Latest / Money Grows on Trees / #302 - How To Make A FORTUNE From Trumps Takeover
Transcript
- 0:00Trump just gave you a way to make a fortune, and 99% of investors
- 0:03will completely miss it. Most people hear Trump
- 0:07and Venezuela, and they think politics, they think chaos, and
- 0:10they think it's got nothing to do with them. But if you knew what to look for,
- 0:14you'd see something completely different. you'd see oil, you
- 0:18would see power, you would see sanctions lifting, and
- 0:21you'd see one company, just one, that's positioned better than
- 0:24anyone else on the planet to make billions from this
- 0:28shift. I'm talking about the largest proven oil reserves in
- 0:32the world. a company that's already on the ground and a political realignment that
- 0:36just changes absolutely everything. So in this video,
- 0:39I'm going to show you exactly why this company is about to print
- 0:42money and how you can position yourself to profit before the
- 0:46rest of the market wakes up. It isn't speculation, this is
- 0:49structure, this is positioning and this is incentives. I'm
- 0:53Lloyd James Ross, seven figure investor and entrepreneur and I've helped thousands
- 0:56of business owners and professionals turn financial stress into
- 1:00success. If you're stuck in old money habits, overwhelmed by investing
- 1:03or unsure where to start, this is for you. I'll give you the mindset
- 1:07and strategies to take control, grow your wealth and achieve
- 1:11financial freedom. It's time to make your money work for you.
- 1:14Why Venezuela suddenly matters again. So
- 1:18Venezuela isn't just another struggling country. It sits on
- 1:21the world's largest proven oil reserves of heavy crude
- 1:24on the planet. Here's the problem. Years of
- 1:28sanctions by the states have crushed the oil production there. The
- 1:32infrastructure has been dilapidated, it's collapsed, capital has fled, and
- 1:35oil output fell from three to four million barrels a day to a fraction of that.
- 1:39But here's the reality. The oil is still there. The
- 1:43US still wants energy security, particularly against China. And
- 1:47global supply remains tight, and demand's going up and
- 1:50up and up and up. A political shift changes everything when it
- 1:53comes to oil. So why has the Trump administration changed
- 1:57the game here? Well, Trump's always been energy first. You
- 2:00know, drill, baby, drill. And certainly America first. So
- 2:05here's why that matters. Trump's prioritizing cheap,
- 2:09reliable oil supply. And he's far
- 2:13more willing to cut deals and enforce a long-term isolation of that than anyone else.
- 2:16He wants to weaken it geopolitically against China and
- 2:19Russia by controlling energy flows, particularly in Venezuela. So
- 2:23if Venezuela reopens under a Trump framework, which it looks like it will be,
- 2:27it won't be charity. It will be absolutely transactional. And
- 2:30that means the US companies get in first. And he just recently had
- 2:33a meeting with those US companies, and he had them all
- 2:36in the Oval Office. He brought them in, and they're all there. Mobil, Exxon
- 2:40Mobil, Chevron, ConocoPhillips, all the major oil companies,
- 2:43particularly in the United States. And so he's
- 2:47wanting, and he said this many times in the past, he's
- 2:51wanting oil to be cheap. And
- 2:55so that's better for the everyday American, who
- 2:58he stands for, right? But most importantly, he also knows
- 3:02that if he didn't do what he did with Venezuela, China
- 3:06was about, in fact, China was already there on the ground. They'd
- 3:09already sent diplomats to negotiate oil deals with Venezuela as
- 3:14they bombed, sorry, as they kidnapped the
- 3:19dictator of Venezuela. So he
- 3:22made a mark. And the reason why he wanted to do that is because he knew if he didn't do it,
- 3:25China was about to take the oil. If you think about this, what has happened
- 3:29in the world is there's a massive race to AGI, basically
- 3:33artificial general intelligence. And everybody knows that
- 3:38the country who achieves AGI first wins. What's
- 3:41this got to do with oil, right? And the reason why it's got
- 3:44to do with oil is because you can't build data centers. You can't build,
- 3:48well, you can't really build anything and develop anything without oil. A
- 3:51lot of people don't realize that feedstock, which is all the things required to create
