YouSaid · the spoken record

Jared Dillian

lines on the record: 83
first: 2022-09-15
most recent: 2022-09-15
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“It's like there was some guy, he had this Twitter threads. There was going to be a sovereign debt crisis, a banking crisis, a financial crisis. You want to stock up on food and wood. People are calling for mass starvation. Like this is insane. It's absolutely insane. I had when I was in New York a couple of weeks ago, I had dinner with a German friend of mine. He was actually an exchange student at my high school and I hadn't seen him in 31 years and we had dinner together.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“That's fair. That's fair. But like you said, it was down 24 at one point. And it actually went down to like a straight line. You know what I mean? So, yeah. But that's a fair point. That's a fair point.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Right. So I'm just taking a look at prices. So, okay. So right now, U.S. oil, sorry, excuse me, the US oil ETF, which owns a basket of WTI oil futures. I actually think it used to own only the front month, but that they, it was the government told them they had to change it because of when oil went negative in April 2020. So that's down 25%. XLE, which is the basket of ETF basket of companies that drill and produce oil and natural gas, that is down 14% from June, and it had a drawdown of like 24% into July. So it's a 14% drawdown on the actual, it's a, and I believe on the spot commodity, I believe it's worse. Like, yeah, 120 to 83, that's worse. But to have been down that much, you have to have actually own the front month contracts. But let's say I'm on Twitter, you know, my Twitter handle is, you know,”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Like it just doesn't exist, you know. I mean, for a while, we were calling oil like oil coin. Like that was a joke for a while. But it's absolutely true. And here's a thing. Here's a thing. A lot of these energy bowls have shown no contrition at all with this drawdown, no level of introspection at all. They have not publicly said, you know, one thing you could say is, look, my view is temporarily out of favor. I remain bullish. You know, this is a drawdown, but there's no apologies. People are just pretending this isn't happening. And they're leading really a bunch of retail investors off the cliff, you know?”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely, 100%. Yeah. Like you don't find these levels of sentiment in other sectors. Like, you don't have a Twitter account called Utility Rambo. You know what I mean? Yeah. Yeah”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“So, I mean, that's, you know, it was an extreme, you know. So I just, that's, that's kind of how I invest. I would love another opportunity like that, you know. And, you know, when oil got up to 120, I bought puts on XLE. I did it too freaking small. I made some money on it, but like I should have done that a lot bigger.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Well, that was, I mean, that situation was kind of peculiar. We had negative oil. Now, I got long before it went negative. Okay. Like, I'm not saying I picked the bottom. And anybody who says they pick the bottom is a huge asshole because like it went negative for like two minutes. So like that's garbage. So I got long XLE, I want to say when oil was trading around 23 like maybe two months before the crash. So I was a little bit early and I did take a drawdown, but I'm like I mean, it was just kind of common sense like oil at 23 bucks. Like, you just kind of, you want to load up the boat, you know? I mean, they were just giving it away. And eventually they did give it away. Yeah, they paid you to take it. Yeah.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Has turned into the doomsday trade because it's essentially negative one correlated with the SP. So if oil is up, the rest of the market is down. If oil is down, the rest of the market is up. And if you're betting on oil, you're betting on everything else to go to shit. It's the doomsday trade. And people love that stuff.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“The other thing, I mean, you just mentioned being a commodity bull, like, you know, so I've seen this phenomenon a couple times, and like we have a lot of commodity bulls now, and we had a lot of commodity bulls in the 2000s. And the philosophy behind both of these bull markets is predicated on the idea of scarcity or shortages, right? Like we don't have enough commodities. But if you think about it, like if that's your belief, then you're essentially short human ingenuity. Like what you believe is, is that humans are not smart, that we won't be able to grow corn, grow wheat, mine for gold, drill for oil, and we won't be able to relieve these scarcity issues. So it's, you know, I find being a commodity bull, like a very, very pessimistic, a very pessimistic point of view. And, you know, in the oil trade, by the way,”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Not overnight. Yeah, y Yeah, yeah. I say it's not right because it's in the physical world. Like the Fed could buy a trillion dollars worth of mortgage-backed securities in a day if it wanted to. Like it wouldn't, but it technically could. But if you have just a patch of green land, it does take a few months in some cases years. I mean, the more your commanded bull, the longer people say it takes to create a mine or a drilling rig, you know, if you're super bullish in copy, you're like, it takes 50 years to make a mine.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, yeah. I saw an interesting tweet today from Matt Ridley. I don't know if you know who Matt Ridley is, but he's written several books. One of them is The Rational Optimist. He's in the House of Lords in England. And, you know, what's interesting, he said, look, Northern England has like a quadrillion cubic feet of natural gas under the ground. Like, it's there. Like if you wanted to frack for this in Northern England, like the problem would be solved overnight. You know what I mean? I mean, obviously you couldn't do it overnight. It would take some time. Well overnight.