Porter Collins & Vincent Daniel: What Are We Doing?? | On The Tape Podcast
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On the Tape.

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welcome to the risk reversal podcast i'm dan nathan today we have a very special drop of the on the tape podcast with danny moses he sat down with his ex partners from seawolf capital vincent daniel and porter collins you also know them from the big short they discussed the recent market volatility how they are picking stocks managing risk in this environment they also talk about gold big

Bitcoin, and a whole heck of a lot more. Be sure to subscribe to the On The Tape podcast wherever you listen to podcasts. Rate, review it, share it with your friends because that's how people find it. I hope you enjoy this conversation. I certainly did.

in this episode of on the tape i welcome back my former seawolf capital partners reporter collins and vincent daniel for another edition of what are we doing and in this environment that has never been more appropriate we get into a lot you might be surprised to hear a lot of longs one of those longs is gold which in their minds is really a short proxy on the market and they give out a few gold miners they've been buying as well but

We get their current thoughts on Trump's policies, including tariffs and the proposed tax bill, and how they are navigating the noise and trading the volatility. They equate it to a Pavlovian experiment, except in this case, it's investors and not dogs. We hit Fannie and Freddie and why owning the preferred stocks in the GSEs makes the most sense.

Why the level of the 10-year yield is so important, but how Treasury can keep kicking the can with short-term T-bill issuance as a means for funding the government. Oh, and as part of the proposed tax bill, the debt ceiling rises another $4 to $5 trillion, and we deal with it again in the next Congress post-midterms elections.

They share their current thoughts on uranium and why the long trade might be back on. They revisit some of their current top picks, including Sable Offshore SOC and Golar GLNG. By the way, Phil Mickelson is a large shareholder in SOC, and Porter and Phil have been direct messaging each other. Speaking of Mickelson, we previewed the PGA Championship and the Preakness, which is the second leg of the Triple Crown. Hint, there is another Starlight horse to consider. All of that and a lot more in this episode of On the Tape, so strap in.

For those not familiar with you or your backgrounds, guys, let's start with the Olympic rower played by Hamish Linklater in the big short. Porter, give me a little background on you. Porter Collins, former partner of Danny Moses. Come on. Goldman Sachs. Just happy to be here. Little Chilton. Give the fans a little background here. Yes, I was a two-time Olympic rower. There you go. You're so modest. Now retired. Yeah.

retired. Then I did a little stint at Goldman Sachs. I started working for Steve at Chilton. Then Steve Eisman, Steve, Vinny, and I started Front Point Financial Services back in the day in 2003. We ran that through the great financial crisis to about 2011. And in 2012, the three of us donkeys started Seawolf Capital.

And here we are today. Perfect. And Vinny, you helped launch Jeremy Strong's career, obviously, as he portrayed you in the big screen. Well, he did movies before us, but I'll take credit for it, I guess. I don't think the judge counts with Robert Duvall, but anyway. That's the one I was thinking about, the judge. He was really good in The Judge, by the way. So Vinny, we met in the mid-90s at Oppenheimer when you worked with Steve and Meredith Whitney. A little background for the people on your auditing and specialty finance background here.

Sure. So I prior to working with Danny at Oppenheimer and Danny was on the sales desk and I was a junior research analyst. My first job was an auditor at Arthur Anderson. If anybody remembers that name got taken down by Emron. I'm curious, Vinny, did they audit the NBA draft last night? Because that was amazing.

I was debating what was more audited, the NBA draft or today's CPI data. Interesting. And it's probably pretty damn close. Doctor, doctor, can't you see I'm burning? All right, keep going. Well, Thompson's went into action. After doing two years of audit and got my CPA, Danny and I worked on the sales side. And then we all sort of joined forces a few years later at Front Point.

working for a hedge fund with Steve Eisman and the whole big short thing and the like. And Porter and I now are just managing our own money. Porter likes to say he's retired. I like to say I'm an out of work hairdresser. Your hair looks great, by the way. Thank you.

if anyone gets that reference. But we're just at it and enjoying managing our money and navigating through markets. All right. So I was going to start with that. So we're going to get to the landscape, obviously, in the markets right now. But we talk about this all the time. It must be great right now to not be managing other people's money in this type of market and volatility. I imagine it kind of changes your mindset if you have

you know, duration of capital and not have to worry about writing the quarterly letter or having like we would have calls sometimes weekly at Seawolf when there's a lot of volatility. So talk to that and how that changes the way that you kind of manage money and think about things. For the first time in a while, I said to Vinny,

I wouldn't mind managing some money when the drawdown happens, right? Like I love it when markets are down because your favorite positions, they go on sale, right? And you get a chance to buy them. And I think you have to have that mentality of when markets do go down, hey, what's on sale? What can I do? I had an old boss a long time ago that said, you always got to upgrade your portfolio on sell-offs, figure out,

