Wasif Latif on Commodities, Energy & Investing with Michael Tanner | The Crude Truth Ep 142

In this episode of The Crude Truth, host Rey Treviño is joined by co-host Michael Tanner and special guest Wasif Latif, President & CIO of Sarmaya Partners. Together, they dive deep into the concept of the “Return to Tangibles” a powerful shift back to commodities as the foundation of global growth.

From the rise of the commodity supercycle to the future of oil, natural gas, uranium, gold, and copper, this conversation explores how energy, finance, and geopolitics are shaping investment strategies today. Wasif shares insights on thematic investing, inflation, fiscal risks, and why commodities remain critical despite the push for alternative energy.

Whether you’re an energy professional, investor, or simply curious about the forces driving markets, this episode delivers valuable perspective on navigating cycles and identifying opportunities in a changing world.

Highlights of the Podcast

00:00 – Introduction

02:28 – Guests Introduction

04:47 – Founding Sarmaya

07:24 – Return to Tangibles

09:18 – Thematic Investing

11:29 – Top-Down Macro View

14:46 – Nuclear Renaissance

19:15 – Energy Demand Reality

22:42 – Supply & Price Pressures

26:00 – Gold & Silver Focus

29:56 – Central Banks Buying Gold

33:59 – Inflation, Geopolitical & Fiscal Risk

35:35 – ETF Introduction

37:15 – Closing Thoughts

Please reach out to Wasif Latif on LinkedIn

Please reach out to Michael Tanner on LinkedIn

Check out StatusJet HERE

We want to thank our sponsors of  THE CRUDE TRUTH.

Wasif Latif on Commodities, Energy & Investing with Michael Tanner | The Crude Truth Ep 142

Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Rey Treviño III [00:00:00] Returning to tangibles, are they on a silver platter just waiting to be served? We talked to an expert about this on this episode of The Crude Truth.

Narrator [00:00:12] In 1901, at Spindletop Hill near Beaumont, the future of Texas changed dramatically, as, like a fountain of fortune, thousands of barrels of oil burst from the earth towards the sky. Soon Detroit would be cranking out Model Ts by the millions, and America was on the move, thanks to the black gold being produced in Texas. Now, more than a century later, the vehicles are different, but nothing else has truly changed. Sure there may be many other alternative energy sources like wind and solar and electric. But let’s be honest, America depends on oil and entrepreneurs, and if the USA is truly going to be independent, it has to know the crude truth.

Narrator [00:00:55] This episode is brought to you by, LFS Chemistry. We are committed to being good stewards of the environment. We are providing the tools so you can be too. NAPE Expo, where deals happen. Air Compressor Solutions. When everything is on the line, Air Compressed Solutions is the dependable choice to keep commercial business powered up. Sandstone Group. Exec Crue. Elevate your network, elevate your knowledge. Texas Star Alliance, Pecos Country Operating, fueling our future.

Rey Treviño III [00:01:31] Well, thank you again for tuning into another episode of The Crude Truth. As we continue into the year, the energy industry only continues to get stronger and stronger, especially as this administration only continue to want to drill baby drill and is trying to make an even playing field for all energy to have an energy. Addition and continuing on. And there are even more and more ways that the energy industry is helping out other forms and fashions in the AI world, in the computer world, and even in just ways that we can’t even think of. And these are ways that just bring in total financial ideas and greatness. And so for this episode, I brought in somebody that really understands finances. He’s no stranger to the show. My guest co-host today is Sandstone’s own Michael Tanner. Michael, how are you?

Michael Tanner [00:02:28] I’m good. This is going to be really good. I’m excited for this one.

Rey Treviño III [00:02:31] Dude, you perked up. You don’t even get that excited when you’re on the show and we talk about the fun stuff that we do. I mean, you really didn’t, did I?

