Recent Posts

Embark Sunday Sankey 10/17/21

Today as your Sunday treat, we attach a focus note on Embark Autonomous Trucks, as part of our thematic research on the energy transition. Extending attention into the autonomous truck sector has been a fascinating ride, quite literally when I rode in an autonomous tractor trailer hauling 26,000lbs of sand through the traffic jams of Oakland, this September just past. The thing worked amazingly, through all the challenges of modern traffic. Imagine an asset-light company […]

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4:44 PM

Morning Putin & Antero 10/14/21

Tonight: Gordon Shearer, world LNG expert, on Happy Hour 5pm ET. Email me for link paul@sankeyresearch.com Gordon fits brilliantly with the world energy crisis, discussed at length by Putin yesterday. This morning I took the time – and it took a good while, given simultaneous translation, etc – to transcribe what President Putin said at the Russia Energy Week Summit yesterday. This early morning effort was made: Because Putin is seen as holding a major […]

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9:37 AM

Parakeet Sankey 9/26/21

Jolly Sunday to you, Global energy crisis: Having written at length about this eight days ago in the note “Germany & UK vs the USA”, all week I have been reading about the global energy crisis led by the UK and Germany. Everyone makes the same points, last year cold global winter leading to low natgas storage, lack of wind in Europe, nuclear shutdowns, Asia squeeze, Russia squeeze etc. The one I talked about in […]

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2:20 PM

Homeless Sankey 9/23/21

Certain cities, like New York, London, and Paris, are an experience, like being in a movie, so strong is their identity. The same goes for San Francisco, the very name a romantic invocation of California and the Pacific, Gold Rush. The beauty of the Bay, the Golden Gate Bridge. Beautiful physically, and host to massive tech companies such as Uber and Twitter, with huge property prices, there are some major problems, the greatest of which, […]

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5:48 PM

Sunday Sankey 9/19/21

Quick Sunday Sankey today. If you want to read more, yesterday there was a long email on Europe vs US energy transition dynamics with a focus on two leaders: UK and Germany. Emailed yesterday on the web at www.sankeyresearch.com It has occurred to me that we may just enter a long, grinding, bear market, as stretched valuations and lack of new marginal buyers slowly erode the market. I mean like a 1970s multi-year market deflation. […]

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1:43 PM

Germany & Britain vs the USA

Greetings from London, You live in the UK and have avoided death by COVID? FT: In the UK, 4m households were unable to afford to adequately heat their homes even before the latest energy price crisis. Some 10,000 deaths a year are linked to living in a cold home, according to the charity National Energy Action. If that represents around 100 deaths per day over the average of four winter months, high energy prices are […]

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10:10 AM

Xi-unday Sankey 9/12/21

In this note, natgas hedging exposure (oops) and a China focus. My S&P500 sentiment Twitter survey yielded a result that is spectacularly unhelpful, lol. Pretty much 50:50 bullish/bearish. All I can say is that it seems I got the categories right, given an almost exact balance between the four choices. One observation made by a major market maker to me this past Friday was that the market absorbed a ton of paper last week, between […]

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12:25 PM

Ajay’s working

Good news and bad news at Li-Cycle – the stock is getting hurt, but there is no specific issue. Clients have asked me regarding the weakness, disappointing since the company started trading under the ticker $LICY. The questions are from top shelf investors, who seem surely to be long – clients evidently believe in this story, as we do. The personal account/discord group stuff I get tends to be around Tellurian $TELL. There, the market […]

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12:34 PM

Sunday Sankey 8/8/21

The US has negative unemployment, by one measure. The confirmation of that on Friday led to an interesting market reaction. The data point on negative unemployment released before the market was that there are 8.6 million people considered out of work in the US and nearly 10 million job openings. This could be a moot point in the EU where movement of labour is much more challenged by language and culture, but in the US, […]

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11:47 AM

Forced Labour vs First Solar

China: no Totalitarian regime has ever survived long term, much less thrived. Ex-China, just about the one remaining global totalitarian state is North Korea, which is maintained by China as a buffer. It stands in contrast to South Korea as a testimony to totalitarianism vs democracy. North Korean GDP per capita is $1,300, vs South Korea at $31,000. So the question is, when will China collapse on itself? Certainly, its demography is weak, and we […]