What's cheap out there? You know, right now, I actually think that it's one of the better stock picking times because kind of like what happened in COVID. I like to use the analogy of a glass jar of marbles and they just smashed it on the floor. Trump did something similar with the liberation day. And, you know, I don't think most professional people we talk to, most retail people we talk to are confused as hell. And so, yeah,

And perversely, I think that's a for us an environment for a higher gross, more shorts, more longs, more stock picking, more differentiation. And I see it all over the place. And I still think that flows are so dominant that.

value hasn't sorted out yet, if that makes any sense, right? It's just right now, everything is just flows and proper value hasn't been ascribed to a lot of securities. It is amazing that even during the drawdown post-liberation day, that retail flows stayed pretty consistent.

on the way in. And so certainly it's worth noting, right? It takes a lot to kind of break this market and the flows. So Vinnie Porter obviously just made a comment. It's a decent stock picking environment. I agree. I think you need to be patient at times and know that the themes and thesis might not play out immediately. Talk about kind of upgrading their portfolio. I always talk about when the market swings up like this, be honest with yourself and unload some crap.

And when the market trades down, take advantage of it and buy the stuff that you know from bottom up. So how do you see that environment? And I would add to that, Vinny, since you're kind of the specialty finance guy, in such a financialized economy globally in the U.S., how you incorporate that into your thought process?

Well, in many respects, I agree with everything you guys are saying in terms of upgrading the portfolio and the like. But you have to keep in mind, and I think we just saw it over the last two, three weeks after Liberation Day, how financialized we are. We joke around and say almost every single major drawdown in stocks is

is now followed by a V-shaped recovery. Now, why is that the case? Historically, that hasn't been the case in our careers, but it has been over the last 10 to 14 years. And I think it's a function of the fact that when you are so financialized and liquidity is so important to the markets, and more than ever, I think, in the history of our country, or at least it's close, I don't want to sound like Trump in saying, but

we are now more reliant on the wealth that resides in publicly traded equities than ever before in our lives. So to quote Luke Grohman, who you've had on your podcast, it is a matter of national security that

the mag seven or the larger, the 20 largest market capitalization names can't go down because if they do, it's going to have a sizable impact on the economy. So I'm not surprised and we could get, get into what we think has happened and what is happening now. I'm not surprised. I can't say we took advantage of it. We tend to be too bearish to do so, but I'm not surprised that the liquidity was injected in some way, shape, form, or fashion, whether it was narrative, the narrative that created liquidity that got,

the mix down, they made the markets go up because they had no choice. They had to do it. Now we sit at an interesting place where markets are overall. But nevertheless, it's something I think about all the time in terms of how important markets are

So keep your bearish tendencies. I think Druckenmiller said this. He tends to run bearish more than not, but he keeps his tendencies in the closet. And I think we try to do that as well and express it in different ways. So we've all been fortunate. You mentioned Luke Groman here. We've been fortunate over the years to kind of build a community that consists of, and this is your words, Vinny, the land of misfit toys that are brilliant, deep thinkers, that things seem to matter for days at a time, sometimes an hour at a time, and then it's

quickly mitigated by to your point Vinny just flows or change in policy um let's talk about that Porter it feels like we're just kind of treating the sickness a little bit here and not really curing it to a degree how do you kind of Bob and weave through that I know you mentioned kind of upgrading your portfolio but how do you think about that and you're really good at kind of putting politics aside and just trade whatever's on the field so I love your thoughts there

Well, I think Vinny and I turned to each other about three weeks ago and we said, are they really just going to V the market again? Like just, it was a V bottom, it's over, whatever. And so we've been joking around or I've been joking around about

Pavlov's dogs, right? Where he kept on ringing the bell and they'd salivate, the dogs would salivate every time that the bell rings. Well, about three weeks ago, we said, well, Trump and Besant have found the buzzer and they just hit the algos with a trade deal coming, we're going to buy stocks, buy Teslas, all this stuff. And so

I think that they realized they pivoted hard, right? They went in for this big tariff thing. Markets crashed, bonds crashed, dollar crashed. And Trump said, I got to pivot. And I think we all said that last time we were together, said like, this can't last. It has to pivot. And he pivoted on everything. He basically caved on everything he had.

and so which is fine it's just it was sort of a policy error i think and we can all agree on on on that and how we did it execution wise so i i give trump credit in being a chameleon right he's now pivoted hard to you know he doesn't talk about doge elon's in the closet somewhere and now they're talking about you know health care and a big beautiful tax bill right which includes

$4 trillion of debt ceiling relief. So we're clearly not in a, we've pivoted from getting the deficit down to getting the deficit up and the stock market up.

