Danny Moses 6.6 24 ideas

Speaker states "the energy sector... was undervalued" and it is "another reason to kind of overweight energy stocks." The sector was the most undervalued and underowned in the S&P before the crisis. Geopolitical risk is generally underpriced in commodities, and this event highlights the sector's strategic importance. The sector offers attractive valuation and represents a prudent overweight, especially given heightened global supply risks. A rapid and lasting resolution to the crisis that removes the geopolitical risk premium and refocuses the market on long-term demand concerns (e.g., energy transition).

Speaker cites Exxon Mobil's 2030 business plan based on $65 oil and states "if $65 oil happens, this is the cheapest stock in the S&P 500." The stock was undervalued even before the crisis based on conservative oil price assumptions. The geopolitical event adds a further catalyst but doesn't change the fundamental valuation math. At current or even moderately lower oil prices, XOM's valuation is compelling, offering a margin of safety with optionality on higher energy prices. A sustained, deep collapse in oil prices well below the company's planning assumptions ($65).

"We saw already from BLOCK... firing, you know, 40% of their staff... Your job is for margin expansion to produce earnings. If you see the opportunity to do it... you're going to do it." While Moses worries about the *macro* effect of unemployment, he acknowledges the *micro* benefit to the specific companies: AI and efficiency measures lead to margin expansion. Block (SQ) is the prime example of a company aggressively cutting costs to boost profitability. Long SQ (and similar efficiency-focused tech) for earnings growth via cost-cutting. The cuts signal deeper growth issues or the "white collar recession" eventually destroys consumer spending power, hurting Block's transaction volumes.

"If I were a retail investor right now looking to get myself exposure, I would be buying Blackstone, KKR and Apollo... I'd be buying the parent companies that large PE firms that have permanent capital, that have, you know, a huge fee income stream." While Moses is bearish on the *underlying* private credit loans due to liquidity risks, he is bullish on the *asset managers*. These firms collect fees regardless of underlying performance and offer liquidity (publicly traded stock) that the credit funds do not. Long the Asset Managers (GPs) as a way to play the credit boom without taking the illiquidity risk of the credit itself. A systemic collapse in private credit would eventually hurt the GPs' AUM and fee realization.

"Still long gold. Long the gold miners... It's really a play that central banks are incompetent to a degree... If you think the way out of this... is bailing out private credit... gold kind of prices all that." The thesis is fiscal dominance. With US debt approaching $50T and inflation sticking, the Fed will be forced to debase the currency or bail out credit markets (printing money). Gold is the hedge against this "moral hazard." Miners (GDX) are a leveraged play on the metal. Long Gold (GLD) and Miners (GDX). A "soft landing" where inflation cools without Fed intervention, or a strong dollar rally driven by global instability.

"Everybody's energy playbooks out in the last week or so like, Wow, these stocks are cheap. If oil were to even stay at 65, these stocks are... cheap." Energy stocks have disconnected from the immediate spot price of oil. Even if oil prices stagnate or drop slightly (to $65), the sector's valuation implies a margin of safety. This is also a hedge against the geopolitical risks Moses mentions earlier. Long Energy Sector (XLE) as a value/valuation play. A global recession crushing oil demand below $60/barrel.

"I am very concerned about U.S. debt and debt to GDP... When you start to issue more T-bills instead of ten year notes... you by definition create refinancing and repricing risk down the road." The Treasury is playing games with issuance (short-term bills) to mask long-term yield pressure. Eventually, this refinancing risk hits. If inflation sticks, the long end of the curve (10yr/30yr) must reprice lower (yields higher). Avoid Long-Duration Treasuries (TLT). A deflationary crash would send investors rushing back into long-term bonds for safety.

Danny Moses is bearish on the *asset class* of private credit, warning of illiquidity. However, when asked how to play it, he explicitly says: "If I were a retail investor... I would be buying Blackstone, KKR... parent companies... that have permanent capital." This is classic Second-Order thinking. While the underlying private credit loans may freeze or suffer defaults (bad for the holders of the debt), the Asset Managers (BX, KKR) hold "permanent capital" (fees are locked in) and are publicly traded liquid stocks. They are the "arms dealers" of the credit world, insulated from the immediate liquidity mismatch that retail investors in private credit funds face. LONG Alternative Asset Managers. A systemic regulatory crackdown on private credit or a massive wave of defaults that impairs their fee-generating AUM.

Danny Moses explicitly states: "Long Gold... Long Gold Miners." He also cites concerns about U.S. debt hitting $50 Trillion and the Fed being unable to cut rates due to sticky inflation. The convergence of Geopolitical conflict (Iran), Fiscal dominance (US Debt spiraling), and sticky Inflation creates the "Perfect Storm" for hard assets. Gold acts as the ultimate hedge against the debasement required to fund the war and the debt. Miners (GDX) offer a leveraged play on the spot price. LONG Gold and Gold Miners. A sudden strengthening of the USD or a hawkish Fed crushing inflation expectations.

"If $65 oil happens, it's the cheapest stock in the S&P 500." (Referring to Exxon Mobil). The market is pricing energy stocks as if oil is crashing to $45-$50. However, oil has stabilized around $65-$70 (WTI). Furthermore, geopolitical risks (Iran/Israel) are not priced in. Therefore, energy majors like Exxon offer a massive valuation safety margin even without a price spike. LONG energy majors and the broader sector for valuation and geopolitical hedging. A global recession crushing oil demand; rapid de-escalation of geopolitical conflicts.