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Yes. And in capitalism free markets, it is kind of hard for there to actually be a true shortage. Like up until this point, There's a lack of gas in Europe that's flowing from Russia, obviously, but actually tankers or storage facilities of natural gas are actually right now higher than their five-year average. Why? Because governments companies have been buying tons of natural gas from elsewhere. That's why the price is so high. So there isn't actually a shortage. It's just there's a shortage at levels at prices that we would like. It's just there's not a shortage at 200 euros for Dutch gas. But you're saying if price caps are implemented, then producers would not produce more and consumers would not consume less. So there actually could be a physical shortage of like, there's the natural gas isn't in the tank. It's not where it's supposed to be. Like right now, the natural gas is in the tank. It just costs 10 times higher than it should.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Well, you know, Europe can just say it's illegal for natural gas to trade above a certain price. And with a criminal penalty, like it's just like you can't trade natural gas above a certain price. So price caps are like in capitalism are like the worst thing in the world. They're absolutely the worst thing in the world. And the reason is because if you don't allow prices to rise, prices are a signal. They encourage producers to produce more and they also encourage consumers to economize in ration. So if you cap the price, then those price signals aren't working and you'll continue to have shortages. But the reason why I brought that up in the newsletter is because like people are sort of blind to the fact that this is a real possibility. And if you're long nat gas in Europe and they count”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“I totally appreciate that argument. I just think in natural gas it was last week we reached peak sentiment when the German electricity prices went totally parabolic. They just went vertical. And I think that's when we reach peak sentiment on natural gas. If you look at the charts of the natural gas producers in the US, like you had a top and then another top and now it's coming off, it's a little bit of a double top and it's coming off and it's if you can arb natural gas to the tune of 60 bucks like you would those charts shouldn't be acting like that. You know what I mean? They're actually pretty heavy.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“And then, how are you thinking about natural gas? Because the price of oil, you can drill oil and you can ship it anywhere, and it's relatively cheap to ship. But with natural gas, it's very hard to transport because it has to be liquefied. And so, for example, let me pulled up the stats with the price of a Henry Hub, US gas is just shy of $8. But in Europe, it's $60. So you can make, let's see, $52 by shipping it from Louisiana to the Netherlands. So if you're a company, I'm speaking more about the fundamentals now straying away from the sentiment, but if you're producing natural gas at $2 and you're selling it at $8, and the people who are buying it from you are selling it to people.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Know, it's kind of the same argument with Bitcoin. I mean, there's a lot of people who wrote Bitcoin all the way down. It stuck at $18,000 and they're just going to hold it for five or ten years. But it's going to take a lot longer than people think to reclaim those highs. It's not going to happen this year. It's probably not going to happen next year. It's going to take several years.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“I guess the thing that really gives me conviction on this is that if you talk to anybody in the energy world, right, not naming names, if you talk to the energy bulls, they've taken a 30% drawdown and there's no introspection. Like there's no, ooh, ow. I just took a big drawdown. Shit, maybe I should, you know, close out this position and regroup or whatever. No, there's still like they're unapologetic. Like they're still is insanely bullish as they were before. Now, what they believe is happening is they're taking a drawdown. This is a correction, whether it's technical or sentiment or whatever. I don't think most people know really why this is happening. And it'll go on to make new highs later. Okay. Well.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Anyway, long story short, people are still super, super bullish in energy. So, you know, it's like, I actually, when I'm on Twitter, like I actually blocked an account today called Oil Rambo. And it's like it was a guy who's just like super long oil and he just trolls everybody who doesn't like oil. It's like a troll account. I'm like, it's really like Bitcoin in 2019-20. You have this whole pack of people and it's like $200 or bust. So it's incredible.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Yes. And with regards to oil, there can be a fund or someone on Twitter who bought an oil stock that crashed in March and April of 2020 to a dollar. And because they were lucky or smart or more likely both, they bought a lot of that stock. And now that stock's at $40. And so they have that outlook that you're talking about. And more importantly, let's say it does go from $40 to $20. They're still up $19. They're still up, you know, it's a 20 bagger. But someone who reads their account on Twitter, they're going to be buying at $40 and they should not be thinking that way.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“There's so many stories like that. Like, I mean, you know, I started working in the business in the dot-com bubble, and I can't tell you how many stories of people I heard who started out with nothing, they became millionaires in dot-com stocks, and then they went back to nothing all the time, all the time. Infinity or zero.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“It's a 30% drawdown. It's a massive drawdown. You just lost a huge amount of money. So when people's cost bases are very low, they become more willing to take losses, which means oil has a lot more downside.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“And then you start to get sloppy about your exit point, right? Because you're sitting on all these unrealized gains. So just say for an example, and I know a guy that did this, there's a guy in my new neighborhood where I'm moving. He did this. He's a surgeon. And he's like, yeah, I bought 10 grand worth of Tesla in 2012. Now it's worth a million bucks. We had this conversation like six months ago. I'm like, dude, you should take some profits. Jesus Christ take some profits. You're up a million bucks on this trade. He's like, no, it's going higher. And I'm like, so he's like, if it goes down 30%, it's not a big deal. I'm like, if it goes down 30%, you lost $300,000. Exactly. So people, if their cost basis is very low, they get really sloppy. So when I talk to people in the oil market, they're like, oh, I'm long from negative 37. So, you know, I'm down from 120 to 83. So big deal.