It seems like déjà vu…
Faced with a dire threat, the President banned all oil imports and froze the nation’s assets in the United States, creating tremors of anxiety worldwide.
At first glance, you may think I’m referring to the sanctions President Joe Biden imposed on Russia to punish Moscow for its invasion of Ukraine…
But I’m actually paraphrasing a quote from an August 3, 1990, article in the New York Times. It reported about President George H.W. Bush’s sanctions against Iraq.
Here’s the actual quote…
Faced with a dire threat from the truculent Iraqi leader, Saddam Hussein, to a region containing much of the world’s oil reserves and with world financial markets in turmoil, Mr. Bush banned nearly all imports from Iraq and froze the nation’s assets in the United States.
At the time, I was just cutting my teeth on Wall Street. Digesting news like this on a daily basis – while the economy was in recession – was scary.
Like today, the media had everyone convinced the Oil Shock was the end of the world. And just like today, we saw rising inflation and sky-high gas prices.
So we’ve seen this movie before.
I don’t want to dismiss what’s going on in Ukraine. What’s happening there is a human tragedy.
But all the fears we are seeing today existed in 1990 as well.
Just look at this excerpt from a 1990 New York Times article.
For Mr. Bush, the invasion posed manifold problems: the difficulty of direct military action despite the huge commitment of money and resources to the Gulf in recent years; fear of another surge in oil prices, which could hurt economic growth and rekindle inflation; the potential disruption of the budget negotiations between the White House and the Congress, in which a gasoline tax has been considered, and possible damage to the Republican Party in elections this fall.
Every time there’s an oil shock, the media seems to lose its collective mind… and its faith in America.
Now, I’m no geopolitical expert. So I can’t say how the Ukraine-Russia war will end.
But I do have faith in American ingenuity. And I’m betting on American companies to help us achieve energy independence so we won’t have to rely on foreign oil.
That’s why I see this oil shock as an opportunity. You just need the right playbook.
Never Bet Against America
When it comes to profiting from oil shocks, Wall Street titan JPMorgan is at the top of the list. And the first rule of its playbook is betting on America.
The founder of JPMorgan’s private bank – John Pierpont Morgan – famously quoted his father: “Always be a bull on America.”
And that’s Part One of the playbook: Never bet against America.
One example is ConocoPhillips…
Before the 1990 Gulf War, its engineers had developed a breakthrough seismic technology that allowed ConocoPhillips (called Conoco at the time) to drill for oil in ultra-deep water.
Before that oil shock, no one cared. The United States was importing tens of millions of barrels from Kuwait… with tens of billions of oil in reserve.
But when the U.S. banned Iraqi oil, Conoco’s breakthrough took center stage.
It replaced that massive shortfall, and its share price shot up 86% in the first year of the oil shock.
Here’s the thing, though… That was just Main Street’s gain. It’s not the gain JPMorgan saw from buying Conoco in the private markets. Not even close.
JPMorgan bought private Conoco shares for as little as $1.55. So instead of making 86% during the oil shock… it made 1,190%.
Another example is Duke Energy, which also had an offshoring breakthrough. Companies like Duke were able to take an offshore oil well and 10x production.
Duke was trading at $22 when the 1990 oil shock began. And investors who didn’t panic-sell made 26%.
Yet if you had a seat at the table with JPMorgan when it got private shares, you paid $1.86… and instead of making 26%, you saw 1,399%.
Again, it’s the same stock. Same oil shock. Two different paths.
Think about it this way: Are you ever going to get a great price if you buy at retail?
The answer is no. Like the insiders who get their shares for pennies on the dollar, you must get in early.
That brings me to Part Two of the JPMorgan playbook: Crisis always leads to opportunity.
An Opportunity for Less Than the Price of a Gallon of Gas
Today, JPMorgan is the largest U.S. bank with $2.87 trillion in assets under management. It’s behind some of the biggest private deals in history, including Facebook, Tesla, and electric-vehicle maker Rivian.
And the private markets are exactly where the best opportunities are today… including one that could help the U.S. achieve true energy independence.
In other words, no more foreign oil.
You see, my team recently came across a private energy company in the American heartland…
Led by a legendary engineer and CEO, this company says it’s found a way to produce environmentally sound oil – without drilling and fracking.
It can also do it at a cheaper cost than anywhere else in the world…
Its technology is so promising that JPMorgan wrote a check to become its largest shareholder… And for the first time, you can get a seat at the table on the same terms.
That’s why I held a free U.S. Energy Independence Summit last night to share all the details.
I told viewers about this energy company and its technology to produce oil for less than a dollar per barrel… and I even explained how you can get its shares for just $1.25.
That’s less than the price of a gallon of gas.
Best of all, you don’t need to be an accredited investor to get involved. And you can invest with a minimum of $500.
You can watch a replay of my event right here… but like all private deals, shares are strictly limited. Once this deal is full, that’s it.
Look, we can’t predict how the current Russia-Ukraine crisis will end. But it’s safe to say that the Russian oil ban will impact our energy costs and consumption now and in the future.
It’ll also affect our investments and the broader market by fueling volatility and uncertainty.
Getting into this private company for $1.25 per share is one of the easiest ways to protect yourself – and your money – against both.
Let the Game Come to You!
Teeka Tiwari
Editor, Palm Beach Daily