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9:09 AM

Sunday Sankey 7/25/21

Greetings, It is all about the presentation this week; please click on the attached file for a look at what is in store for the week ahead – earnings; OPEC chat; what to buy when US natgas prices hit $4/mmbtu, which they did this past week; factor performance disconnection; and our only solution since we wrote The Renaissance Thesis of US E&P in 2017, namely hard cash return to shareholders. These oils have to bribe […]

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12:39 PM

Travels with Eric Blair 7/18/21

They say, if you are the manager of a rock band, and the drummer comes to you and says “…I’ve been thinking…”, It’s over. Yes, with a week off in Mexico, I’ve been thinking. One thing that helped me think, I deleted the Twitter app from my iPhone. It was a great move, so that rather than only increasing the constant noise that we face covering markets, when I would instinctively check my phone, my […]

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1:32 PM

Manana Li-Cycle 7/8/21

Belated good morning from Mexico. There will be Happy Hour this evening at 5pm ET. Kathleen Kelley, OPEC expert is kindly joining, we have an invitation to another top oil market analyst pending. Register here. Registration Link: https://us02web.zoom.us/meeting/register/tZIocuuprTooG9SqNZxj9rgUjl9KZxTOEHAJ One reason I am late today, other than being on vacation, is that I just caught up with Ajay Kochhar, Founder and CEO of Lithium battery recycling play Li-Cycle that we featured a few months back. The […]

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11:52 AM

Sunday Sankey 6/20/21

Happy Father’s Day, Markets are roiling on Fed comments, and how we get off the heroin of money printing to stimulate the economy. It will be very hard, and markets clearly will not like it. We hosted Steve Levine on Happy Hour this past week, he’s excellent. He does not support my argument made on Thursday last week in the morning note, that EV adoption by consumers will be slow. He asserts that EVs will […]

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3:03 PM

Morning StEVe LEVine 6/17/21

Tonight Happy Hour 5pm we are delighted to host Steve LeVine, world battery expert and author of “Powerhouse, America, China and the Great Battery War”, editor at large, Medium, “covering the turbulence all around us, electric vehicles, batteries, social trends”. He writes for The Mobilist, and is ex-Axios, Quartz, WSJ, NYT. 5pm ET tonight, https://us02web.zoom.us/meeting/register/tZEtc-2vqz8jGtxwSq3R416BOuVoJD9v1vnE Steve and the debate that follows will allow me to finish my thematic “Electric Vehicles, not so fast”. The fact […]

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9:22 AM

Sunday Sankey 6/13/21

The note today is delayed by England vs Croatia, thankfully the currently ongoing Austria vs North Macedonia game is not imperative for me to watch.  There are some great slides in today’s presentation. For example on how solar projects do not deliver their IRR, on worrying Indian oil demand, on the global petchem balance by company, and our new mega-theme, of new young CEOs following through on our “Renaissance” theme of US E&Ps. This new […]

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2:22 PM

Friday Sankey 6/4/21

I’ve just had my vaccine, but they administered it in my leg. My Pfizer hurting. I got my first shot. I’ll get my second one as soon as I get the bartender’s attention. Why do gay people have parades in June? Because Pride comes before the Fall. What do you call an Englishman at the Euro 2021 soccer final? Referee. Surgeon: “Don’t be nervous Jeff, you should be able to handle this operation easily.” Patient: […]

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8:57 AM

Morning Sankey 5/26/21

Of course one of the most egregious aspects of Oxy’s deal for Anadarko was that a shareholder vote was deliberately avoided by CEO Vicki Hollub. This doubly bad because a preferred $10bn deal with Warren Buffett was the route taken to get a deal cash-rich enough to avoid a shareholder vote. Activist Carl Icahn took revenge by issuing warrants to all shareholders – but not to preferred Buffett – and effectively capped the Oxy share […]

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9:06 AM

Morning Sankey 5/25/21

We have Valero CEO Joe Gorder and team on Happy Hour this Thursday at 5pm. This is great timing, even if any time with Joe is good time spent. It is not so much that Memorial Day is imminent, the traditional start of driving season peak US demand, but also this week might be one of the most significant in the US oil history. We are referring to the release of the Ford F150 Lightning […]

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9:02 AM

Sunday Sankey 5/23/21

Watching Iran, but 1mb/d of oil exports are already in the market. Huge week ahead for ExxonMobil, with the Shareholder Meeting and board vote on Wednesday this week. We wrote about it on Thursday, see the note on www.sankeyresearch.com or emailed. Noted that Halliburton shareholders rejected the company’s pay proposal last week, which is encouraging. The pay of oil executives relative to shareholder returns has been an abomination for years. Executives should try a few […]

