After gaining 71%, this investor has just got out of oil and is instead putting everything into this commodity

Wednesday brought some (more) dire news on the energy front with a warning to US households to expect higher heating bills this winter as supply and demand battles in Europe and Asia become a permanent fixture.

And just as the world is trying to get greener, the scarcity has led to the revenge of fossil fuels and contributed to the CL00 crude oil. to advance
up nearly 70% this year, sparking some bullish calls on Wall Street, with Goldman Sachs talking about a multi-year commodity super cycle and $ 100 oil calls from Bank of America.

Our Call of the day from the co-founder of TankerTrackers.com, Samir “Sam” Madani, sees many warning signs of this oil optimism. He paid off his oil exposure two weeks ago after gaining 71% of the assets from the exposure that began in March 2020 when oil crashed below $ 20 a barrel amid the early COVID-19 pandemic panic.

“I feel like it’s becoming a crowded thing. The narrative is way too optimistic, ”Madani said in a recent phone interview with MarketWatch, adding that the doom of oil will be the consumer. “The cost of living now exceeds income. Food prices have risen due to labor shortages, high demand for fertilizers, and very high diesel prices (used by tractors and trucks alike) so I think $ 100 is too early. ”

“If we have this discussion a year from now, when the economy is on better economic foundations, then $ 100 is definitely justified,” he said. And it’s not only that the Organization of Petroleum Exporting Countries and its allies should keep prices around $ 68-78 to avoid economic collapse, but also the fact that consumers outside of North America are under pressure from high fuel taxes be set, he said.

So Madani – putting money on the table for his own retirement and an apartment or anything one of his four children might need – switched from oil investments offered through a mutual fund through the Swedish public pension plan. And he switched to the water.

He started investing in water earlier this year, replacing the exposure to China stocks he had held since 2016. That investment has increased by 20%. The oil exposure he got out of two weeks ago went to the Pictet-Water P mutual fund. He also has some small-cap equity investments and looks at gold mining stocks.

“I think it’s the mother of all commodities, while all other commodities have been boom-and-bust cycles, there is a continuous demand for water as the population continues to grow at a rate of 100 million net per year,” he said. Recalling projections for a world population of 10 billion by 2052.

“Whether there is a flood or a drought, this fund should do well as it includes infrastructure like pipes, procession, filtration, etc.,” said Madani. The importance of water surfaced in the U.S. infrastructure bill, where it was one of the few priorities that political parties had agreed on, he said.

Read: Stocks and sectors that could benefit from the infrastructure bill

Growing up in the Middle East, where petrol was used to wash cars, he learned the importance of water and that “water is something to drink, not something to waste”.

While many early investors and Wall Street are on the water, this is just a physical market with no futures. Companies include Danaher Corp. DHR,
Waters Corp. and American Water Works Company AWK,
and Veolia Environnement FR: VIE.

Exchange traded funds include First Trust Water FIW,
Invesco Water Resources PHO
and Invesco S&P Global Water Index CGW,
all of which were selected by Investopedia as one of the top ETFs for the fourth quarter of 2021.

Some argue that water is a more difficult environmental, social, and governance investment because the ecosystem in question takes a long time to understand. “In years, it could be my children tracking down water,” said Madani.

Read: Every whale is worth $ 2 million? Why it’s time to add nature’s value to GDP.

The buzz

A bevy of banks got up before the bell with beats from Bank of America BAC. reported,
while Wells Fargo WFC
and Morgan Stanley MS.
Walgreens Boots Alliance WBA
also delivered positive results, Citigroup C
and UnitedHealth UNH.

Taiwan Semiconductor TSM

TW: 2330
reported a record profit in the third quarter thanks to increasing chip demand.

Meanwhile, U.S. efforts to fix supply chain problems by opening the Port of Los Angeles 24/7 may not be enough to save Christmas, industry experts warn.

On the way to the first day of trading on Thursday, the all-remote software company GitLab valued its IPO late Wednesday at $ 77 per share, well above an already elevated range.

Weekly jobless claims stood at 293,000, lower than expected, while producer prices in September were in line with forecasts, up 0.5% and food and energy costs up 0.2%. And China’s factory gate prices rose 10.7% in September, the fastest increase in more than two decades, driven by rising raw material prices.

Check out the latest podcast, Best New Ideas in Money.

The markets

Single Stock Futures ES00

YM00
rise, led by Nasdaq 100 futures NQ00
than bond yields TY00
pull back according to Wednesday’s CPI data. Elsewhere, pretty much everything is DXY except the dollar,
with oil prices CL00

BRN00
Gain 1% more, natural gas NG00
almost 3% up. The Turkish Lira USDTRY
hit a record low after President Recep Tayyip Erdoğan sacked several central bank governors late Wednesday, one of whom opposed last month’s surprise rate cut.

Random reads

Bali is finally open to international tourists again, but good luck finding flights.

A popular donut biscuit that is infested with illegal sprinkles.

4-foot, nearly 40-pound prehistoric “river monster” captured in Kansas.

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