Non AI hot take

Investment Analysis Clubs Where Angels Fear to Tread
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I’m really doing this to test the theory, so bear with me.

Thesis: current oil crisis going to take awhile to resolve. And Shale Operators moonshot if oil goes over 120 for awhile.

See 2008 crisis and 2022 crisis for rough idea of upside. Overall, I don’t see Iranians suddenly bending at the knee for DJT or Bibi. Or a TACO trade to end all TACO trades, DJT walks away and somehow miraculously the iranians go back to business as usual in the strait. If, in fact those do NOT happen and we continue to slog our way through this, or if hegseth says screw it and bombs their infrastructure (probably most likely honestly)… Either way, oil prices :rocket: :rocket: :rocket:

Kalshi markets have over a 50% chance of oil over 130, and 48% over 140 by end of the year. Over 75/barrel and shale coooooooks. But they need some time to lever up, and that would mean some introspection and long term thinking from this administration, which I don’t believe has happened in this reign or their prior reign. Either DJT says, '“hey shale, buckle up” or shale producers themselves anticipate it happening, which might be a big bet on their part. I could see not all shale producers making this type of yolo bet.

I’m anticipating a market drop or stagnation for awhile, and assume there will a few turmoil inducing events I nthe coming months. As such, I might trim positions and go 5-10% shale as a hedge.

I’m looking at Devon energy. Maybe PR or FANG. Happy to hear others thoughts though.

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I didn’t play it, but I remember watching HAL during covid. And if I look back, HAL took off Dec 2008.

Oil is definitely not my forte, but just throwing HAL out there for feedback, as it seems to move wildly over the years.

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Kalshi is one thing, but what do the actual oil futures markets show? Anyone who is so “bullish” on Kalshi can simply sell the Kalshi contracts and buy the actual futures contracts (or associated options, of course) in roughly equal amounts and make out very well on the arbitrage.

* In practice this won’t happen because Kalshi is:

  1. Sometimes unreliable and may find a loophole to not pay you in the end.
  2. Likely not enough volume from people on the other side to place your bet.
  3. General custody of funds issues (with regular market options, when you sell an option on a futures contract, YOU get to hold the cash in your own account, no issues of liquidity of the other side.)