Charles Bobrinskoy 1.7 15 ideas

The speaker explicitly "pounded the table about" APA, stating it was trading at a P/E of about five and 2.5x EBITDA, priced as if nobody will need oil and gas in the future, which he calls "silly." He believes U.S. demand for electricity will come mostly from natural gas because there won't be enough wind and solar to power data centers. APA is "very well positioned for increased demand for natural gas." The stock was extremely undervalued based on a flawed long-term demand assumption. The expected rise in natural gas demand for power generation provides a concrete catalyst for revaluation. A resolution in geopolitical tensions (e.g., Iran) could remove a current source of support for energy prices, though he argues the market's backwardation already reflects such negative expectations.

"The market was assuming demand for oil and gas was going to decline. With a move to electric cars. These stocks were trading at incredibly low multiples, seven, eight, nine times earnings... we think that with expansion of the world's economies, that demand for oil and gas is going to increase, not decrease." The market has mispriced traditional energy equities by overly focusing on the long-term transition to EVs while ignoring near-to-medium-term global economic growth. Because baseline energy needs will grow alongside economic expansion, these asset-heavy companies will generate massive cash flows. Buying them at single-digit multiples offers a deep value opportunity with a built-in inflation hedge. LONG traditional energy equities to capitalize on the valuation disconnect between EV optimism and the reality of growing global oil and gas demand. A severe global economic contraction could destroy baseline energy demand; technological breakthroughs could accelerate EV adoption faster than currently projected.

"The world is also consuming more food each year. The diets are getting better. Those are protein based diets. A cow or a chicken consumes a great deal of grain. And so the demand for fertilizer keeps going up. And what Mosaic has is it has assets in North America which don't pay the tariffs..." As emerging global middle classes shift their diets toward meat and poultry, the agricultural sector must produce exponentially more grain to feed livestock. This creates inelastic, compounding demand for crop yields and, by extension, fertilizers. Companies with North American production assets (like Mosaic) have a distinct margin advantage because they avoid international tariffs and high shipping costs in a deglobalizing world. LONG North American fertilizer producers as a structural play on global dietary shifts and a geopolitical hedge against supply chain tariffs. Farmers could temporarily reduce fertilizer application rates if prices spike too high; a global recession could slow the dietary shift toward expensive proteins.

Charles invokes Warren Buffett's "Too Hard" pile regarding memory chips. He cites the historical example of Intel vs. Nvidia, noting that in 2005, everyone thought Intel was the winner, yet they missed the GPU shift. The semiconductor industry is highly cyclical and prone to rapid technological obsolescence. It is difficult to analyze the "economic moat" in memory compared to physical assets like sports teams or energy reserves. AVOID. Stick to businesses where the competitive advantage is measurable and sustainable. Missing out on a cyclical upswing in memory pricing (FOMO).

Charles notes that despite the AI hype, the "biggest source of energy in the US... is natural gas." He highlights that the energy sector has been out of favor and trades at roughly 7x earnings. AI is fundamentally an energy arbitrage trade. You cannot have data centers without electricity, and you cannot scale electricity rapidly without Natural Gas. Therefore, "Old Economy" energy stocks are the hidden infrastructure play for the "New Economy" AI boom. LONG. Deep value (low P/E) combined with secular demand growth from tech. Regulatory shifts against fossil fuels; volatility in commodity prices.

Charles states that in an AI world where digital content is easily faked, "people still want to go watch basketball" and see live events. MSGS (Knicks/Rangers) trades significantly below the private market value of its franchises. SPHR is successfully monetizing unique IP (U2, Eagles, etc.) in a way that cannot be replicated on a screen. The "Second-Order Effect" of AI is a premium on authenticity. As digital content becomes commoditized and suspect, the scarcity value of physical, in-person experiences (Hard Assets) skyrockets. LONG. These are "irreplaceable" assets in midtown Manhattan that provide a hedge against digital disruption. Consumer spending slowdown affecting ticket sales; execution risk on the corporate split of MSG assets.

The speaker discusses "hard companies" like Phinia (powertrain/turbochargers) and the Honeywell thermostat spin-off (Resideo). He notes Phinia trades at ~13x earnings and benefits because the transition to full EVs is slower than expected, keeping hybrids and ICE vehicles relevant. The market priced these legacy industrial spin-offs as if their terminal value was zero due to the EV transition. As the EV timeline extends, these cash-generative "boring" businesses re-rate higher because their runway is longer than the market anticipated. LONG. "Hard economy" value plays with low expectations. Accelerated adoption of full EVs rendering ICE technologies obsolete faster than predicted.