Michael Tanner [00:02:40] Well, for one, not to spoil who our guest is, but I am a really true believer in what they’re doing. He’s been on a friend of our show, Stuart Turley’s podcast. Shout out to Stu. And I’m just, I’m a big fan of what they are doing and I’m really excited to hear what he’s got to say.

Rey Treviño III [00:02:59] Well, I’m excited, and what I’d like to do now is introduce this gentleman. Our guest today is someone that is just blazing this trail, Michael. And again, without further ado, from Sarmaya Partners, Wasif Latif, President and Chief Investment Officer. Sir, how are you?

Wasif Latif [00:03:17] I’m doing great. Thanks for having me, Rey. Great to see you, Mike.

Rey Treviño III [00:03:20] Well, thank you. And just because of that Chief Investment Officer, I was like, Michael, I want you to be on this episode. I tell people all the time, it’s like, you’re that numbers guy. You know what’s going on. Plus, again, you are more excited about this episode than you’ve even been here in the past. So tell us a little bit about what exactly got you so excited, Michael, we’ll start there.

Michael Tanner [00:03:45] Well, One, I’m an energy nut and I enjoy the finance side of the business sort of having migrated there. And really my philosophy when it comes to how to evaluate, we’re looking at deals all the time. We live and breathe oil and gas projects. And it’s always fascinating to come across other companies, other firms, other people that have this. Energy theme and I think that’s a really exciting thing that specifically what Wasif and his firm has started and I don’t want to forget about Carl and Tom who’s sitting over there, wonderful part of the team there, this idea of the commodity super cycle and where things are with so I’m and I don’t want to spill too much of your thunder because I’m interested, I really want you to kind of lay it out, but this idea of thematic investing and really picking, not just, when I hear theme, I think thesis, and I come from a technical writing background where you have to start with the thesis, you have the defend the thesis and then you get a write, hey, guess what, I was right. So it’s just gonna be fun.

Rey Treviño III [00:04:43] You know Wasif tell us about you tell us about your firm and all the great things each other doing here

Wasif Latif [00:04:47] Well, thanks for having me. First of all, I’ve been in the investment management business for almost 30 years and managed, you name it, the kind of portfolio I managed at stocks, bonds, combination of those two alternatives, working for large asset management companies, banks, insurance companies, all of that stuff. And about two years ago, all that work was the culmination of the founding of Sarmaya Partners, because most of my work had been a combination of looking at the world from the top down. Thinking about how do things come together and really coalesce around the various types of different policies, whether it’s macroeconomic policy, fiscal policy, monetary policy, all those things that impact financial markets and our lives, generally speaking, how they come together and ultimately how they manifest and can be reflected in a portfolio. So Sarmaya was really born out of that view. And I look back in history and I looked back from a top-down standpoint and when you look at it from that standpoint you realize that every major market cycle in history there’s always some kind of a secular theme that dominates that period and if with a high degree of conviction and confidence you can identify that upfront and say you know what I’m going to concentrate and focus on this. Then the next several years and 10, 15, 12 years of that secular market cycle is that cycle, that secular thing leads the way. It dominates everything else. So we built a really, really good chart. That’s sort of our core chart that represents that. And we can go through those things as well. But that’s sort the essence of what we do at Sarmaya. We manage an investment strategy that is investing in the next big secular cycle. Theme, which we think is a commodity supercycle, and we’re calling it the return to tangibles.

Rey Treviño III [00:06:46] Well, you know, when you talk about that, that is obviously kind of the way I did my little teaser talking about tangibles and commodities. And I don’t think as a whole, and I could be putting my foot in my mouth, but we don’t look at commodities or tangibles the way that we used to, or the way we should be doing it. And I think right now we have a president. That’s looking at tangibles and commodities the way we used to and the way we should be doing it. So if you disagree with me or anything, please let me know. But I’m very fascinated about your super cycle and where you see things going.