So let's talk about those issues. So let's talk about tariffs and whatever resolution, 90-day pause here, 90-day there. We're still looking at a 30% tariff from China here on imports. So that's going to be a big deal. And I think we're getting caught up a little bit in the euphoria of there just being not 145%, which I think we all said was not possible. It wasn't going to happen. And the people that did say, oh, no, work is waiting for the economy, didn't know what they were talking about. So we're going to have some aftershocks from that. The

question, Vinny, is does the market look past that at this point and say, oh, that's a Q2 event we'll absorb? Or will the reality start to set in that some of these policies were just nonsensical and they are going to have lasting impacts on the behavior of U.S. consumers and U.S. businesses? I think the market will look past that. And simply being, I think they've concluded, perhaps rightfully so, the market is that

Hey, look, if the markets get wobbly again, he'll change his mind and 30 will become 20 and 20 will become 10. And eventually everyone feels at least people, the talking heads out there, and I'm not, I think they're right, is that he eventually wants 10% across the board tariffs. So that's where we're probably going. Maybe a little bit more elevated for China, but I think the market is correctly saying

He's caved once, he's caved twice, he'll cave again. So why am I worried about 30% tariffs? The minute it becomes a problem, 30 will become 10. I'm not saying I agree or disagree with it. It's just what the market's saying. So to me, so to me,

I think they're going to look through it. I think they're going to assume, perhaps rightfully so, we'll see, that we will have a resurgence of the supply chains working again, which will have an interesting impact on the price of energy and other things, but nevertheless. But you will start to see, as Porter was saying, a return to what was going to be the initial Trump growth policies, right? Which was deregulation.

pro-growth, energy as an export. All those things that he was talking about pre-tariffs, I think come back into the forefront. The question we keep asking ourselves is at S&P, where it is right now, which I think, what is it? Three or 4% across the all-time high or 22 to 23 times earnings. How much is priced in? And quite frankly,

We don't really care simply because we're not market timers. In fact, we're probably the worst market timers in the game. But we think about it more from a thematic perspective on a sector by sector basis and a company by company basis. So let's get into those sectors, Porter. I just want to say one thing to Vinny's comment on kind of 22 to 23 times earnings again on what will be, I think, earnings coming down at least to

temporarily, I'm of the belief that we're going to lose at least some premium on the U.S. markets given this inconsistent policy. At the end of the day, you know, Trump was playing 2-7 offsuit, got called and obviously folded here. And if anything, it sends a message to foreign countries that, hey, he's just kidding. He's not going to do anything because he knows it hurts them more than us. So back to that end and let's talk about kind of how you're thinking about that, Porter. So

I think that, you know, if you take our 08 mindset of, you know, there was a, you know, the consumer was over levered. There was a debt problem and everything crashed. I think that post 08, everything moved to the sovereign. Right. So the heavily indebted assets around the world are the governments. Right. China's super over levered.

indebted, US, France, all of Europe, right? And so if you think about it that way,

The sovereign can get out of a problem in a different way. They can just print money, right? You and I or everybody else in the 08 problem couldn't print money, right? But when it's a sovereign problem, they can print money. And I think that you're kind of seeing that and the money supply growth is off the charts right now. And you're sort of in this

debasement inflationary world, right? I know CPI and whatever side, but you're an asset inflated market. And everyone who was saying, there was a lot of talk about how this is the end of the dollar, the end of US exceptionalism, whatever. But you talk about

currency and the dollar going down. Well, one thing it's going down against is gold and the yuan and every other currency around the world is going down against gold. And that is the real neutral reserve asset. And that's how I think the three of us have thought about it for quite some time. And I know the three of us have been long gold since 2015 and 16.

And, you know, that is the true neutral reserve asset around the world. And it's, it's shown it's, um, it's shown itself of, I think over the past year and, um,

you know, we continue to believe in it and, you know, we've done had a good year so far because the, you know, a lot of the gold miners are up plus 30% and that's, that's, you know, obviously pretty good for a big chunk of our, of our portfolio. It's gold is coming through a little bit of a, a washing machine overbought now and people, we,

Ben and I were laughing. People believe in the world again today. And so gold and silver aren't doing as well. Well, let's get into the gold trade here. And we're really talking about what is a kind of mid $20 trillion type asset that's obviously here to stay. And to your point,

porter call it lifo kind of last in first out on the people that bought gold at 3300 at 3500 and they're now all of a sudden experts on it saying well it doesn't work and i would add to that that bitcoin actually has been outperforming gold over the last few weeks it's kind of interesting to me that never existed before in any crisis but i push back to you port a little bit i think there has been a degrading of american exceptionalism i think there has been a slight

degrading of the us dollar just in standing whether we can earn that back over time we'll see it has to i don't agree with that penny i don't disagree with that i don't disagree i don't disagree with that i just you know right so to your point and vinnie i'll turn to you on this