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“It doesn't look good for oil. It really doesn't. I mean, keep in mind I look at everything from a sentiment standpoint. Not looking at fundamentals, not looking at technicals, I'm not looking at the chart. I can tell you that with oil down 30%, everybody is just as bullish as they were at 120. They're absolutely just as bullish. One of the reasons they're just as bullish is because of this phenomenon, which I call the low cost basis fallacy. In the low-cost basis fallacy is when you get in early on a trade, it works, it goes way up.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“So people who are betting that the price of oil, the price of natural gas, will continue to explode higher like it did from January to June of this year. Now it's, I believe, WTI crude's at $83. So where do you think this is going?”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Problem, and the other thing is that this is especially true in 2022. Everybody's attitude towards trading is infinity or zero, right? Nobody can ever take profits. It happened with Bitcoin. People bought Bitcoin. They wrote it all the way up like they were never going to sell infinity or zero. They did it with Tesla. Now they're doing it with energy. They're doing it with oil and nat gas, right?”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Everybody was short banks, and then the SEC came in and said no more shorting banks against the rules. And there was this huge squeeze. Everybody got squeezed out. And they just changed the rules. So my guess, I have some ideas. I think Europe is probably going to have to cut a deal with Putin. Maybe they do. Maybe they don't. But let's say they do, like gas prices are going to crash, or they don't cut a deal with Putin and they cap gas prices. Now, capping prices, everybody knows is against free markets. It's a terrible idea. But doesn't mean they won't do it. And if they cap gas prices, speculators get crushed, right? Or they just bring in a shitload of LNG, which I think is already happening. Like I saw something on Twitter today about like 82 ships full of LNG going to Europe. But the point is that when faced with a problem, people always figure it out, right?”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Guess my take on that is whenever you find a situation that is unsustainable, it cannot be sustained. By definition, if something is unsustainable, it cannot be sustained. So there's really, like the people in charge in Europe, I mean, they're politicians, so they're incompetent, but they're not grossly incompetent. Like they're faced with this problem. People not being able to heat their homes. Like they will find a solution. The solution may be bad. But I assure you that the solution will crush speculators, right? Because this always happens in every bear market. Once shorts, once speculators, once bears get control of the market, the government changes the rules. You know, this happened in the financial crisis in 2008.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so this is going to take a while. So just buckle up. Of course. I mean, just the background in Europe. They don't have gas. Okay. So because Russia cut off the gas. So they don't have gas. So, you know, so the price of the existing gas has gone up to like $92 per million BTU or something like that, some unsustainable level. And if people really had to pay that, then they would have to severely ration and basically freeze. Like they would be super cold this winter.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Doom in Europe, and let me read a quote from your excellent newsletter, The Daily Dirt Nap. You say, everyone is gravitating towards the Doom porn, and it's an unsustainable level of doom porn. So what are you seeing? Tell us about how you're seeing the Doom porn in Europe. And I also note that the things that a lot of people are extremely fervent about that you sort of object to and disagree with they have beliefs that you had like a year and a half ago. You know, a year and a half ago you were an energy bull. So it's not like you are an oil hyper bear. I just want the audience to know that. So yeah, tell us what you're seeing in Europe and energy.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Doom sells, but Doom sells a lot more in this environment, you know, with stocks down 20% from the highs, you know, now that we're in a legitimate bear market. Like there were doomed people in 2017, but they were marginalized. You know what I mean? And so it's kind of state dependent, you know what I mean?”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's in the name. But there's a lot of macro doom accounts, and they're dominating the discourse on Twitter. And that really started, I would say, around the beginning, middle of 2021, when the stock market started to roll over. And for sure, like we had bubble-like conditions in the stock market, which they had been warning about for a while. And after they were proven right, you know, and I was sort of part of that, then they became the dominant voice. So now really when you log into Twitter, it's just doom. It is just doom because nobody's in charge, but those are the dominant voices and that's all you hear all day long.”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“Is it going to blow up the world? So that's all people could talk about. The only person who really is still talking about that is Mike Green, but we've moved on. Like nobody cares. Like we've moved on. And then from 2019 to 2021, it was crypto. So I would say at the center of that was Anthony Pompeliano, like Pomp. Like he was the king of Twitter from 2019 to 2021 plus all the associated characters in crypto. And now they've all been discredited. And now it's, I call it the macro doom crowd, right?”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT
“So, just for a little history on Twitter, like Finance Twitter, Finn Twit, okay, like there's nobody in charge. Nobody's in charge of FinTwit. The inmates are running the asylum. But at various points in history, there's a dominant voice or group of voices. You know what I mean? So if you were on FinTwit from like 2016 to 2019, you probably remember that the dominant voice on Twitter was Ritholt's wealth management. So Josh Brown, Michael Batnick, Ben Carlson, like that whole group of guys. And really that was when the bull market was in full swing and it was all about indexing. And if you remember, we were having these big arguments about indexing back then. Like that, that was the thing that everybody liked to argue about. Is indexing good? Is indexing bad?”
2022-09-15 · Forward Guidance · The Energy Trade Has Gone Too Far | Jared Dillian · IDENTIFIED FROM THE TRANSCRIPT