The Emperor Has No Clothes: Oil, AI & What Breaks Next

Sam Kovacs (0:00)

So, I mean, we've been lied to one time too many. I wouldn't be surprised that we're gonna be lied to one time again. And when everyone wakes up and realizes the emperor has no clothes, I mean, it'll be the time of reckoning.

I think we're in for a rude awakening. I mean, what I hope is that we can somehow remain in some form of stalemate, where like we said, this scenario, oil is high and structured until we sort of like figure out and weasel out some work around. But there's a very also plausible path where we go through massive re-escalation, price of oil moons, it breaks the economy, stocks tank, gold bids up.

George Noble (0:40)

Sam, my friend, how are you?

Sam Kovacs (0:42)

I'm very good. How are you doing, George?

George Noble (0:44)

Doing well, doing well. How's your newborn son?

Sam Kovacs (0:49)

He's doing very well. Listen, on days when crude oil is up, he's happy when it's down, he cries.

George Noble (0:55)

And how about your wife and yourself? Are you able to be happy every day despite the fact that he's perhaps not sleeping through the night entirely?

Sam Kovacs (1:05)

Yeah, I mean, it's tough, but it's a blessing. I know you also have a son, so you know what it is. It's despite the hardships on my personal levels of fatigue, it's I believe very much worth it.

George Noble (1:21)

Sounds like you're a value investor.

SPEAKER_3 (1:22)

I don't know.

Sam Kovacs (1:25)

Delayed verification, man. There you go.

George Noble (1:28)

There you go. All right. So we've done it. It's always great catching up with you. We were last on, I think, two, three weeks ago. A lot's changed. So I can't even remember where we were three weeks ago. I can't even remember where we were yesterday. The market has no institution memory one day or the next.

So whatever we believe today could be totally different tomorrow. Who the heck knows? Between all the geopolitical instability and Mr. Trump, it's an adventure every day. But so right here, right now, what's top of mind for you? What's dominating your thoughts?

Sam Kovacs (2:00)

So as you know, my portfolio is 50 percent energy. So a lot of my time and attention is going to the energy trade, which I still believe is the biggest status pitch in the book because there's still so much jaw-boning on, so much has become sort of a side, all your balls versus all your bears, and it's become sort of like sports team bravado, which creates this sort of fog of conspiracy theories. Is this true? What's true? What can we believe? Where is this thing going?

And my position on this remains very simple. It's this conflict is harder to resolve and it's taking longer to resolve than we planned. It's what I said in March. It's what I said in May. It's what I said in July. It's what I said in August, September, and now we're in October. I'm still saying it too. We ain't out of the woods yet.

The stocks have been depleted. Flows remain impaired. Risk of escalation is sky high. And I still think there's amazing opportunities to make money in the sector.

George Noble (3:06)

We've been killing it lately. You know, we put out a bunch of additional... Longs and shorts, I've lost track of it now, but you can go fight it on my feed. I think the spread is like 63% now or something like that. And that's not annualized. This is all timestamped, so the numbers are all there.

We put out a bunch of more shorts at the end of last week and early this week, in the whole tech area. Coreweave, Southside Fearloss, Oracle.

Some other names, in fairness to King Subscribers, I'm not going to put them all out here. Some are disclosed. All their positions are over two months old or on our feed, the newer ones are not. But suffice to say, the names we put out in the last week are collapsing. So when you're hot and you're hot, when you're not, you're not. We've just been killing it this year.

The sub stack has been on fire. It's more than doubled the size in the last couple of months. People really appreciate the content, unlike a lot of others, which is right. Take the bait, the yield curve or the VIC or the passive bid. If you want to make money, we're the performance guys.

Look at our numbers. Look at our numbers. Well, don't worry, we're going to have a lot of bad times too. But, you know, these are the facts. And it's our kind of a market. It's a lot of dispersion going on. It's a lot to do with both the long side and the short side. So a lot of great pitches to hit. So I couldn't be more excited about what is still coming. The other thing is we're doing a conference. I want to mention it again. October 27th, 28th, Tuesday and Wednesday 27th, 28th. A little 13 days to go. 20 of the best technicians on the street. Sean Roke, Dave Mikoski, Brian Shannon, Rick Bensignore. Just go down the list. 20 of them.