Wasif Latif [00:07:24] So you made a good point about we have forgotten how important tangibles are. And by tangibles, it is commodities. It’s the building blocks and the foundations of what we have. When you’re sitting in a room, you can be anywhere in the world. All you have to do is look around you and every single thing that is around you, that you’re consuming, that you are using came from the ground. That’s how important these things are. And so over the past 15 years, since the great financial crisis. The world had forgotten the importance of these ugly, dirty, grimy commodities. Why? Because we had become enamored with everything technology, everything tied to digitization, the virtual world, all this stuff. And I’m not saying that that’s not important. What I’m saying is that world that we have built is resting on the foundation of commodities and the world had forgotten about it. And so the reason we’re using the phrase. Return to tangibles is that the world is now returning back to something that is essential for not only our existence but also our prosperity as human beings and the world at large.

Michael Tanner [00:08:39] I think that’s really, I think it’s really fascinating. I really want to get that chart that you mentioned up here on the screen. Cause I want to kind of really understand from your mind what, you know, we see the different themes throughout the, throughout the years. You can see, you started with the golden oil theme. That was a lot of it was led by kind of the decoupling and the invention of OPEC. We’ve come back now in the 2000s. There was a slight commodities. Supercycle or a cycle that we saw you’re now in this mode where you can kind of see that the bottom right corner Where you’re before beginning in your opinion what that superset goes what Lee and has led you to sort of take this as a thematic approach leading up here

Wasif Latif [00:09:18] Sure, so thematic investing has been around forever. The very first thematic fund was started in the late 1940s or some kind of broadcasting type of a, because TV was new and everything like that. So thematic investment in general has been around for a very long time. And to us, the secular view of this chart is pointing out that, as I mentioned earlier, every major theme, a secular cycle is led by some kind a major secular theme. So the return to tangibles, really we think is that it has to be something that’s generally attractive. It’s a great place to be from a forward-looking standpoint, but more importantly, it’s generally under-loved, under-owned, underappreciated, and just unowned. And when you look at all of these things together, that creates a very, very attractive place that has a good prospect going BUT Just because something is cheap and under-loved and under owned doesn’t make it that it’s going to start rallying the next day. So you need something that’s a catalyst. And so the catalyst is really important. And we think that there’s been this very, very slow burn pretty much since the Great Financial Crisis, where a lot of things have been coalescing and coming together. And the ultimate catalyst was the pandemic, where the lockdowns, the supply chain constraints, and the unleashing of the fiscal stimulus. All of that combined to unleash inflation, which hadn’t shown up for a very, very long time. And so the inflation was the catalyst because of all the things that were happening. And you tie that with the geopolitical escalation that we saw in 2022. Those were the catalysts that, in our view, really ignited this commodity super cycle. And it’s still in the early innings. As that chart showed, when a secular theme begins, it’s a multi multi-year process. And so we think that this is just early innings for the next cycle to begin.

Rey Treviño III [00:11:16] Man, you know, when y’all are looking at all these different cycles and sets, you know, what kind of work or what are y’ all looking at and diving into as far as the numbers to understand where the cycle is at and how it is beginning.

Wasif Latif [00:11:29] So it’s a combination of attractiveness of the space, valuations of the space, but also because we also start with the top down view, we try to see how these things are going to play out. So it is a combination looking at monetary policy, looking at fiscal policy, and when we are looking at policy makers, we tend to think about, well, they could do this, they can do that, but a lot of decisions are made based on the constraints they are facing. So when you can identify some of the constraints, then you have a better sense of the narrow path that is likely going to happen. So it’s thinking through the logical steps about things are gonna evolve and change between those policies. And then that also includes the geopolitical and the budgetary world we are in. And then lastly, you have to look at the demographic side. So all of that body of work is what we call the top-down macro view. And then that helps us identify what areas within the commodity space we think are gonna do well. As you know, commodities are not a single piece. It’s a very large, well-diversified group of different things that we use. So we then further break it down into sub-themes, looking at where. There’s not only opportunity now, but where is going to be the leadership for this longer cycle. And as you can imagine, energy is a big part of it. One of our sub-themes is called energy is life. And we built a chart around it. We can show that as well. That one of our key sub-themes is energy is live. And in that, we then identify the companies, the stocks of the companies that are going to benefit from this, and we invest in them. And then the same thing with the geopolitical and fiscal risk. Sub theme and we can talk about each one of these in detail if you like like what is driving those? And then those are the exposures that we built and then the last piece is as you mentioned We’re gonna continue to build out the future whether it’s the AI data centers where there’s the electrical grid the electrification of stuff over time the rest of the world continuing to grow and Building out their infrastructure all of that is going to require broad commodities and in our case, a very, very important ingredient called copper. So copper is a big part of our portfolio, as is gold and silver for the geopolitical stuff, and then oil and natural gas and uranium for the energy’s life components.

