Ted Oakley: ‘An Accident Waiting To Happen’, Why You Need to Own Hard Assets & Oil and Gas

Stijn Schmitz welcomes Ted Oakley to the show. Ted Oakley is Founder and Managing Partner | Oxbow Advisors. The discussion explores investment strategy, focusing on long-term holdings, hard assets, and contrarian opportunities. Oakley emphasizes the importance of a longer investment horizon, typically holding stocks for three to ten years, while acknowledging that most traders focus on short-term moves, often using leverage and options—which he views as risky. He notes that his firm recently bought back gold, silver, and mining stocks after significant corrections, considering them cheap on a cash flow basis, and continues to hold energy positions.

Oakley expresses caution regarding certain AI-driven tech companies, citing concerns about debt levels, earnings quality, and the sustainability of current growth. He sees parallels to the late 1990s and the potential for revaluation if commercial viability falters. He advocates maintaining liquidity to seize opportunities during market dislocations, often holding substantial short-term treasuries alongside gold as a currency hedge against dollar depreciation and long-term inflationary pressures from rising government debt and deficits.

The conversation turns to gold, with Oakley viewing the recent pullback to around $4,000 as a buying opportunity for those with a multi-year outlook, expecting much higher prices driven by central bank purchases and de-dollarization trends. He sees gold miners and royalty companies as undervalued, noting strong balance sheets and wide profit margins relative to extraction costs. Silver is also considered attractive, though more volatile. On energy, Oakley highlights the sector’s profitability even at moderate oil prices and the structural supply constraints from underinvestment. He recommends a diversified approach across producers, pipelines, and service companies, focusing on quality names bought at a discount to intrinsic value. He also discusses critical minerals and iron ore as part of a broader hard asset strategy to protect against currency debasement.

Timestamps:

00:00:00 – Introduction

00:01:00 – Current Investment Opportunities

00:02:23 – Long-term Investment Horizon

00:05:05 – Microsoft and AI Concerns

00:09:37 – Liquidity and Market Risks

00:11:29 – Debasement and Hard Assets

00:14:36 – Gold Market Opportunity

00:18:19 – Silver vs Gold Thesis