- 3:55plastics and build anything
- 3:58in the world, is all about oil. If we look at who produces the most oil,
- 4:01it's the United States. So they're very oil-thirsty. However, China
- 4:05is certainly oil-thirsty as well. So China's
- 4:09intention was to take or do a deal with
- 4:12Venezuela to take all the heavy crude and send
- 4:15it out to China. So China was buying the heavy crude from Venezuela. And of
- 4:18course, they're buying it from Russia. So both the United States and China
- 4:22have got this thirst, endless thirst for oil. And
- 4:25so Trump and the administration is like, well, if Venezuela is in our backyard, it's
- 4:29right below us. This is our backyard. And China's coming to
- 4:33take the oil from our own backyard. Are you kidding me? That ain't going to happen. So
- 4:37what they did was they took matters in their own hands. They went and they kidnapped
- 4:40the dictator of Venezuela. in
- 4:44an incredible move by the special forces. And they
- 4:47then now have taken over effectively Venezuela. And
- 4:50Venezuela was sending oil money to Cuba. So now Cuba's in trouble and
- 4:54it's destabilized that region in terms of the deals that were
- 4:57happening. And it certainly put a wrench in the
- 5:00spoke of China's wheel on its bike. So now
- 5:04the US does control Venezuela,
- 5:08which has got arguably, in fact, it has, I think it's to the
- 5:11tune of about three I want to say 300 billion
- 5:18barrels of oil there. But it's heavy crude. And
- 5:22what I mean by that is heavy crude is not easy to refine. And
- 5:26heavy crude is more used in jet fuel, rocket fuel, and
- 5:29feedstock. But it's super important. And so what's
- 5:34interesting about that is that now that Venezuela has been taken over, Trump's
- 5:38like, well, now how do we get the oil out of the ground? Because as I said, the infrastructure is
- 5:42dilapidated. There's not a lot of security on the ground there. Even
- 5:46ExxonMobil, the CEO of Exxon in the office of Trump the other day, said,
- 5:49hey, it's actually uninvestable. And Trump's like, well, ExxonMobil is
- 5:52not getting in there. So they went on board. But it tells you
- 5:56that there's oil in the ground, but it's like, how do we get it
- 5:59out? And so I think what's going to happen is
- 6:02the companies that can successfully do that are going to
- 6:05be best positioned right now. So out of all the oil companies, let's have a look at the oil companies
- 6:09for a second. This is important for you to understand. There was a company once founded
- 6:12by John D. Rockefeller, the richest man in the world. And he developed
- 6:16and founded and scaled a company called Standard Oil. And Standard Oil,
- 6:20at one point in time, cornered the market and really owned
- 6:2485% of the refining market. Can you believe that? 85% of
- 6:27the oil refining market was owned by John Deere Rockefeller. That's why he became the richest man in the world.
- 6:31And once upon, well, about in the thirties or forties, they went through an antitrust.
- 6:34It might've been in the early thirties. They went through an antitrust court case where
- 6:38they broke up John D. Rockefeller's company, Standard Oil, and they broke it
- 6:41up into different companies. And the companies that have
- 6:44ventuated from that are ExxonMobil, Chevron,
- 6:52I believe some versions of Shell, but basically it's all progeny
- 6:57of Standard Oil. And so the largest oil companies in the States
- 7:01are real progeny of Standard Oil. And Chevron is one of those. In
- 7:04fact, Chevron is arguably one of the biggest. It's not quite as
- 7:07big as ExxonMobil, which is the biggest, but Chevron would have to
- 7:10be the second biggest and one of the most well-known brands when it comes to
- 7:13oil. It's a very fully integrated oil company. And
- 7:17it explores oil, drills for oil, it refines oil,
- 7:21and it also distributes oil through its products and its service stations as well.
- 7:24So it's what's called a fully integrated oil
- 7:28producer and refiner. And it is a powerful company.
- 7:32And here's why Chevron specifically is positioned perfectly
- 7:37to actually take advantage of this Venezuela situation, right? Chevron
- 7:40isn't just hoping to enter Venezuela, right? They're actually already there.
- 7:45They're on the ground. In fact, Chevron has been in Venezuela for 100 years.