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12:19 PM

Morning Sankey 5/19/21

Quick note to highlight that Delek CEO Uzi Yemin will be on Happy Hour this week, Thursday at 5pm ET. SAVE THE DATE: Sankey Research 1st Anniversary Party for July 4th Weekend celebrating independence. July 1st in Dumbo, Brooklyn, 6pm. Please RSVP – this is a great area of New York, terrific place to visit to refresh your New York experience, right under the Brooklyn Bridge in the stunning park from which many Sankey Research […]

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8:23 AM

Friday Sankey 5/14/21

“Darling I think the new clothes drier is shrinking my clothes.” “No honey, that is caused by the fridge.” On the other side: “Does this outfit make me look fat?” “No your fat makes you look fat.” Don’t spell part backwards. It’s a trap. Our tortoise was falling in love, but now he’s only falling apart. There’s nothing I can do, it’s a turtle eclipse of the heart. Yesterday it felt like the market confirmed […]

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8:28 AM

Morning Athena 4/28/21

We’ve talked about QuantumScape, we have raved about Li-Cycle, a client asked us about Stem Inc, which is coming public through Star Peak Energy Transition SPAC (STPK), to trade as $STEM, assuming deal completion. I have requested to speak with the company, the following are my first impressions. With hearings in Washington on SPACs, we think this is a great opportunity to buy some beaten down names. We don’t think there is any major problem […]

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7:40 AM

Morning Sankey 4/27/21

One thing you get from looking at the BP and Tesla results side-by-side: BP could learn a lot from Tesla about fonts. I find the BP “rich-kindergarten-teacher” font irritating. Tesla results are beautifully presented, to my eye, distressed alloy on black. In this note, we consider Tesla decline rates briefly. That theme will be a long-term one for us, much as we have highlight decline rates in wind and solar.   Even with my begrudging […]

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8:57 AM

Sunday Sankey 4/25/21

Monster week of earnings ahead, a clash in the titanic battle of growth vs value. The forces of growth over-ran us values, but we started a fightback that saw several battles won since the terrible relative lows of August 2020. In Q1 this year, value began to rampage against growth. April has seen a growth fightback, with the US$ holding and US interest rates even rallying. I asked a market player if he was bullish […]

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1:52 PM

Morning Sankey 4/23/21

Well, it’s feedback Friday! The age-old client meeting line gets used again: Client Q: “Paul, what is the most common question that clients are asking right now?” Paul A: “What is the most common question that clients are asking you right now?” True joke, but being Friday, we are not done – here they are: Newsflash: US customs have intercepted $2m of lumber being smuggled in shipments of cocaine What do you call an anti-vax […]

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9:12 AM

Morning Sankey 4/20/21

Staring at the blinking red and green Bloomberg ticks, alone in a home office, bombarded with Bitcoin headlines, Gamestop headlines, etc etc, it had become very difficult to make out the wood from the trees regarding the oil and energy call. I went on a road trip. I’m back. As suspected, the oils and energy have been tricky – notably solar has been ugly for the past month and year to date, albeit off a […]

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8:42 AM

SPAC Alert: The Life Cycle of Li-Cycle

Looking for SPAC names, we had highlighted Quantumscape as interesting from the point of view of long-term potential. However, like so many alternative energy plays, revenues are years away from scale commercialization (a pilot project for the $19bn market cap company is due by 2023), and the company recently issued 13m shares at $64 to finance its high-cost development work (the stock fell to $47 over the next two days). We had the impression “funding […]

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7:54 AM

Morning Sankey 3/19/21

What is the highest rank in the popcorn army? Kernel. Where do you find the Andes? At the end of your Armies. Few people know that Bruce Lee had a vegan brother, Brocco. Where do DJs do their research? Wiki-wiki Wikipedia. It’s Friday! Why did oil airdrop? Probably because it was walking on air. Spot “flat” Brent prices fell 7.5% yesterday. A trading house sent this comment: “Vitol offered Brent aggressively, driving Dated lower. Shell […]

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8:41 AM

Morning Volkswagen

Volkswagen held its Power Day yesterday, an obvious head-to-head counter to Tesla’s Battery Day last September. The Tesla Battery Day will remain a memorable event for me, held outdoors under COVID conditions in California, the audience was made up of a crowd of Teslas that beeped their horns in appreciation at Elon Musk, above them on a rock concert-style stage. That was not an autonomous crowd, the beeping was operated by humans trapped inside the […]

