The Stonk Market team is pleased to present you with a most informing interview of a long-term energy bagholder. Eric Nonuts has been investing in the energy market since 2014. Eric started buying energy companies during the 2014 oil crash up until this day. Eric has an MBA from Texas A&M University and is a CFA Level Three Candidate. In 2015 Eric started trading his own book full time. We are pleased to present you with Eric Nonuts – Long term energy bagholder.
Please provide an overview of yourself?
Hello Eloise and thank you for taking the time to interview me today. As you said, my name is Eric. I am a born and bred Texan. I grew up on a ranch that my daddy owned who his daddy owned before him. I spent most of my time as an adolescent hog-tying cattle. When I became a young adult, my family leased up the majority of our acreage to a little oil outfit called Chesapeake Energy. Our family made a large fortune and I was hooked. I started to learn about the oil and gas business and even became a landman. In 2013 my father died, and I became the heir to my families estate. When the 2014 oil and gas crash happened, I invested the entire estate into the energy sector.
Why are you attracted to the energy industry?
I love the energy industry because there is a significant amount of operating leverage. Back in the day when oil was over $100 per barrel everyone in the business killed it. It is only a matter of time before oil gets to be over $100 per barrel again. I heard the guys in OPEC and even Mr. President Trump (bless his kindred spirit) are working together to increase prices. I also think Mr. Jim Cramer believes the price of oil will probably go up. Don’t quote me on this but I think Warren Buffett said the following quote, “the price of oil will never go below $100 per barrel.” Warren Buffett is smart and if that quote is real then the current price of oil is manipulated, and we will eventually see it go up again.
What do you think of the current negative oil price?
Look man. There is no such thing as a negative oil price. That is just fake news made up by the liberal media. You see, the liberals want oil to go away so they can invest in these stupid green energy projects. Liberals literally control the media through their big giant liberal spider web of liberal holdings and they can push out anything they want. The TV networks have no idea what they are talking about. Oil at negative $40 per barrel? That is just tomfoolery. Negative prices are a things mathematicians made up so they could teach kids in school how to do some sort of hard calculations that the city man does. In real life negative prices are not a thing. Do you ever think The Walmart would pay me to take 15 boxes of condoms, 7 cucumbers and a whole lot of alcohol? NO!!! That would be silly. The only way The Walmart would allow me to get anything from them for free is if I went in there with a gun and said, “give me 15 boxes of condoms, 7 cucumbers and a whole lot of alcohol.” I highly doubt there is a man with a gun holding it to all these E&P producers heads saying give me your oil or I will blow your brains out. Not happening. So that is why negative oil prices don’t’ even exist. It’s just not something that can practically happen in the world.
What is your favorite kind of energy investment?
I like the thicc dividend paying MLPs. Those things are money good. If you see a company paying a 20% dividend yield you can definitely tell that thing is not a scam and going to be a multi-bagger. Plus these kinds of companies will tie the executive compensation to the dividend yield so these CEOs and CFOs are definitely incentivized to pay the dividend no matter what. This is a good sign because it shows how stable and secure these dividend yields are. Oh, and if you see an outside manager running these MLPs that is always a good sign as well – no real hard data to say why it’s a good sign but more of a gut feeling. Mama always said if your stomach is rumbling eat what is ever in front of you.
How have your returns been since managing your families estate since 2014?
My returns haven’t been that great – have yet to have my first up year so its definitely coming around the corner. But I’m not worried. I’m in this for the long run. You know the cure for low oil prices is low oil prices. With oil prices this low this means we have found the cure. Oil is going to rocket up soon and become the next high technology subscription company. I have bet the farm on this. I’m 50% long USO.
What is some investment advice you could give to the reader?
Invest with your gut not your brain. Oh, and if anyone from your brokerage dealer calls you about margin calls just don’t answer the phone. They will eventually stop calling you.
Who is your favorite investor?
My favorite investor is myself. I am literally one of the smartest people I know. I’ve read a few books on value investing before too. Oh and I have an MBA and CFA Level Three Candidate so I basically understand everything about the market. One time I shot a gun and chewed bubble gum at the same time. The teachin’ lady said no one can do two things at the same time. I showed that teachin’ lady.
Where can people reach you at?
People can hit me up on Twitter. I am always trying to pump up my holdings like everyone else.