Michael Tanner [00:14:04] I mean, hi. That’s one of the reasons I’m a big fan of what you guys are doing is because of the broad diversification of what’s built into this and even within the commodity space you’ve identified specific as you mentioned these sub themes and I want to hit on one of them I think that you know we talk a lot of oil and gas, RT does on this podcast, I do as well but I don’t think and I think what’s getting a lot more love now specifically with this new administration is the uranium and specifically the nuclear space. How or do you see that within your portfolio playing out? What are you looking for? Do you see that as something that’s Obviously, you see it as something viable going forward, but is it really this long tail investment that people are talking about? And how much does the regulatory environment really play into that?

Wasif Latif [00:14:46] Well, for nuclear regulatory environment is very critical. So let’s take a step back to 2011, the Fukushima disaster happens in Japan and very tragic event. As a result of that, the world at large said, we’re done, we’re not touching nuclear again, we’re down with it. And what happened was the governments and policymakers started to regulate and say, we will gradually get out of nuclear power. Okay that’s great but the efficiency and the pound for pound power that nuclear power creates is just tremendous and on top of it it is clean and so you fast forward to five years ago and we began to pay attention to this in 2020 and we said there’s an opportunity here because earlier on After Fukushima, what happened was because those companies said we’re going to decommission all these nuclear power plants, the price of uranium collapsed. And when the price uranium collapsed, all the companies, the miners, their prices collapsed. And that to us was the opportunity. As I said, if it’s under loved, under owned, you got to pay attention to it. And so that’s when we said, okay, there’s some opportunity here, so let’s look at it. And what’s happened is because of the intense realization and I’ve seen intense because it’s like this sudden switch right people are like oh my god we need this energy whether it’s the tech bros in the AI data center need or just this realization that we don’t have enough power that we’re generating through conventional energy sources in our electrical grid we need nuclear that’s what’s created what is now being referred towards the nuclear renaissance. That’s what’s burning this demand up again. So how do we play it? We play it by looking at the different sort of parts of the cycle, of the nuclear cycle, but ultimately we want to be part of the foundational part of each commodity. So what I mean by that is there are companies out there that are building power plants, their companies are helping with that. Those really good, but they’re very richly valued and to us. That might be a place that’s not going to necessarily do well for the time being. And if they if they come down, we’ll get into them. You know, people talk about picks and shovels. There’s there’s everybody’s been talking about picks and shovel ever since the stuff’s happened. I was at a conference when somebody asked me this question. And you know what I said? I want to be in the stuff that those shovels are actually picking up, not the picks and troubles. I want be in this stuff that they’re picking up. Which is what? Uranium. So we’ve been investing in uranium mining companies for many years, and that’s been a great help to the portfolio, those things have done well. So that’s how we generally wanna play it. And in the interim, if there are opportunities for us to look at either power plant producers or companies who are building the, sort of the generators or the new type of nuclear power plants, we’ll definitely play those as well. So the company we own, owns both the mining space and also is involved in building nuclear reactors. And so there’s a really advantage to be sort of in that type of a space.