It doesn't take a lot if you just kind of replace or instead of, to your point, using S&P puts to express bearishness and all those points about American exceptionalism, it's owning gold. And whether gold trades down or not, it feels like it's on a path to move much higher over time. So you mentioned before, you guys, kind of the miners that you've played before. So how are you expressing the gold trade and what are your thoughts on it? One of the things we've done recently is...

make an assumption that gold prices will remain where they are if not elevated. And once you do that and you roll it through your models,

I think I said on a prior podcast with maybe it was with Dan and Guy that at these prices, and as I said, it's so easy a caveman can do it, that the spread between the spot price and your overall costs, your ASIC and your cash costs to extract stuff out of the ground, the spread is so high that some of the laggards should catch up. So we started searching for the laggards.

We stumbled on Core CDE, which we own through Silvercrest. We stumbled on Dundee Precious Metals, tickers DPM. And the reason why we chose these two is aside from the fact that we spoke to management at CDE,

They were trading at four to five times EVD EBITDA. So once you see the valuation, then you start to actually do your work to see, are they credible? Do your friends who are ninjas in the mining space, are you barking up their own tree? So we started going down quality, so to speak, making the assumption that the bull market associated with gold over the long term.

will continue. And while I respect the choppiness and Lord knows it can last for a little bit longer because as Porter said, people believe in the world. At the end of the day, I don't know how we get out of this without the basement. I just, I can't, the math, the logic doesn't make sense. And while there was, let's call it a two month effort to think that you can contain government costs via Doge and everything else,

As Porter said, we put that in the closet and this big, beautiful bill. I'm fairly certain that that government expenditures are going to go up. And quite frankly, I think Trump is looking for places to find tax cuts for various different parts of our country. So when you think about that.

how do you solve the equation? It's debasement, which eventually leads to gold and perhaps Bitcoin as well. And we own some Bitcoin as well. - Yeah, we did actually buy Bitcoin at the bottom. We trade Bitcoin more than we do gold. Gold we've just held, but Bitcoin at the bottom, we sort of, you know, when Liberation Day, that's one of the things we did pick up. - As Vinny says, I think we'll call it CLAS as an acronym, you know, Crypto Lobby.

as a service or something, Vinny, I think what you were saying before. But let's talk about the tax bill and about, I think the most important thing, Porter, you already highlighted is kind of the $4 to $5 trillion movement up in the debt ceiling from where it currently stands and the whole idea of kicking the can down the road. And we'll get something done and it'll take years to prove whether or not it was accretive to the US government or it kind of hurt the budget. So

How are you playing that? And are there certain segments within it, whether it's housing as it relates to SALT and the exemption going up from $10,000, being able to deduct state and local taxes and up to $30,000?

Well, Danny, it's kind of like our Michael Cohen story about kick the can. Yeah. Kick the can. Kick the can. I can't believe you kicked the can. Yeah. We were short this stock. I think it was Khan at the time. And one of the quarters they put out and they kicked the can and they didn't recognize they had a credit problem. And he comes to us like, I can't believe they kicked the can. There's actually a great line from Twilight Zone, the movie, but I'm too old. I'm

dating myself about getting the old people and playing and they come out and play kick the can in the twilight zone it certainly feels a little bit like the twilight zone but tell me how you're looking at these things by sector you you can't play everything within it but what you think is the most certain thing that you can take away from it if it does end up passing as we've seen kind of with the language quite frankly a lot of this has not initially worked in the beginning you know the first few months of the year is

Just go long-term policies, generally speaking. And part of his policies, as we said, is, I mean, grift.

seems to be maybe it's just more out in the open relative to what it has been in the past, but it just really seems to be quite elevated. So if you think about going long term policies, right? And the most important thing is you've got to keep your political biases aside because it's not really going to help you. So as I mentioned, a few things don't get upset at me. One is long immigration reform, right? The one thing I know he's fairly certain of is he wants to control immigration.

be long deregulation themes, right? So when immigration reform, the names that pop out for us is GEO, which had a tough quarter, but all of what is the fundamentals are intact and are on the come. So as we said, as we look towards names where nothing really has changed, but the stock is down, we're looking to add on that, not subtract.

um we're allowing the gses still um which is a combination of grift and of the belief that they will eventually be privatized it's not imminent but it's probably coming over the next say six months to a year i'll just attack on that one there's not many uh things out there that trump can take a massive win on it's a three to four hundred billion dollar gain that he can take on the fannie and freddie

equity. So we think he uses that to fund his sovereign wealth fund or whatever. And so I just think that like their Ukraine

you know, metals deal. They'll do something with the Fannie and Freddie. Well, don't just, you can't just gloss over Fannie and Freddie, which I don't believe is part of the tax bill, but to your point, it's another point they can make that can be kind of budget positive or current account positive. So let's talk about Fannie and Freddie. You guys have been, Vinnie really is, is an expert in it. And you understand the dynamic of it and you guys understand the political nature of it. So give me your thoughts there. I know people want to hear it.

