Retrospective on 2018 "Short the Permian": FLOW's Results-Based Approach
In 2017, I used a true data-driven approach to come to a bold investment conclusion: The Permian Basin equities were the biggest short I had seen in any asset class in a decade. As an experienced manager, I decided to raise a fund around the thesis.
When I recently re-posted these slides to Twitter, I got the biggest response I’ve ever received. I’m reposting them here, errors and all. Engineers will bristly at some of my 2017 parlance, but why didn’t the engineers get the answer right?
With no data systems, we got the right answer, because we thought like fiduciaries. When we started FLOW, we decided to scale these human processes with technology to apply our good judgement 100x faster.
This slide deck was viewed as “NOT CREDIBLE,” because it was not consensus. We believed it was differentiated and supported by fact. As a result, I was kicked out of famous managers’ offices, cursed at, and even offered an “internship” as an insult.
Market prices are never kind. We judge ourselves like investors - by price.
We were right.
Where were the reserve auditors, engineers, CEOs, analysts, data providers and people of credibility?
We would like to share these slides as a very clear example of why we are different: we build for RESULTS. We are light years ahead of this work now in 2020! Catch up with us!
The slides that follow are old. They are no longer forward looking. This is not investment advice. Also, they are almost as harsh as the stock price performance.