Rey Treviño III [00:18:17] You know, just real quick, I just think that nuclear is in such a unique, positive place with people like Lee Zeldin, Chris Wright, Doug, and then a former North Dakota Governor Doug doing so many great things, but then you got such a younger generation than even myself that is really pro-nuclear and in a positive, influential way from a- gentlemen like Will Shackle out of Australia, or our very own, very famous Miss America 2023, Grace Stanky, that, I mean, I know here in Texas alone, we’re building a nuclear modular facility to build those. But you were talking about energy and creating more energy, whether it’s through electricity or things. People talk about it, and I believe it should be what’s next, they talk about still that we’re running out of the oil and gas. And that we don’t need it as much. Is that true?

Wasif Latif [00:19:15] It couldn’t be further from the truth. So that we have a chart. Let me pull it up here. So this one is Whenever I show this people’s eyes widen out and and because it’s a realization that Energy usage actually hasn’t declined it continues to increase and there’s many folks who talk about this And so this is a chart showing you the total global energy consumption Mm-hmm. Since 1965. And this is in terawatts, okay? So, and each color within this space is the source of that energy. So there’s a couple of really important takeaways. Number one, this line continues to go up. The only time you’ve seen a slight decline is the great financial crisis and the pandemic lockdown.

Rey Treviño III [00:20:09] Okay.

Wasif Latif [00:20:10] In hindsight in history as big as they might have been they look like blips yeah right and so think about it the energy usage continues to grow and the other important thing is if you look at the components oil natural gas and coal continue to be the biggest part of energy usage around the world yeah and that isn’t going away anywhere soon so from our vantage point The market is looking at energy companies, especially oil companies, the integrators, the service providers, but mainly the companies that are extracting oil itself, and to some degree natural gas. And the market is saying, we’re not going to need as much oil in 30 years, in 20 years, whenever we have the energy transition. What we’re saying is the energy transmission is the timeline for it is probably naive, And it’s not in RV is definitely not going to be 2050 right it might be 2100 at best and so if that’s the case all of these companies they are undervalued and underappreciated and there’s a great opportunity for them to do well and you can see that when oil prices move up the company stocks do really really well yeah the other slide i want to show yes is um it really talks about um the rebuild out of energy so this is a slide from the folks at exxon Or a chart from folks at Exxon that we recreated which is basically showing that You know just like any other thing in business when you’re building or making something Same thing in oil. You got to have continuous investment You got a continuous reinvestment similar to R&D in other kinds of industries If you don’t reinvest if you don’t dig that additional hole You’re gonna run out of the stuff you’re producing eventually. Yeah And so what this is saying is that the amount of new projects and discoveries that are needed to just keep up with the demand that at the level it’s growing, it’s not enough. And so we are on a path where in the next few years, we will come to a crossroads where the amount of energy being produced is not enough to meet the demand. So, and you know this Ray, is that roughly the world uses about what, 102, 103 million barrels a day, roughly, give or take. And the price changes at the margin. So even though that’s a big number, even if you switch the supply by a couple of hundred thousand, that’s enough to move the market significantly.

Michael Tanner [00:22:42] Oh yeah.

Wasif Latif [00:22:42] Here’s a really really interesting factoid that I learned when I learned it I couldn’t believe it so in the middle of the lockdown March April May 2020 oh yeah kids aren’t going to school most people aren’t gonna work restaurants are shut people aren’t flying planes aren’t flying guess how much oil the world was using in the depths of that on a day per day basis

Rey Treviño III [00:23:09] You go first. Oh, I have to physically guess. You’re guessing. Oh, okay. 20 million miles a day.

Michael Tanner [00:23:18] I would say probably 98, 99.

Wasif Latif [00:23:21] You’re closer. It was 85 million barrels a day.

Rey Treviño III [00:23:24] Wow, so think about it.

