Hello Friends and Family,
As many of you know I left JP Morgan in early June and am launching Cayler Capital LLC, an Energy Focused Hedge Fund, in the Fall. It was a tough decision as my time at JP Morgan was a great learning experience and I had the opportunity to work with some very talented individuals. One of my favorite quotes is ‘Luck is what happens when preparation meets opportunity’ and I think that is very prescient with the ‘luck’ I’ve enjoyed with launching my new fund.
The opportunity is that we have just experienced one of the greatest shakeouts ever in the oil markets and my long term supply and demand model is indicating that we are approaching a supply deficit. We have cut over $250 billion in capex since 2014 and have now entered the rebalancing phase. The long term prices in the oil markets do not align with the cost of production needed to satisfy demand, thus giving a tremendous buying opportunity.
Alongside the longer term model I will be trading three proprietary fundamental models and three technical models. The fundamental models will focus on pipeline flows, refinery cracks, time spreads, total inventory, physical arbitrage, and macroeconomic indicators. The technical models will focus on the technical aspects of price discovery and will utilize trend following techniques, DeMark Indicators, pivot points, Fibonacci levels, and a multitude of proprietary relationships in the oil markets.