Larry McDonald — Oxbow Advisors Interview Series 2026 (Ted Oakley)

Chevron is one of the biggest oil & gas companies in the world. McDonald sold about a third of his position last week — but only because the stock had run up too far, too fast and he wanted to lock in some gains ("counter-trend" trimming). That's a timing move, not a change of heart.

His core view stays bullish: "you want to be long energy." He thinks oil and gas have years of upside ahead as money rotates into hard assets, so he plans to buy back on dips over the next three to four years.

Patterson-UTI is an oilfield-services company — it owns the drilling rigs and equipment that oil producers hire to get oil and gas out of the ground.

Like Chevron, he trimmed some after a strong run, but it remains part of his long-term bet that energy is in the early innings of a multi-year bull market.

XOP is a fund that holds a basket of oil & gas "exploration and production" companies — the firms that actually find and pump the oil. Buying it is a simple way to own the whole group at once.

He trimmed it after the recent rally but stays bullish. His big-picture point: all the major energy ETFs combined are worth only about $3 trillion, tiny next to the roughly $31 trillion in the Nasdaq-100. Because the sector is so small, even a little money rotating in can push it up a lot.

XLE is the main fund tracking the big U.S. energy companies. All its holdings combined are worth only about $2 trillion, and energy is just ~3% of the entire S&P 500.

His argument is that energy is badly under-owned. Back in 1968–81, energy, materials and industrials made up around half the index; he thinks energy alone could climb from ~3% back toward 10–15%. A move that large, into such a small sector, would mean big gains.

FCG holds natural-gas companies, including the pipeline operators (MLPs) that physically move gas around the country. These firms throw off lots of cash ("free cash flow" — the spare cash left after running the business and investing) and are using it to buy back their own shares, which boosts the value of each remaining share.

His twist on the AI story: everyone chases the chip makers, but the real bottleneck for AI is electricity. Data centers need enormous power, and natural gas supplies it. So he calls gas a "foundational AI trade for the next 5–10 years" — owning the fuel and pipes behind AI, not the chips.

OIH is a fund of oilfield-services companies — the businesses that supply drilling rigs, equipment and labor to oil producers.

He names it as one of the four big energy ETFs in the under-owned energy complex — part of the same "energy is tiny and due to grow" thesis.

SLV is a fund backed by physical silver — buying it is roughly like owning silver bars without storing them yourself.

He sold around $106 because the market had gotten frothy: traders were buying eight times as many bullish bets (call options — contracts that pay off if the price rises) as bearish ones, a sign of crowd euphoria. He bought back near $80 after it cooled. The long-term case is intact — precious metals are only ~1.25% of household wealth versus ~3% in the 1980s, so he sees room to grow — but he warns silver swings violently, so be careful buying in.

Core Natural Resources is a coal company — and coal is his contrarian favorite. It's a cheaper, smaller company that generates strong cash and is buying back its own stock, with a healthy balance sheet.

Why coal? It's the fastest power source to ramp up if AI data centers suddenly need more electricity. And with the Strait of Hormuz disrupted (cutting ~20% of liquefied natural gas supply), coal gains global pricing power as a substitute. Good cash flow plus a strong demand tailwind equals attractive risk/reward in his view.

HydroGraph is a small company in graphene — a high-tech material made from carbon, used in batteries, electronics and advanced manufacturing. It falls under the broad "critical minerals" theme: materials a country needs for defense and technology.

He's been buying it as part of a bet that the U.S. is "way behind China and Russia" on critical minerals and will pour money into catching up. He specifically looks for companies with strategic relationships to governments.

Tivan is an Australian critical-minerals company (rare earths and related materials). Rare earths are essential for magnets, electronics and weapons systems, and supply is dominated by China — making domestic alternatives strategically valuable.

He met with the Tivan team and likes it as a national-defense / rare-earths play, again favoring names with government ties as the West tries to build supply outside China.

COPX holds copper-mining companies. Copper is essential for electricity, so it's central to rebuilding the power grid for AI and electrification — a story he likes long-term.

But the price has run up too hard, too fast. Versus the Nasdaq, copper miners are the "most overbought in ~30 years" (a parabolic, vertical move that usually snaps back). So he's still a long-term believer but is trimming and cautious right now — hence neutral rather than a fresh buy.

Bank of America is a major U.S. bank. McDonald remains a seller of bank stocks generally.

His reasoning: investors piled into banks betting on looser regulation under the Trump administration, pushing prices well above their April lows. But the sector is having its worst start versus the S&P since 2008, and he thinks banks are exposed to the brewing private-credit stress — so he'd still bet against them.

JPMorgan is the largest U.S. bank. His complaint is purely valuation. "Price-to-book" compares a stock's price to the accounting value of what the bank actually owns; JPM hit about 2.6 times, versus a historical norm near 1.6.

In plain terms, investors are paying a big premium for the bank's assets on optimism about deregulation — "crazy overbought," in his words. Too expensive, so it's part of his bet against the financials.

Microsoft is one of the two biggest stocks in the S&P 500 (with Nvidia, together ~14–15% of the whole index). It trades at a very rich price relative to its sales.

His worry is concentration: if you just own the index, roughly $150,000 of every $1 million goes into two extremely expensive AI-linked stocks. That's far riskier than people realize, so he'd reduce exposure to these mega-caps.

Nvidia makes the chips that power AI, and it's the other half of that top-two concentration in the S&P 500.

"Everyone's in the chips — the dumbest trade on the map." His point is that the trade is dangerously crowded: when everyone already owns it, there's little new money left to push it higher, and a lot that could rush out. He'd rather own the energy infrastructure that powers AI than the chips themselves.

Meta (Facebook, Instagram) is one of the big "hyperscalers" — tech giants building enormous data centers. Counting the communication sector, names like Meta help push the S&P to roughly 50% AI/tech.

His concern: for years Meta was a cash machine with low spending needs. Now it's pouring huge sums into AI data centers ("capital intensive"), which eats into profits. A crowded, expensive, increasingly cash-hungry stock inside an over-concentrated index — reasons to be cautious.

Alphabet (Google) is the other hyperscaler he names in the same breath as Meta.

Same story: a former cash cow now spending heavily on AI infrastructure, and another big weight inflating the S&P's tech concentration. He'd diversify away from this crowded top end of the index.