Ricky Ho

For the record, I am currently LONG #oil, because I think the market continues to underestimate not only how long the U.S.-Iran war can persist, but also how asymmetric the oil market becomes if the conflict drags on and one of the remaining shock absorbers fails. Right now, crude is repeatedly selling off whenever there is another diplomatic headline or incremental improvement in Saudi exports, with Brent recently retreating toward $100 as markets priced renewed U.S.-Iran talks and partial normalization of Gulf flows, but I think the market may be assigning too much probability to a relatively clean political resolution and too little probability to a prolonged conflict where infrastructure continues to be damaged, shipping remains impaired and the cumulative depletion of inventories gradually becomes more important than the daily headlines. The structural backdrop was already constructive before the war, because years of capital discipline across the oil industry have left the system with less redundancy than investors became accustomed to during previous cycles, while long-cycle supply takes years to develop and the market increasingly depends on a relatively small number of producers, transport corridors and spare-capacity holders to absorb disruptions. The current conflict is now stress-testing exactly those buffers, and Shell and Equinor have recently warned that the energy market’s traditional shock absorbers are weakening as inventories are drawn down, logistics become more difficult and infrastructure disruptions accumulate. The Strategic Petroleum Reserve is another important part of the thesis, because the U.S. emergency stockpile has fallen to roughly 285 million barrels, its lowest level since 1982, versus authorized capacity of more than 700 million barrels, meaning Washington has materially less emergency inventory available than it once did and will eventually have to rebuild that buffer rather than continuously use it to suppress price spikes. The administration has already discussed replenishing the SPR, including through arrangements involving Venezuelan supply, but rebuilding hundreds of millions of barrels is itself future demand for crude and will be difficult to accomplish aggressively without competing with commercial buyers. Then there is the geography. Hormuz remains the obvious tail risk, but the problem is increasingly broader than one strait because the war has demonstrated that pipelines, refineries, tankers, export terminals and alternative routes can all become targets, while freight and insurance costs can explode even when the physical barrel technically remains available. Saudi Arabia has managed to increase some Gulf exports through alternative loading arrangements, which has temporarily relieved the market, but that should not be confused with restoring the system to normal. The refined-product market may actually be telling the more important story, because diesel prices have reached extreme levels while refinery disruptions and logistical constraints reduce the system’s ability to turn crude into the products the economy actually consumes. A crude market can look adequately supplied on paper while diesel, jet fuel or gasoline becomes genuinely scarce, and once product shortages feed into trucking, agriculture, manufacturing and transportation, the economic consequences become much larger than the headline Brent price alone suggests. This is why I think the risk distribution for oil remains heavily skewed to the upside. My base case does not require Hormuz to become completely inaccessible or Middle Eastern production to collapse; it simply requires the conflict to last longer than the market currently expects, inventories to continue being consumed, the SPR to remain depleted, infrastructure repair to take time and spare logistical capacity to gradually disappear. The really interesting scenario is the right tail. Oil markets often look surprisingly calm until participants suddenly realize that the buffer is gone, and once refiners, governments, airlines, shipping companies and commodity traders simultaneously decide that they need physical barrels rather than financial exposure, the behavior changes from price-sensitive buying to availability-sensitive buying. That is when moves can become nonlinear. A refinery that needs crude to remain operational cannot simply wait six months for a cheaper price. A government worried about energy security does not optimize entry points. An airline cannot hedge away the absence of jet fuel. And a country that suddenly realizes its strategic inventories are inadequate starts caring much more about securing molecules than saving $5 per barrel. If the market begins seriously pricing a scenario involving prolonged war, persistent Hormuz disruption, additional attacks on Saudi infrastructure, lower effective spare capacity and further inventory depletion, I would not be surprised to see crude eventually make a parabolic move driven by desperation rather than ordinary incremental demand. That does not mean oil goes straight up, because diplomacy remains the obvious downside risk and every credible ceasefire or restoration of Gulf flows can produce violent corrections, but that volatility is exactly why I think the market is mispricing the distribution: investors remain focused on today’s barrels while I am increasingly focused on how many shock absorbers remain six months from now if the war is still going. For now, I remain LONG oil. The market is pricing a difficult war. I think it should be pricing the possibility of a long one.