Wasif Latif [00:23:25] So think about it, so we’re literally stopped, stand still, and we’re still using 85 million barrels a day. Why? We still need to heat our homes, we still need to use electricity, we need to have critical services on like defense and all those things and industries. And so the usage of energy is that, and that 15 million odd drop in the usage was enough to crater the price of oil. And so think about if that was to happen in the other side, if that increased. So we think that at the margin, as the producers in shale, their ability to produce declines or plateaus, not because they can’t. It’s amazing how we’ve been able to use technology and innovate and continue to find more and more oil and the ability to extract it. But at the current prices, they’re not gonna do it. And so what needs to happen is the price needs to go up for them to be incentivized to do it, until that happens, they are gonna plateau. And so we think that the supply is not as robust as the market thinks it is if you go further out three, two to three years.

Michael Tanner [00:24:43] Well, I would completely agree with it. I think you’re seeing that reflective in, if you’re paying attention to any or all of these earnings calls that have been going on, I would say over the past two quarters, you’re hearing the signal call. And I think the interesting part that I read, cause I’m a nut for reading this stuff, but the outgoing CEO of Diamondback said something super interesting that I thought was a signal to people that. It’s not the regulations that’s holding these oil companies back from drilling. It’s even necessarily the oil price on some level. It’s the geological headwinds that they’re facing, which to your point says, hey, if we’re now running out of locations to drill at this price, because like you said, there’s always an availability of wells to drill, but it’s at what’s price point. That cycle is gonna catch up. And I think you guys again are out in front of it. And like you say, playing these cycles, meaning you have to identify it, identify where you are in the cycle and then place yourself within that. So I think it’s really interesting. I wanna talk a little bit about what you guys are doing in the mining space. Cause you mentioned uranium, but you guys also have a, and are really big into gold and silver. Talk a little about how that’s playing into that because I think also ties into a little bit of what we’re seeing going on with the Fed.

Wasif Latif [00:26:00] Yeah, that’s a good point. One interesting thing is the sub-themes that I showed, we are actively managing those exposures. Why? Because that’s one of our value adds in the portfolio for our investors, that we just don’t buy the same weight to these commodities and set it and forget it. What we’re doing is every day looking at this space, trying to figure out where, even though we know on a longer term basis, seven, 10, 12, 15 years, this stuff is gonna go up, but we know, on a near term basis there will be some volatility, some changing of leadership and things of that nature. And so we’re actively managing oil exposures. So what does that mean? Earlier last year, we had a high allocation to oil and gas through the Energy’s Life sub-theme. And then towards the end of last year early this year, we flipped that to have a much higher allocation to gold and gold mining stocks and silver and silver mining stocks in our portfolio to the point that that’s our largest exposure right now. So I just want to emphasize that as a scope, that’s the biggest emphasis right now in the portfolio. So the history of gold is very interesting. We call it the king and looking at it from sort of a JRT tokens, Lord of the Rings standpoint. It’s the return of the king. That’s sort of our sub theme on gold. And it really is going back to the idea that in 1912, JP Morgan once made a quote when he was testifying in front of Congress. He said, gold is money. Everything else is credit. And so we’re now coming back to a world where whenever you have geopolitical risks, whenever you money debasement, the decline in the value of the purchasing power of fiat paper money, i.e. Inflation, you see gold going up. So gold acts as a safe haven in those three types of environments. And what is interesting is we now think that all three of those environments are coalescing and they have been. And so gold has been rallying for the past four or five years and is telling us that this stuff is happening and this stuff will continue to happen. And so just a couple of interesting points on gold. In the 2000s, central banks around the world were actually net sellers of gold, because the price of gold had declined. We were in the era of globalization, and they were using it as a source of cash and revenue. And they were also just rejiggering their balance sheets. So they were net sellers. Of gold. Fast forward to 2022. Or even a little bit before that they became net buyers of gold and in 2022 when Russia invaded Ukraine and the US and the European Union confiscated Russia’s 300 billion dollars worth of dollar and euro reserves that sent a message to not only the Russians but friend and foe alike around the world that your dollars are not your dollars if we say so and as a result of that they said okay we need to diversify out of our US dollar holdings because they own treasuries they had US dollars because we’re the reserve currency and most trade around the world occurs in dollars and so if they’re selling stuff they’re going to get dollars and they need to recycle it so they’re gonna buy treasurys and things of that nature So, there’s a chart that we have, I can share it, where in 2022… So these bars are the purchases of central, of gold by central banks around the world. You see that immediate jump in 2022?