Well, the hardest part to reconcile is the political nature, because for whatever reason, these two names still represent third rail politics. I guess the beauty for the GSEs is that you have and to be fair, you had this in Trump 1.0, but you really have it in Trump 2.0 now is a president that doesn't really seem to give a shit about third rail politics. And so as a result, and more importantly,

He, again, listen to what he says and what he wants. He fancies having a sovereign wealth fund. I don't know how a country that's 37 trillion in debt

And with fiscal deficits and current account deficits creates a sovereign wealth fund, but that's what he wants. So that's what he's going to get. And one of his assets is Fannie and Freddie. Now on a fundamental basis, I mean, these things are, are gorgeous assets. They are regulated duopoly of providing credit insurance to the mortgage business, uh,

where they have, and don't quote me exactly on this, but 60 to 70% market share in the mortgage business providing credit insurance for 30-year guaranteed product. Fannie spits out around $15 to $17 billion of net income per year. And regardless of whether I think or I don't, whether I care or not care, whether these things should be privatized or not, there's a high probability that they will do so.

And the preferreds right now, the junior preferreds to be specific, are trading a 50 cents on the dollar. That seems like a really good risk reward to take. That is long term policies, long grift with valuation on our side.

So Bethany McLean was on the podcast last week and she agrees with you that what they've done to Fannie and Freddie is ridiculous in terms of siphoning off the profits above and beyond what was ever intended.

Porter, the follow on of that, obviously, and Vinny, I think the implied guarantee will still be there. Maybe it's in the form of still they're paying some type of G fee. Right. Which I think is what you call which they'll be paying. So they'll solve for that. Porter, is that enough, you think, to keep kind of mortgage rates down or you think there'll be a perceived notion that it's, quote, a little bit riskier being on their own? I think a bigger picture of this is they need rates down.

Right. The best it needs 10 year treasury rates down and 10 year treasury again this morning is higher. You know, we're looking at 250 10 year again after a benign CPI print. Yeah. Yeah. I think it's a real problem. And so what do they do? They're going to do something right. Whether it's SLR and a friend of mine was talking to me yesterday about maybe there is Social Security reform and they do a

you know, change the defined benefit structure where they can, you know, you can direct your own trades. And a lot of that probably go towards buying 10 years, right? So you have, you need a way for the retail and American investor to buy treasuries because none of us are buying treasuries. - Isn't that, isn't that technically a leveraged trade? You're getting paid by the US treasury and then you're buying US treasuries. I hear what you're saying, but in philosophically speaking, yeah.

But they're going to have to find a way to get more buyers of treasuries. Right. And so, like, I just think that the playbook is very open right now, whether it's changing the SLR requirements for the banks or

they have a lot of debt to refinance and the rates aren't going down. It's a real problem. - For people out there, the SLR, supplementary leverage ratio, which is what the banks are required capital to hold treasuries. For some reason, the risk weighting has been way too penal. We know that's an arrow in the quiver that they can pull out.

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With this risk on trade, you sell treasuries, they go to a certain level. Vinny, what do you think the level is? It's kind of people are programmed towards 5% and then at 5% is when people are like, because it is such a financialized economy. So I will argue, though, Porter, and counter that as U.S. Treasury yields have moved higher here in the last few days,

credit spreads have actually tightened. It was actually the opposite of what we saw when US treasury yields were coming in and there was a rally in treasury from a risk off perspective and credit spreads were actually widening. So Vinny, what point- - That makes sense, Danny. - What's that? - That makes complete sense in the context of- - Of risk on, risk off. I agree. - Risk on, more pro-growth,

But this brings up my point about term premium versus safety. So Vinny, let's talk about from the funding of the government perspective, you just touched on 37 trillion, eight to nine trillion needs to be refunded. I don't know what's left of that this year at this point. Raise the debt ceiling four trillion. GDP does okay, or it's up a couple percent. Your debt to GDP goes higher. When does that matter? And this goes back to kind of the gold theme. I know the answer.

But Vinny, what are your thoughts? Because you deal in specialty finance. You deal with U.S. consumers. There's a level where it really matters. Well, I think it's already mattering, Danny, in many respects. The issue is the thirst for yield of institutional and retail investors is so high that flows keep coming in to these structured credit funds. And these people continue to invest, regardless of whether the incoming credit quality concerns are starting to disturb them or not.

