I've been looking at the situation in Hormuz, reading various articles, observing US politics, and the start of this, the fundamental thesis is that I think oil has probably hit peak. Once a commodity reaches a certain price, people will put in a lot more effort to transport it. I'm reading about tankers carrying fuel over land, other ports being used, and that's before we get into additional production. And looking at the political situation in the USA, the pressure is already on Donald Trump from his own party and after the midterms, that's going to get to be extreme.
So, I asked one of the LLMs to give me some stocks of companies that were barely hedged on fuel. And examined them. These are companies that have taken a huge beating to their stock price since the war. I only wanted profitable companies, and where the P/E is now very cheap because of the effect of oil. Where the fear is all priced in, so as the oil price falls, the stock price should rise.
I decided to invest in 3 companies: Carnival Corporation Limited ($CCL), Norwegian Cruise Line ($NCLH) and Wizz Air (£WIZZ). These are all unhedged or barely hedged so have taken the biggest hits. Carnival down 28%, Norwegian down 43%, Wizz down about 20% since the war started (but I also think Wizz are value for other reasons like problems with their engines that are being resolved and the continued growth of Eastern Europe).
I think there's a nice discount to entering longer-term investments in these companies.