One nice thing about nasty economic news: softer oil prices---but not for long, according to the champion oil bull.
On Wednesday, Nymex crude closed below $100, at $99.72. It has been over $115 within the last year.
But that doesn't worry Byron King of Outstanding Investments, which has emerged as the decade's champion oil-focused hard-asset service with a stunning performance.
King sticks to his "Era of Peak Everything" worldview, and publishes on a serene monthly schedule. His interim updates are often just helpful collegial promotions for his hyper-aggressive publisher, Agora Financial. Most recently, he posted a sort of odd travelogue about South Africa, which may or may not have had an investment point.
But OI's arguments can be radical. Most recently, it was emphasizing what it regards as the extreme danger posed by Middle East turmoil.
Thus King wrote: "The Egyptian investment situation has become quite dicey. In fact, three months ago, I recommended that you take profits and sell your shares in Apache Oil (APA) and TransGlobe Energy Corp. (TGA) . ... Over time, things might work out for Apache and TransGlobe--I hope so, and I'll keep an eye on them. But I'm still nervous about holding companies with significant exposure in Egypt."
Even more significantly, King says flatly, citing private communications: "I believe that in these three nations [Yemen, Bahrain and Syria], things are worse than we're told by Western news media."
And he describes these insurrections as "the ring of fire that's growing around Saudi Arabia, which as you surely know, is home to the world's largest proved oil reserves. Depending on events, Saudi is the world's No. 1 or No. 2 daily oil producer, swapping the lead with Russia."
"The Saudi government may remain in power for a long time to come (or not). But it's the threat to Saudi stability that's changing the risk equation and allowing oil prices to drift upward."
I see surprisingly little discussion of Saudi Arabia's stability, although it is obvious that the geopolitical boot that has not yet dropped--and its dropping could not come at a worse time for the U.S. military, worn out by nearly 10 years of more marginal wars.
The OI investment solution: "Look for investment ideas that not only will not be overly harmed by the turmoil in the Middle East, but that stand to benefit if the wheels just plain fall off the proverbial bus in that part of the world."
Which means, according to King, offshore drilling.
Thus he writes: "At the recent Offshore Technology Conference in Houston, I heard representative after representative from nation after nation (not the U.S., sad to say) discuss how they're focused on deep-water development."
King regards Washington's witch-hunt following last year's Gulf of Mexico blowout with complete contempt: "In essence, the 2010 post-blowout federal moratorium caused the entire Gulf of Mexico offshore-exploration and development industry to shut down. This was, in the most cynical sense of the term, your federal government at work."
"No more blowouts? Who can argue with that? All in favor of more blowouts, please raise your hand. Anyone? No, I didn't think so. Of course, one way not to have more blowouts is not to drill more offshore wells."
However, he recommends one well-containment specialist that he thinks should profit from the increased regulation: "Buy Helix Energy Solutions Group Inc. (HELX) up to $20."
Beyond that, King bravely recommends two particularly hunted witches: Cameron International Corp. (CAM) and Transocean Ltd. (RIG).
Although King is confident about his "Peak Everything" thesis, he is not complacent. He recently warned that "the nuclear power 'renaissance' is over."
And in OI's current issue, King recommends selling five energy and precious metal stocks for various specific reasons--plus obvious short-term caution about silver and gold.