Rey Treviño III [00:29:56] That’s

Wasif Latif [00:29:57] that is when the central banks of the world said we need to diversify out of the US dollar and start adding to gold and so to us this is likely to continue and this is a a buyer that is a systematic buyer that, is indifferent to inflation that is indifferent to the economic story in the US. Yes they care about the dollar because their other holdings are in dollars. So as the dollar is being debased or declined because of inflation or high budget deficits, because of that, that adds to their desire to buy. So we think that this sort of buying of gold is going to be there for the foreseeable future with central banks’ mine. The other two pieces, inflation, there’s another chart, and I apologize for having a lot of charts, but this is a really good one.

Michael Tanner [00:30:51] I love it.

Wasif Latif [00:30:51] This is another one that is an eye-opener for people when they see it. So this is CPI in the U.S. The dark line is CPIs from 1966 to 1984. So basically covering the 70s.

Michael Tanner [00:31:05] Come.

Wasif Latif [00:31:06] And the light green line is CPI in the U.S. Since 2014. And we know the 70s are famous for high inflationary era, that was the last big inflation shock we had. Look at how the light-green line is tracing it. It’s pretty close. And so, you know, I usually have like this catchy phrase that an inflation spike is like a cockroach. If you see one, you’re bound to see another one and there’s gotta be more. And and there’s historical precedent for that when you see inflation spike once it usually results in it’s never a one and done it usually result in more spikes after that because just human nature think about it you know we think that consumers are thinking about CPI no consumers thinking about the absolute price so if steak at the grocery store is more 15 20 percent more expensive than what it was five years ago, maybe I’ll buy something else. And that goes into the human psychology and that ultimately feeds into behavior which then feeds into demand wages and things of that nature. So there’s some behavioral elements plus supply elements that feed into it. And all of that means is that we think that inflation is with us for a while. We’re seeing a momentary reprieve and it’s gonna come back again. So between inflation. Geopolitical risks and then lastly the fiscal deficit that we have the budget deficit that is weighing on the dollar and people who are looking at that that is a concern from a bond investor standpoint and an overseas investor standpoint there are trillions of dollars that are invested in US financial markets stocks and bonds by foreigners pension plans insurance companies big asset managers out of Europe and in Japan and Asia and they’re seeing the currency decline so in April when the stock market went down their holdings went down even more because the dollar also went down at the same time and so as a result of that and these things take a long time so we think the third component is because the Dollar will in our view we’re in a weakening dollar cycle it doesn’t say that the dollar will lose its status we’ve had bear markets in the past for And we think we’re just in another one again. But what they will do is gradually begin to move money capital back home for other investments and purposes. All of those things to us mean that gold is a great, great hedge for all of these risks in a portfolio. So we own gold directly and we also own gold mining stocks in our portfolio to like that.

Rey Treviño III [00:33:51] That is you know, will you give those three things one more time that you see the inflation? So inflation

Wasif Latif [00:33:59] geopolitical and fiscal risk, geopolitical risks, and then the fiscal risk is causing the capital to leave the country as well.

Rey Treviño III [00:34:08] Well, I mean, I was just talking to my father the other day. It’s like, I know the average home here in Texas, I think it’s like $536,000. Is it really that or is it just the value of the dollar has just gone down that much?

