quarter, natural gas is up — just in Q3, last quarter was up 20%. So that can — if you have a pure natural gas stock, that can be 100 or 200% move in the stock, right? And I see demand being driven here in the US again as that AI sucks in energy — we talked about that earlier in this particular slideshow. We can't build the nuclear power plants fast enough, so natural gas will be that
30:09 bridge fuel. We've talked about that before. We've talked about Energy Transfer Partners, ONEOK and Enbridge all being approached by people saying, hey, run a pipe to our power plant for our data center. We've shown the chart that shows, I think it's by 2030, doubling the amount of LNG exports from the US.
30:32 We have multiple LNG projects, export facilities under construction. Have one right here down here by Brownsville, Rio Grande LNG, I think it's called. I remember when I was up in Corpus doing a job, they had the big Corpus Christi export facility, which they just keep adding export trains to.
30:54 So I think that's going to be interesting. This is where we're going to get into what is geologically happening. There are some commentators out there that kind of say that, well, we just have this huge cornucopia of natural gas. There's so much natural gas, it's nothing to worry about. But we'll see what happens.
31:12 We'll see what happens, because you're going to get a tremendous increase just based on, like I said, the AI infrastructure and then these doubling of LNG exports, from basically about 13, 14, 15 billion cubic feet a day to right under 30 billion cubic feet a day. That's a lot of gas. So we'll see. So just another chart showing what's happening.
31:40 Natural gas, how it's kind of just taken off. Would I get into it now? Not necessarily, but I just think it's interesting to show what's happening. So oil services outperforming the S&P. I think we've shown charts like this before. This guy, All Star Charts coming up, he's on Twitter. Forget the guy's name, but he's putting out some good charts.
32:02 This is just another — oil services, the OIH versus the S&P 500. It looks like it's bottoming and now moving higher. That means that the oil services are outperforming the S&P. So this is interesting, something to keep in mind. Again, I'm very bullish on oil services. I think 2026 is going to be higher for oil and oil services.
32:29 I think they're going to come into their own. We've already seen a lot of the stocks, the drilling stocks, offshore drilling stocks have begun to move, and some of the stocks I have in the portfolio that do other oil field services have done well also. So we'll see what happens. Just rotation into themes that have that, and mean reversion.
32:55 And this is what we're seeing. Same thing with the oil and gas E&P ETF. You see that this bottom chart is the short interest, right? The outstanding short interest. If you go back, it's interesting — you see how high we are currently. It's kind of coming down now, but you see like back in 2022 or 2021, as short interest collapsed, we kind of had a 90% move just in this XOP ETF. Interesting.
33:27 If this continues down and short interest collapses on oil and gas stocks, what kind of a move could we be looking at? Just this is the ETF. That means there will be shares that outperform that. So I think that's kind of what we're looking at here. We've had basically a three-year bear market in oil and oil and gas names. Have I been early to it? Yes.
33:48 I think I have been early, but it looks like the chart patterns, the relative strength is starting to improve all across, from the integrateds to the Canadian shares I have to the drillers to the offshore and the service providers. Something's happening there. Money's moving into these sectors.
34:09 It remains to be seen — that's going to be confirmed by the oil price moving higher in 2026. Of course that is my view. I think that we have the contrarian view, but I think that as these economies don't underperform, as they outperform people's expectations, that requires more energy, and I think that we'll see that. A lot of people, the big funds, the big investment banks are calling for lower oil prices in 2026.
34:41 A lot of times these folks get things wrong at the turns. Again, we'll see who's right. But a lot of the shares that I have, I'm getting paid very good dividends that are well above what money market funds pay, and I'm getting share buybacks. So my shares are becoming more valuable every month, every quarter. So I'm fine with that, because a lot of these companies — I'll reiterate, a lot of them, these oil prices, even though they were low, still in many cases delivered tremendous cash flows.
35:12 And the companies weren't out drilling a lot more wells. They were just doing maintenance capital and trying to hold production. They weren't trying to expand production into a low-price environment. And so they had excess cash flow. And so they've been paying down debt, and there's been several companies in the portfolio that have reached goals that the managements have set, that they said, hey, we get down to this debt level, our market cap, then their loan covenants allow them
35:49 and they've just decided, hey, we're just going to return cash to shareholders via buybacks, and that's been very supportive. Now, if oil in fact does go to 30 or 40 and stays there, if we have this big massive recession, this huge oversupply that the IEA said is going to happen, 4 million barrels a day —
36:09 if that was true, oil would be at $30 a barrel right now. So I'm not sure that they've got that right. They definitely don't have the demand right. Demand is really going crazy right now in a lot of places. So we'll see what happens. So this is just a couple blurbs of what Goehring & Rozencwajg say on the most hated asset, which is oil and oil services.
36:35 Couple quotes here which you've heard me say before, but I just like quoting these guys. I'll make it even simpler. Oil is the most hated asset in the whole world. You don't have to go to Venezuela to find cheap oil assets. They're abundant.