I personally think, I mean, this sounds very cliche, you already said it, but I think five o'clock, five percent or close to five percent really starts to get people's attention and the sensitivities associated with the incremental funding. Now,

I know we have a large funding cliff that's coming. However, a good portion of that funding cliff is in T-bills right now, and it will continue to be in T-bills. So many people will disregard how much funding is coming. But the one thing I will say,

Besson talked a good, tough game about how Yellen screwed up about issuing T-bills in lieu of long-duration funding. And he's doing the exact same thing. Well, why is he doing the exact same thing? Because we can't afford or

or can issue long-term debt at these prices. Or if you put out a calendar issuance of massive long-term debt, funding with all else being equal would probably blow out. So the one thing that they have yet to solve for in this Trump 2.0 economic pivot is what to do with rates. And I

I'm assuming we're going to see a heck of a lot more theatricality and deception. Stuff where, well, SLR being one of them, buying back older dated debt, pulling down the TGA, like all these, and hopefully trying to get a bargain or a trade agreement with some country that will buy our debt at significantly lower yields than where they probably should be.

And one thing I want to say is that, to sum this up, thank God Vinny and I changed, or shifted our bearishness from shorting stocks somewhere along the last decade to owning gold as a contra asset, right? Gold is completely uncorrelated or negatively correlated to the S&P. And we can own the gold and gold miner stocks and...

you know have an uncorrelated asset in the portfolio you can you can you can put together a portfolio that has it as you know uncorrelated characteristics to itself rather than just owning tech

Right. Which is, you know, and beta one way. And so, you know, thankfully, we have a portfolio that has a bit of longs in beta and then a bit of longs in anti-beta, whether it's, you know, Philip Morris has acted really well for us this year. You know, gold has acted, you know, and gold miners have acted very well. Bitcoin has acted actually as a little bit of an uncorrelated asset this year, too. So.

so let's get into some of those names so one name that kind of has a lot of the stuff that we've been talking about is sable offshore symbol soc special situation really within the energy sector got hit just on the market sell-off i always say it's a small cap names you can take advantage of and this stock is up 50 percent in the last few weeks just give an idea it's a little bit regulatory it's a little bit company specific let's talk about sable offshore porter you guys have been pretty outspoken on it and then moving to some other names in your portfolio

you know we've been ever laughing we're going through our portfolio and looking at the weightings of what we have our biggest waiting is an energy which is uh probably the most out of consensus thing imaginable in this uh on this planet and so obviously a lot of it is dominated by uh sable which is a uh

Right now, I think it's more of a legislative special sit, but they're closer to pumping oil. And so we've been very close to this position for quite some time.

And they're navigating politics in California, which is very difficult to be able to finally pump oil off the platform and through their pipelines. And so we think that's the case. And we think it's going to $40 plus, call it 28 today. So that's been a good one for us. Golar has been a, which is sort of an LNG platform.

uh, play for us, um, that we've owned for a long time. That's a big position for us as well. Uh, and Petrobras is another, you know, cheap oil name, three times EVD Bada that we've, we've kind of held in there. I mean, energy has been a tough place to own. And so to having your largest sector being energy and beating the market this year is kind of a, uh,

I don't know what to make of it. It's a miracle. I mean, there's nothing more powerful than being involved in a sector that is the most underweighted in the entire S&P by fund managers, that has high levels of short interest, that doesn't pay attention to fundamentals, just quote oil prices. It was waiting. And so people think that we're bearish all the time. That is the most powerful long combination. So Vinny, on the energy complex,

um which i've been long also and i really expressed it through a little bit of soc thank you guys and exxon mobil you talk about if people really believe that we're going to be okay uh we're not going to go into recession the industrials and energy are two areas i think you've been focused on talk about those if you could people always ask us whether you're bullish or bearish what do you think of the s p i don't have an answer for them um however i when people ask me this i throw questions at them uh and say well

Are you bullish? And they're like, yes, I believe Trump through this tariff relief is going to create an economic spark and the like. I was like, well, if that's the case, why don't you own energy? Right. Because none of this is going to happen without an increase in energy consumption somehow, some way.

So the other thing that we've done recently, - And they answer, "No, I just want to own the Mag7." - Yeah, and they said, "No, Vinny, that's great. What do you think of Palantir?" And I'm like, "I don't think about Palantir." And so I just walk away. The other thing we've been buying lately and started adding, like post-liberation day was uranium. We reduced our exposures, I'm gonna say about nine months ago, 12 months ago, six months ago.

I can't say the reason why other than the fact that it was very overbought. And I think Kimco made a gambit to ensure that spot prices of uranium went down because they were short. You know, fast forward to today that spot prices have gone from 105 to at the time 64, 65. And I believe that.