Wasif Latif [00:34:20] So there’s an interesting, among gold folks who follow them, there’s a interesting tidbit that they use which is, and I’ll paraphrase it, which is that 20 years ago or 100 years ago, X amount of ounce of gold would buy you a house.

Rey Treviño III [00:34:39] Mm-hmm.

Wasif Latif [00:34:39] And X amount of gold would buy you a really nice tailored suit in in london yeah guess how much of gold costs you to buy that today more or less the same

Rey Treviño III [00:34:51] same like that. Yeah.

Wasif Latif [00:34:52] Yeah so it isn’t the real asset the real value of that is probably the same is that the the currency has depreciated so sometimes we think about oh this is an asset that’s appreciating but in the for real assets which are physicals or tangibles as we call them sometimes it’s just that the currency in which its price is declining.

Rey Treviño III [00:35:13] You know, Wasif, you have really opened up a whole, I feel like a whole bag, a whole cow of worms here. In a good way. For individuals out there that want to know more about, I’m gonna say it’s a fund, is that correct? It’s an ETF. An ETF, okay. For people that wanna know more about your ETF, how can they get ahold of you guys?

Wasif Latif [00:35:35] Yeah, so they can visit our website, sarmayapartners.com, or they can go directly to the ETF website. It’s sermayetf.com. Or if they have a brokerage account, they can pull up the ETF on their brokerage account and have a look at it. The ticker is Lens, L-E-N-S, Lens. It’s an easy to remember ticker, and we did that because we looked through the lens to get a sense of the future and do right by our shareholders.

Rey Treviño III [00:36:04] And Michael, for those out there that are maybe a little intimidated to reach out to Wasif and they don’t know how intimidating you really are, but how can people get ahold of you to break down financials?

Michael Tanner [00:36:15] Just find me on LinkedIn Michael Tanner That’s the easiest way to get a hold of me and you’re gonna probably ask some questions that I’m gonna point to this man over here so

Rey Treviño III [00:36:22] Do you have any final questions for him as we go?

Michael Tanner [00:36:25] No, I, you know, we could sit here for hours and talk about oil and gas stuff. Get out of my head, I know.

Rey Treviño III [00:36:30] He didn’t even bring up that one chart about, I mean, no, yeah, I’m sorry. But all I was gonna say is what I think is fast.

Michael Tanner [00:36:38] Looking at all of the other ways commodities are impacting our lives and specifically how that fits in with this Supercycle theme that you guys have because it is you’re absolutely right. It’s not just oil that’s going Yes, oil is probably entering a time where we’re in it. It it’s you know prices are down. It the cyclical business We all know that innately in the energy in the in the oil and gas business, but that same that same theme plays out in all of these other sectors that you’ve decided to add to it. And I think it’s a, I think, it’s just an awesome strategy that you guys have. So thanks for helping me playing your sample.

Rey Treviño III [00:37:10] No, thank you for coming in and also one more time. How can people get a hold of you, sir?

Wasif Latif [00:37:15] They can find me on LinkedIn, and I’m on Substack as well. I write quite a bit, I post a lot. I’m very active on LinkedIn trying to provide all the write-ups that we do. So we do write stuff pretty regularly to get people informed. So that would be the best way they can message me on LinkedIn and we’ll be happy to connect with them.

Rey Treviño III [00:37:33] Okay, well there you heard it right there. We are probably headed into a pretty crazy cycle as Michael did like to say also it is cyclical when it comes to the oil and gas base. It seems to me that always the time to invest is what nobody else is investing. I liked also how he said, Hey, man, if something maybe is under appreciated in the undervalued in the base makes it a great value. Treat your people good. If you all got any questions, if you all want me to reach out to watch stuff, let me know. If y’all want to get in contact with Watson through me, please let me know in his team. I look forward to more conversations about this, hopefully as the year continues. And thank you as always for tuning into another episode of the creature.

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The Crude Truth with Rey Trevino

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