George Noble

Gold miners are undervalued and poised to rise significantly due to central bank buying, underownership by Western investors, rising earnings, cheap valuations, and de-equitization via buybacks. The GDX/GDXJ are the broad vehicles, but picking individual miners adds alpha.

The most recent numbers we saw out of the mining companies, they reflected on average like $4,100 gold, $4,200 gold. Gold's 5200 today. They're incredibly cash flow positive... guess what the miners are doing? They're buying back stock. Because miners are modeling their businesses on lower gold prices, current spot prices will result in massive earnings surprises. Furthermore, using this excess cash flow to buy back shares creates a constant bid under the stock, driving EPS growth and multiple expansion. LONG. The combination of extreme earnings leverage to the gold price and aggressive share buybacks provides a strong fundamental tailwind for miners. A sudden collapse in the spot price of gold or operational/geopolitical failures at specific mine sites.

Noble says, "I love energy... particularly like the oil service companies." He explicitly names Schlumberger (SLB), Tidewater (TDW), and Valaris (VAL). The sector is under-owned (3% of S&P). Global depletion rates (~5% annually) necessitate constant drilling activity regardless of short-term oil price fluctuations. Service companies have pricing power due to equipment shortages. Long Oil Services for a valuation mean reversion and activity super-cycle. A deep global recession crushing energy demand.

"Go to the RSP, which is the equal weighted... that's going to outperform." The S&P 500 (SPY) is inextricably linked to the "Mag 7" and the AI trade. Since Noble is bearish on Tech/AI, the Equal Weight index avoids that concentration risk while capturing the rotation into "real economy" sectors (Energy, Industrials). Long Equal Weight S&P as a relative value trade against the Cap-Weighted S&P. Tech continues to lead the market higher, causing RSP to underperform.

US Treasuries are unattractive as long-term bonds are in a bear market. Yields have hit 30-year highs in Japan and 20-year highs in Europe, and the US 10-year is around 4.5-4.6%. With rising inflation, exploding deficits, and the bond vigilantes awakening, he expects yields to go to 5% or higher. He has more conviction in this view as price now confirms the narrative.

The trade is long resource stocks (energy, gold miners) and short consumer and tech names. This spread has generated 10% return in the last six weeks. The thesis is that resource stocks benefit from supply constraints, rising oil prices, and gold miners repricing, while consumer and tech stocks are overvalued and face headwinds from consumer recession and unsustainable margins.

Cava (CAVA) is a short because it trades at a 30-40x multiple for a consumer stock in a tough environment, making it unsustainable.

Fresh Pet (FRPT) is a short because the stock has further downside after already falling 40% from Chanos's recommendation. Private label competition from Costco Kirkland and Walmart, plus General Mills, will crush revenues and earnings, driving the stock to $15-20.

Robinhood (HOOD) is a short because the stock exploded on crypto activity and is now imploding; the business is unsustainable.

Tesla (TSLA) is a short because it is dramatically overvalued at a trillion-five market cap despite declining revenues, negative cash flow, and a sum-of-parts valuation of only $50 per share. The self-driving and robot promises are not materializing.

The most recent numbers we saw out of the mining companies, they reflected on average like $4,100 gold, $4,200 gold. Gold's 5200 today. They're incredibly cash flow positive... guess what the miners are doing? They're buying back stock. Because miners are modeling their businesses on lower gold prices, current spot prices will result in massive earnings surprises. Furthermore, using this excess cash flow to buy back shares creates a constant bid under the stock, driving EPS growth and multiple expansion. LONG. The combination of extreme earnings leverage to the gold price and aggressive share buybacks provides a strong fundamental tailwind for miners. A sudden collapse in the spot price of gold or operational/geopolitical failures at specific mine sites.

"Put some money abroad... I happen to like Brazil. I happen to like China." US assets are expensive and crowded. Emerging Markets have been in a bear market, offer better valuations, and in China's case, are beginning to stimulate. A weaker dollar (due to debasement) acts as a tailwind for EM assets. Long Emerging Markets (China/Brazil focus). Geopolitical escalation or a strengthening US Dollar.

"Put some money abroad... I happen to like Brazil. I happen to like China." US assets are expensive and crowded. Emerging Markets have been in a bear market, offer better valuations, and in China's case, are beginning to stimulate. A weaker dollar (due to debasement) acts as a tailwind for EM assets. Long Emerging Markets (China/Brazil focus). Geopolitical escalation or a strengthening US Dollar.

"Put some money abroad... I happen to like Brazil. I happen to like China." US assets are expensive and crowded. Emerging Markets have been in a bear market, offer better valuations, and in China's case, are beginning to stimulate. A weaker dollar (due to debasement) acts as a tailwind for EM assets. Long Emerging Markets (China/Brazil focus). Geopolitical escalation or a strengthening US Dollar.

"I recommended Southwest Airlines... I still like that stock a lot." This is a specific idiosyncratic "stock picker" idea based on fundamental turnaround potential, separate from the macro themes. Long Southwest Airlines. Operational failures or rising fuel costs (though he is bullish on oil, airlines can hedge).