36:52 You have offshore drill rigs in these US-traded companies that all went through bankruptcy, have no debt on their balance sheet, and they trade for 10 cents on the dollar, their replacement cost. That's a hypothetical replacement cost because no shipyard will build you an offshore drill ship. At the same time, we hear talks every day about how you can't be bullish on oil because the shales might be rolling over, but the offshore industry is about to have this big resurgence in Brazil and Ghana and Namibia and Angola.
37:23 But I hate to break it to you, you can buy the assets that go in and drill those things for effectively the value of the scrap steel on their decks. So something doesn't really make sense, and it's just a hugely hated asset class. That's what my view is and I think that we're going to do extremely well.
37:42 Is it going to take a little bit more patience? I think so. But I think the payoff is coming. I think oil and energy is going to surprise people in 2026. Wanted to show this. This is Weyerhaeuser. Look at the lumber chart. It's like making another double bottom.
38:05 It's like at decade lows. Why? Nobody's building any houses or remodeling any houses. So this is Weyerhaeuser, one of the big companies. I'm not saying to go buy this, but this is how — I want to show this. Look at how the price collapsed. It's like a waterfall. This goes on my watch list. I have a watch list of companies that I'm interested in, and I will periodically go back and look at them, because at some point the worm will turn for lumber and Weyerhaeuser.
38:32 So what will I do? I'll put it on my watch list. I'll do a rough Coles Notes review. Is this thing going to remain solvent? Is it in danger of going into bankruptcy? Then I'll start looking at some other competitors. And then I'll start watching the chart. I review the charts on my watch list.
38:52 There's probably 30 or 40 companies on there right now. And every two, three, four weeks I'll look at them and see if things are starting to bottom. The other thing I do is I look at the new highs and new lows list, the 52-week high and low list, and I look at the lows and the highs. A lot of times companies making new highs will continue to trend higher, or if one of my watch list stocks all of a sudden makes a 52-week high after it's been out of favor for a couple years, that starts cueing me to deep dive more. And so all this
39:23 information is readily available if you want to set up different screens. There's free ways to do it. I use StockCharts. They have all these things you can set up, pay a small fee. It's not too bad. And this is what I do. This will cue me, because there's so many companies and so many things going on.
39:39 If I read some blurb somewhere or some fund manager's quarterly report and he mentions a stock, maybe I'll throw it on there. I'll start watching it. I'll start looking at it and then that can start the research process. So this is the kind of stuff that I'm interested in.
39:58 Is this thing ready to buy? No, it's in a waterfall. It probably goes a lot lower. Maybe the financials are that it can't handle these lower lumber prices. Maybe their competitors will start shutting down. You see, low prices cure low prices, and eventually the stock will start, stop going down.
40:15 Everybody that wanted to sell will sell. It'll start bouncing around the bottom and then it's just a matter of time before it breaks higher and the worm turns for lumber prices. When will that happen? No idea. Can't tell the future. But I just wanted to give you an example. I saw this in an article. Somebody said Weyerhaeuser now trades below the value of its timber assets. I like timber.
40:36 I've had timber investments before privately, and what I like about them is your stumpage goes up about 6 to 8% a year. What's that mean? That means your tree gets bigger by 6 to 8% a year up to a certain point, just depending on the species. And so even though the price is down for lumber and lumber stocks, the stumpage increases every year.
40:58 It's tremendous. So it's definitely worth at least getting on the radar screen and keeping an eye on, because at some point it becomes so cheap. Again, you have to be kind of eclectic as a generalist investor and be willing to look at anything if it's cheap enough. And how hard is the lumber — it's kind of a fixed-cost business.
41:21 A lumber mill, the guys chop the logs down. What does it cost for them to process it? And then if you get a spike in lumber prices, especially if you start seeing competitors shut down mills and stuff like that. Again, low prices cure low prices. So just wanted to give you kind of an insight — this is how it clicks in my brain.
41:44 I throw it on my watch list and that's how it starts getting initiated. Maybe it gets tossed off in a year or two or six months, or the first time I look at it, it's so financially screwed up I don't even want to get near it. But then again, if it's a solid company and they're just a victim of the lumber price right now, well then that's just a matter of waiting.
42:07 So that's at least how the process starts. Okay guys, that's it for this week. I'm getting really excited for next month. I'm going to put out my 2026 — in the January issue I'll probably have an update on where I think things are going, forecasting things for the holdings we have. Again, I'm already very bullish on energy.
42:29 Again, bullish on the world economy. I would say relatively more bullish than the average person. Not a super bull, but I think it's a contrarian play. It's going to surprise people, and that will — I think if the realization comes in that I'm correct in my assessment, then capital will flow into that idea once it becomes more mainstream, if in fact it does, the facts play out on the ground.
42:56 So that's it for this week. We'll talk to you next week. Appreciate the subscriptions. Appreciate the support channel. I think we just broke 15,000 viewers on YouTube. I appreciate it. It's all because of you guys. And we'll talk to you next week. Thank you.