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9:19 AM

Sunday Sankey 2/21/21

Enjoyed making the slides today, take a look. Slide 1: John Hopkins Professor expects US herd immunity by April. Remember how quickly SARS disappeared? Fingers crossed. This past week we have highlighted QuantumScape $QS the solid state battery play, and did so again Thursday, and we “found the short” as they say. The heated email from a client arrived in response with 10 minutes. “It’s a joke.” He was referring to valuation. But in this […]

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10:39 AM

Morning QuantumScape 2/18/21

Field trip. Speaking to Devon yesterday after their results, I asked to visit the company in Oklahoma, which seemed somewhat ludicrous in the circumstances. There is an energy emergency in Texas and Oklahoma, in case you have been asleep all week. However a visit is okay to go, so if any clients wish to join me on a Oklahoma/Texas run in the week of March 15th, the plan will be to get through next week’s […]

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8:26 AM

Sunday Sankey 2/7/21

Snowing again here in Brooklyn Heights. One thing that is very striking in this week’s charts is the 6-10 Day weather forecast for North America. It is freeeeezing. Bluest map I can remember publishing, and we publish it just about every week in mid-winter and high summer. As noted our Happy Hour this past week was very bullish oil, basically the call is that oil just went up 15% in a month and is rising […]

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11:32 AM

Morning Sankey 2/5/21

Max bullish oil here, buy oil leverage. That was the Happy Hour call last evening. By November last year we were saying “All in on the equities” and we ended the year with six investment grade oil stocks and six speculative oil stocks with the call: “buy both groups.” Key specifics: 2022 oil futures a bargain at $52/bbl, Oxy for operational (Brent) and financial (massive debt) leverage. MEG in Canada. Watch out for natgas exposure […]

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8:34 AM

XOM wins with $20bn loss

This was the best ExxonMobil earnings call for a decade, which is incredible to say given the company reported a $20bn loss, and its first ever annual loss. Our major frustration was not to be polled for a question, given it was worth asking about the shattered core principle of Exxon – return on capital employed (ROCE) – and the massive $19bn write-down that we finally got, more than a decade after the XTO takeover. […]

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5:34 PM

Morning Sankey 1/28/21

Quote of the day: SINGAPORE, Jan 28 (Reuters) – Shares in small Australian nickel and cobalt explorer GME Resources GME.AX jumped as much as 53% on Thursday, apparently driven by the similarity of its stock ticker code to U.S. retail investor darling GameStop GME.N. Looking forward to Happy Hour tonight! This should be a good one. As always 5pm – please register interest. Just ping me an email to join, it is a great client-only […]

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8:45 AM

Evening Ark Big Ideas

“Go placidly amid the noise and haste, and remember what truth there may be in silence…”  Desiderata* ARK Invest has published its Big Ideas for 2021, and its important to take a look. We can also take a look back at the 2017 predictions. From an investment standpoint, and shareholder returns standpoint, the fund has been staggeringly successful. Obviously by extension so have the predictions, although current zero cost of capital market conditions are perfectly […]

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6:35 PM

Morning Egregious 1/26/21

Quote of the day: “Will the SEC step in to protect Wall St from aggressive Mom & Pop traders?” – Joe Weisenthal A client who was long a lot of Concho stock for many years, bitterly opposed the company selling itself. In the context of the decision by Concho management to sell at the bottom, completely against my client/Concho shareholder’s view of best shareholder interests, the payment by ConocoPhillips of around $10m to three top […]

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8:31 AM

Sunday Sankey 1/24/21

“Does anybody in Washington care about the deficit? I mean 25% of all dollars ever printed were printed in 2020, and the total stimulus at $5trn, so far, exceeds the GDP of Germany… and Biden plans more…” I asked Frank Kelly, head of government affairs at DB, as we sat in Great Falls, just outside Washington DC, in a gastropub. We had driven past the preposterous mansions that line the road of this former farming […]

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12:33 PM

Morning Acronyms

One of the great recent charts has been the index performance of unprofitable stocks shown below. It is notable that this index has basically doubled since the last quarterly reporting season. We expect the current reporting season to underline how insane valuations have become across non-profitable sections of the market. Furthermore, quarterly results will provide full year 2020 results and some kind of outlook for 2021. Equally, for the oils, what might be good results […]

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8:40 AM
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