For the record, I am currently LONG #oil, because I think the market continues to underestimate not only how long the U.S.-Iran war can persist, but also how asymmetric the oil market becomes if the conflict drags on and one of the remaining shock absorbers fails. Right now, crude is repeatedly selling off whenever there is another diplomatic headline or incremental improvement in Saudi exports, with Brent recently retreating toward $100 as markets priced renewed U.S.-Iran talks and partial normalization of Gulf flows, but I think the market may be assigning too much probability to a relatively clean political resolution and too little probability to a prolonged conflict where infrastructure continues to be damaged, shipping remains impaired and the cumulative depletion of inventories gradually becomes more important than the daily headlines. The structural backdrop was already constructive before the war, because years of capital discipline across the oil industry have left the system with less redundancy than investors became accustomed to during previous cycles, while long-cycle supply takes years to develop and the market increasingly depends on a relatively small number of producers, transport corridors and spare-capacity holders to absorb disruptions. The current conflict is now stress-testing exactly those buffers, and Shell and Equinor have recently warned that the energy market’s traditional shock absorbers are weakening as inventories are drawn down, logistics become more difficult and infrastructure disruptions accumulate. The Strategic Petroleum Reserve is another important part of the thesis, because the U.S. emergency stockpile has fallen to roughly 285 million barrels, its lowest level since 1982, versus authorized capacity of more than 700 million barrels, meaning Washington has materially less emergency inventory available than it once did and will eventually have to rebuild that buffer rather than continuously use it to suppress price spikes. The administration has already discussed replenishing the SPR, including through arrangements involving Venezuelan supply, but rebuilding hundreds of millions of barrels is itself future demand for crude and will be difficult to accomplish aggressively without competing with commercial buyers. Then there is the geography. Hormuz remains the obvious tail risk, but the problem is increasingly broader than one strait because the war has demonstrated that pipelines, refineries, tankers, export terminals and alternative routes can all become targets, while freight and insurance costs can explode even when the physical barrel technically remains available. Saudi Arabia has managed to increase some Gulf exports through alternative loading arrangements, which has temporarily relieved the market, but that should not be confused with restoring the system to normal. The refined-product market may actually be telling the more important story, because diesel prices have reached extreme levels while refinery disruptions and logistical constraints reduce the system’s ability to turn crude into the products the economy actually consumes. A crude market can look adequately supplied on paper while diesel, jet fuel or gasoline becomes genuinely scarce, and once product shortages feed into trucking, agriculture, manufacturing and transportation, the economic consequences become much larger than the headline Brent price alone suggests. This is why I think the risk distribution for oil remains heavily skewed to the upside. My base case does not require Hormuz to become completely inaccessible or Middle Eastern production to collapse; it simply requires the conflict to last longer than the market currently expects, inventories to continue being consumed, the SPR to remain depleted, infrastructure repair to take time and spare logistical capacity to gradually disappear. The really interesting scenario is the right tail. Oil markets often look surprisingly calm until participants suddenly realize that the buffer is gone, and once refiners, governments, airlines, shipping companies and commodity traders simultaneously decide that they need physical barrels rather than financial exposure, the behavior changes from price-sensitive buying to availability-sensitive buying. That is when moves can become nonlinear. A refinery that needs crude to remain operational cannot simply wait six months for a cheaper price. A government worried about energy security does not optimize entry points. An airline cannot hedge away the absence of jet fuel. And a country that suddenly realizes its strategic inventories are inadequate starts caring much more about securing molecules than saving $5 per barrel. If the market begins seriously pricing a scenario involving prolonged war, persistent Hormuz disruption, additional attacks on Saudi infrastructure, lower effective spare capacity and further inventory depletion, I would not be surprised to see crude eventually make a parabolic move driven by desperation rather than ordinary incremental demand. That does not mean oil goes straight up, because diplomacy remains the obvious downside risk and every credible ceasefire or restoration of Gulf flows can produce violent corrections, but that volatility is exactly why I think the market is mispricing the distribution: investors remain focused on today’s barrels while I am increasingly focused on how many shock absorbers remain six months from now if the war is still going. For now, I remain LONG oil. The market is pricing a difficult war. I think it should be pricing the possibility of a long one.

Updated return figure: $MSFT +33.5%, $META +30.8%, $AMZN +7%, $GOOG -2% in less than three months! Not bad of an investment return just from reading my thought and yapping. Easy money. I don’t need dumb followers tho, please stay away from this account. https://t.co/uehXehmqBW

Nasdaq hits a new ALL TIME HIGH, crossing 27,200 for the first time in history. JCI when? 👻👻👻👻

@stefcooper AMMN, META, AAPL, SKHY just browse my timeline

Meta was up 11% overnight. Told you so. I’ve been saying for a while that the market was underestimating Meta’s ability to monetize AI across advertising, recommendations, messaging, and its enormous consumer distribution. Sometimes you can just smell money in a stock before the market fully catches on. And with $META, I still think there is more to come.

