Ferg’s Finds

2026 Eye on the Market midyear energy update -Michael Cembalest

Absolutely packed with great charts… Here are a few bangers.

Loved this interview: Everything in Resources Is Cheap Rob Mullin

I’m a massive fan of “the cashflow pig…”

I’m not intellectually convinced that one-man, one-vote is the best. We practice it because that’s what the British bequeathed us, and we haven’t really found a need to challenge that. But I’m convinced, personally, that we would have a better system if we gave every man over the age of 40 who has a family two votes because he’s likely to be more careful, voting also for his children.

He is more likely to vote in a serious way than a capricious young man under 30. But we haven’t found it necessary yet. If it became necessary, we should do it. At the same time, once a person gets beyond 65, then it is a problem. Between the ages of 40 and 60 is ideal, and at 60 they should go back to one vote, but that will be difficult to arrange.

-Lee Kuan Yew, April 1994 Foreign Affairs interview

Multiples are similar to implied volatility on options: if you get direction and other variables spot on, yet get either of these two wrong (i.e., multiple contraction or vol crush), you get slaughtered regardless.

This was a good illustration of the numbers.

So, the first casualty of sustained inflation is valuations. Once you get valuations depressed, yes. The effect of inflation on nominal cash flows overwhelms any further downward pressure on valuations.

-John Hussman

You can see this with the Dow: in 1965 it sported a trailing PE of 18.1x; by 1979 the trailing PE was 6.7x.

I’m pondering how all we ever hear is EV as a percentage of sales (never fleet). When you break it down by % of fleet, EVs are currently ~7% of the global fleet, of which 2/3 are BEV, and 1/3 are PHEV; i.e. 95.4% of the global passenger fleet still has a combustion engine.

Hope you all have a great week!

Cheers,

Ferg

P.S. I’ve taken the paywall off this deep dive on Almonds with Martin Tavella of Somar Capital. It’s a fascinating little sector in which I couldn’t help but draw parallels to other cyclical sectors I’ve dug into. An almond tree takes five years to reach full maturity, leading to periods of oversupply and underinvestment, creating supply constraints, where we find ourselves today.