Trump's energy policy is more about energy security and creating an export machine than it is about what he says every day, which is drill, baby, drill. And

I know his Silicon Valley tech bros love uranium as a source of energy for data centers and the like. So the fact that I think the cleanest energy source and the most reliable energy source, which was down a significant amount, made for a really decent investment on the upsurge. And if you give me a second, talk about our process, right? Because at heart, our sandbox has been financial services, guys.

So we've had to teach ourselves other industries, which has been a heck of a lot of fun to do so. And we wanted to do it on our own dime because who the hell knew whether it was going to work or not? Part of our process that we do all the time is when we're going into a new industry or an industry we don't know as well, but invested in it. The first thing we do is call experts like ourselves.

in other sectors and friends of ours. And the reason why we do that is because they know so much more than we do. And then from there, we could take what they say and provide an objective lens as to what they said and try to apply our capital accordingly. The other thing is, in this sell-off, another example of a name that we were looking at a lot of these offshore

services companies, the Tidewaters and the Nobles. And these stocks have gotten killed. I mean, they're down 60%, 70% from their highs. And on Liberation Day, they take another 20% plunge. And we look at it, re-underwrite...

you know look at the cash flows and say hey you know is this business going to be around and and you know in another industry where it's seen mass consolidation you know one or two three players left and you know we can buy in at you know three to four times you know enterprise value and we say you know i think it's worth a swing and it actually worked out pretty well for us and so trying to find it's a four letter word trying to find value

in a world that's, you know, in a world of stocks that's really hated. I think that's how we feel good rather than just buying the market, right? Buying the Qs or buying whatever. So that's how we think about things. Yeah, I called you, Porter, a couple of weeks ago because under the assumption that we would pull back these ridiculous tariffs with China, I was looking at the shipping stocks and we mentioned Zim on the phone to each other. I think the stock was like 11 or 12 bucks. And I just wanted to check my sanity at the time. And I called you, I go, Porter, you go, yep.

And that was enough for me. I know you guys involved in Zim here because one of the casualties or good for them, bad for the consumers, that shipping costs are going to go up dramatically here when everyone now wants to move everything. So is that transitory or how do you think about Zim as a trading vehicle?

You know, it's a funny stock because it's probably been our biggest gainer since we've been around. We bought the stock when it IPO'd and it broke IPO price to went to eight. And then I think with dividends, it went to 120. And so we roughly sold it and bought it back.

again at four and and wrote it to 28 and so post-liberation day that was another stock we we picked up and we and you think about you know it looks a lot like covid where um

where it goes dry for a little while and now everyone's going to be like, oh, we got a ship. And so rates are going to come back. And so, yes, that's another one we picked up and sort of at the bottom. It wasn't, you know, buy low, sell high, you know, buy hate, you know. Buy with fear. Buy fear, you know, sell euphoria. And so that's how we think about it, right? We love doing that. It just makes us happy. Yeah.

All right, guys. So we went through a lot there. Let's get to some fun stuff now. We got the PGA and the Preakness here coming. I'm sure you haven't handicapped or looked at the Preakness. I'll just get that out of the way saying there is another Starlight horse running. It's the one horse goal oriented. So I run twice. It's won twice. It's fresh. I love it.

at 6-1. And I did love Citizen Bull, the one horse in the derby, but you know that I picked the 18 separately because I thought it was the best horse. I actually think the goal-oriented is going to win this. I assume you have no comments on the Preakness, even though your fondness for the city of Baltimore, Porter. No, I have no comments on the Preakness, but I do have a PGA. Yeah, go ahead, Vinny. Oh, yeah, I know where you're going. I was just going to say on the Preakness, sticking with our process, when we don't know anything or much about

that we outsource it to the experts. So we call you. There you go. Well, you know, I'm a big believer in not looking at odds versus horses six to one. That's why I think it's a great bet. Whether it wins or not, you got, you know, the favorite six to five second choice, kind of two, three to one. I go for value. Like we all do. All right. PGA. We used to do golf stuff all the time with each other. I can't wait to hear the thoughts here. Cause I have some thoughts on this. This is so, if I'd be shocked, if I don't know where he's going, it's so jaded and subjective. It's gorgeous.

Well, no, it's just simple. There's no bigger SOC bull than Phil Mickelson.