Prediction: consumer AI over the next five years will increasingly be won by Meta and Apple. Apple has the strongest position at the hardware and operating-system layer. It controls the iPhone, Watch, AirPods, Mac and potentially whatever comes after the smartphone, giving it the ability to make AI ambient, personal and deeply integrated into the device rather than something users consciously open as a separate app. If Siri materially improves under the next phase of leadership and product execution, Apple does not need to win the frontier-model race. It simply needs to make AI useful across the hardware ecosystem that more than a billion people already live inside. Meta has the opposite advantage: distribution to the mainstream consumer. Instagram, WhatsApp, Facebook and Messenger already sit in front of billions of people every day, and Meta effectively owns one of the largest customer-acquisition engines in the world through its advertising platform. It can push an AI product to users at a marginal acquisition cost that would be almost impossible for a standalone AI company to replicate. That is why I increasingly think the consumer AI race will not necessarily be won by whoever has the smartest model. It may be won by whoever controls the device, distribution and default user interface. Apple controls the device. Meta controls the social distribution. Both already have enormous installed bases, trusted consumer brands, monetization engines and the ability to subsidize AI adoption for years if necessary. The frontier-model labs may continue producing extraordinary technology, but consumer technology has repeatedly taught us that distribution eventually matters as much as raw technical superiority. My five-year bet is increasingly simple: Apple owns the personal AI hardware layer. Meta owns the consumer AI distribution layer. Long $AAPL and $META.

The new Finance Minister, Suahasil Nazara, is walking straight into a very difficult global macro test. The US 10-year Treasury yield has already breached 5%, Brent is hovering around US$108/bbl, and markets are now pricing a Fed rate hike with further tightening risk ahead as inflation remains stubborn. For Indonesia, this combination is particularly uncomfortable because the shocks reinforce each other. Higher US yields increase the hurdle rate for owning Indonesian bonds and put pressure on the rupiah. Higher oil worsens Indonesia’s import bill, raises subsidy and compensation costs, pressures the current account, and ultimately increases the probability that the government has to adjust subsidized fuel prices. If that happens, inflation rises and household purchasing power weakens, leaving Bank Indonesia even less room to ease. And this is where the 2027 budget assumptions are starting to look increasingly stale before the year has even begun. The government is building RAPBN 2027 around 6.0% GDP growth, Rp17,500/USD, a 6.9% 10-year SBN yield, 2.5% inflation and ICP of only US$75/bbl. Compare that with today’s environment: US Treasury 10Y: ~5% Brent: ~US$108/bbl 2027 SBN assumption: 6.9% 2027 ICP assumption: US$75/bbl If US yields remain around 5%, a 6.9% Indonesian 10-year yield would leave only around 190 bps of nominal spread over Treasuries. At the same time, oil is already more than US$30/bbl above the budget’s crude assumption. That is a very narrow margin for error. The most dangerous part is that these risks are correlated rather than independent: Oil up → current account weaker → rupiah weaker → imported inflation higher → BI stays tighter → bond yields higher → growth weaker → fiscal arithmetic deteriorates. So Suahasil’s first test will not be writing a new policy slogan. It will be deciding which assumptions need to be revised when reality refuses to cooperate. A technocratic Finance Minister is certainly preferable in this environment, but credibility will come from acknowledging the arithmetic rather than defending numbers that the market has already moved beyond. The 2027 budget was written for a much friendlier world. That world may already be gone.

Brent is up around 4% and has moved above US$105/bbl at the time of writing. And it feels like there may still be more upside ahead. At these levels, the market is no longer dealing with a normal geopolitical risk premium. If supply disruption fears keep building, the repricing can become nonlinear very quickly. For oil-importing economies, this is where the macro pressure starts to compound: higher import bills, wider subsidy burdens, inflation risk, weaker current accounts, and more pressure on currencies. US$105 Brent is already uncomfortable. The bigger question is whether this is the destination, or just another stop on the way higher. At this point, it increasingly looks like the latter.

Sk Hynix is up 32% in the past 1M. More to come 🚀🚀🚀🚀 https://t.co/tluIuTUkGO