So, and I've been, I actually got a chance to direct message Phil on Twitter about Sable a little bit. And so I'm a big Phil Mickelson fan these days. Yeah, I know he's a lefty, so very close to you. Yeah, I have my Masters sign up here. Danny from one lefty to another, Phil Mickelson. You know, this guy when he first won the map. I got my signed, I have my signed Mickelson jersey, Chaminade Mickelson jersey that belongs in Tom Healy's jersey.

house but won't take it and it belongs in hebel's house and he won't take it either sorry i know that's inside bayport zero zero i know this is zero but chance of winning this thing justin thomas at 16 to 1

you know you can't take McElroy and shuffler at like three and a half and four and a half to one they might win it where McElroy's won to that course so many times I'm sure that's probably what but Justin Thomas 16-1 didn't JT didn't JT play well last week well yes and he won the PGA on this course so he's not only is the plane when that was 2017 I can't believe it's been eight years since that first time but he's playing as well as he did back then if not better so I'm gonna ride

Justin Thomas again for value. So I don't know what you guys, other than your Mickelson. My JT was my pick. As you could see, I've been spending time more time watching the Knicks and the Mets than actually studying the PGA right now. But JT was my pick for, for the better part of 10, you know, 15 years, we ran a snake draft on every major golf major where we would, we would pick, you know, four golfers, four golfers. Yeah.

By the way, we didn't touch on sports gambling, which I think we should touch on this. Kalshi stuff, you know, continues to be kind of a fly in the ointment for DraftKings and FanDuel, even though they've powered through them. Quarter was okay for DraftKings. Missed slightly. You're talking about 20 million miss on multi-billion, but...

It is an amazing issue. You talk about the grift, Vinny, Kalshi's connections into Washington. It continues. It doesn't matter yet, but to me, it is certainly an issue going forward. I know you guys probably aren't trading a lot in the sector. As you guys know, I've been long Genius Sports, GE&I. It's somewhat independent from that to a degree, but are you guys doing anything in the online gambling space?

Well, the problem is with the three of us and being parents, we've jaded our kids tremendously. And so my son comes to me last night. He goes, Dad, Sheldon Adelson owns the Mavs now, and he really wants gambling to go through in Texas. And of course, they're going to get the number one lottery pick. Bang. You could have gotten great odds on that. By the way, he passed away, but Miriam is running the show now. But yes. But yes. I mean, seriously?

unexplainable Luca goes to LA and blah, blah, why are you doing that? And bang, you get the number one pick. Come on. And what was it? Ernst and young. I think that rolled out the, they rolled out the pieces of paper, not even the spinning fake lottery thing. No, when Ewing and Ewing in the Knicks was the last one that was fixed like this. I mean, I'm not a conspiracy theorist per se, but I wasn't the only person when they saw like, what do you mean? You're not conspiracy. I can tell you this. When I saw there was four teams remaining, that could be number one. I would have bet.

a zillion dollars at that point. Well, yeah. If you could, if someone would have given you odds that you could have gotten it somewhere. That's the beauty of this world. We'll live some crazy. Luca goes to the Lakers.

I mean, in the crazy training. Anthony Davis, right. So I know you're Knicks and Mets. Blue and orange is probably two-thirds of your wardrobe at this point. You're having a nice little run, Vinny. I'm very concerned that there's a moment coming here, certainly for one of the two teams, but particularly the Mets as we move forward. It's very hard to be a Mets fan.

Because you know, all our Yankee fans are making fun of us. Like, oh, great start. You should just, World Series, you just write it in. And so they're trying to jinx us because they know the Mets, eventually something happens. Windor goes down. Soto breaks an ankle. Like something happened. Vinny, how great is it that you guys have welcomed Porter years ago into the Mets?

group I mean to have a guy like Porter as a Met fan how many porters are met fans Vinnie like really met fan one one yeah one one him how many of my people are are uh Jet fans too well that you're a value guy you just like you just like Bane but but like I respectfully I disagree on the Mets with you guys I'm not saying bad can't happen but of course it can we have a great owner

Period. Like, like I don't worry about them anymore because it's not like the Wilpon something's going to go wrong and there's going to be an eight year abyss. I can't have the same conversation about the Jets. It's to the point where even if they're doing everything correctly, I still think they're going to lose. Right. And I do think they're doing everything correctly. And the Knicks, I mean, I'm just enjoying the ride. None of us thought we were going to beat Boston. Nobody. I'd love to see.

I think it would be great for basketball to have a Knicks Pacers. That brings back the Reggie Miller days. Well, guys, we'll be back. You guys will be back on the tape, I'm sure, while it's probably still, obviously, it'll still be baseball season. We'll be getting into football season. We'll talk about that then. We'll have probably another major around that time. I'm thinking around sometime around the Open over in Ireland this year. But, guys, I can't thank you enough for coming on for another episode of What Are We Doing?

Great to hear your thoughts. And I will see you in person soon. Thanks for having me. Thanks, Danny. Thanks for listening to the On The Tape podcast with Danny Moses. If you like what you heard, please subscribe on either Apple or Spotify to the weekly podcast. And please leave a rating and review, positive only. You can also watch on the On The Tape channel on YouTube and give us a thumbs up there as well.