- 7:49So even with the sanctions, Chevron decided to do some
- 7:52deals there and stay on the ground, right? So Chevron's got lasting,
- 7:56long-standing joint ventures in Venezuela already. It already understands the
- 7:59fields. It already understands the geology. It already understands and has the logistics in
- 8:02place. It's got existing relationships and obviously, as I said, it's
- 8:05got a huge operating history there. So it can scale faster than any
- 8:09new entrant straight away, right? So as the sanctions start to loosen, and
- 8:13we all know speed wins, Chevron doesn't need to start from zero. So
- 8:18as I said, what makes Chevron effective in that space is it's got
- 8:22first mover advantage, but also it's an integrated fortress. So
- 8:25it's got this massive advantage of not just being, not just pulling
- 8:29the oil out of the ground there, which they're great at, right? It's going to be
- 8:32the matter of they can take it, they can refine it, et cetera. So
- 8:35here's what happens to Chevron. It produces oil. upstream
- 8:39so up there's two parts of oil the oil industry
- 8:43in oil companies there's upstream which does the exploration and
- 8:47drilling extracts it from the ground and then there's downstream
- 8:51which is actually the refining. So they take the crude, the core
- 8:56product, and they refine it into multiple different things, incidentally. Just
- 8:59to give you an explanation of what it can do, oil can be refined into what's
- 9:03called heavy. If it's heavy crude, which is what's in Venezuela, they can
- 9:06develop heavy crude for feedstock, for jet fuel, and
- 9:11for aeroplane fuel and for plastics, et cetera, it's
- 9:15really good. And bitumen, so asphalt and bitumen, which is a very important
- 9:18part of the construction industry. So all of our roads, asphalt,
- 9:22bitumen, so it comes from heavy crude oil. It's the hardest to refine, but
- 9:26what it does as well, it takes the oil and it refines it into, it can refine
- 9:29it into light crude as well, depending on the, beginnings
- 9:34of what the product looks like and from there it can also develop it into kerosene
- 9:38it can develop it into petrol as we know it like gasoline it
- 9:41can also develop it into gas,
- 9:45natural gas. So there's all these layers of the refining process that
- 9:49it can develop and then you can sell all these products, right? So
- 9:52the thing with Chevron is it produces upstream, so it drills and explores. Explores
- 9:56and drills, I should say. Gets it out, refines it, which is the downstream. It
- 9:59owns that too. And it also transports to markets and distributes it
- 10:02across the globe. So it makes money. It's
- 10:06fully vertically integrated as a oil company, which is
- 10:10what makes it an absolute fortress in the world, right?
- 10:14Inarguably the most important product in the world. And if you don't think oil
- 10:17matters, I have some news for you. If oil didn't
- 10:20exist, we would all pretty much perish and die. Why? Because
- 10:25not only are all the product like this desk, everything you
- 10:28see on my desk has got oil in it. Everything, everything,
- 10:34this oil, people don't realize this. And
- 10:37they're like, oh, oil's bad, really? And the other thing too is it powers
- 10:41all of the machinery for large-scale farming that creates
- 10:44all of our food. So if you don't have oil, bye-bye food. Billions
- 10:49of people starve. Just quickly, if you're ready to take control of your finances but
- 10:52feel stuck on where to start, I have a solution. My
- 10:55book, Money Bias Happiness, simplifies investing and
- 10:59wealth building with practical steps to help you achieve financial peace.
- 11:03Get your copy via the link in the show notes and let's get your money working for
- 11:06you. Now back to the episode. You have to understand that Chevron's got
- 11:09a very long history. In fact, Chevron's been around since the 1800s effectively. very
- 11:14long-standing company, very safe, very effective company,
- 11:18which is why Warren Buffett, he's got 7% of
- 11:21his portfolio allocated to Chevron stock and also in oxy. So about
- 11:2511% to 12% of Warren Buffett's Berkshire portfolio, which is worth
- 11:30a bank, the portfolio is about $280 billion. So $30 to
- 11:34$40 billion is allocated to oil. So that's a little bit of a
- 11:38little tip. That's why he sees Chevron as the
- 11:41leader at the moment in the oil industry. So why
- 11:45this matters for the likes of Venezuela, right? So
- 11:49going back to the type of oil that's there, it is crude oil.
- 11:52It's heavy and complex crude. So it requires very specialized refining.
- 11:57So smaller players can't handle it efficiently, right? And so Chevron can,
- 12:00because Chevron has got the ability to pull out heavy crude and refine
- 12:04it. And so what that means for Chevron is if it already knows how to do it, it's
- 12:07already there, they're already on the ground, more or less what's going to happen is they're going to have better
- 12:10margins because there's less cost to extract it straight away. There's lower friction,
- 12:14there's faster monetization. So they're way better positioned than
- 12:17any other oil company to go and extract it and put and sell it and make money.
- 12:21And the other thing too is that they're very, the
- 12:25lower cost you can pull oil out of the ground and refine it and sell
- 12:28it, because there's costs all along the way in that integrated business model.
- 12:31But if you can have the lowest cost to extract it, you
- 12:35literally just, you're untouchable, right? So
- 12:39low cost producers in a commodity driven business, win
- 12:42every single cycle, right? And oil is a commodity, right?
- 12:46Oil, it is, it's a commodity. A barrel's a barrel. Like a barrel of
- 12:49oil now is about 60 US dollars. And so it
- 12:52will fluctuate. It can go up to a hundred, which it was. It can go, I mean, back
- 12:56in 2020 after COVID, it actually went to negative. In fact, they were paying
- 12:59you money to store oil as well. They've given it away. That's the
- 13:02first time I think in recorded history that's happened like that. But with
- 13:06commodity driven businesses, the lowest cost producer always wins. So Chevron's
- 13:09strength, is extremely low breakeven
- 13:13costs. Massive cash flow, even at the lowest oil prices.
- 13:17So as all the juniors are starting to go bankrupt, which
- 13:20they pretty well do, they pretty much go broke at like $50 to
- 13:25$40 a barrel, which is kind of where it's oscillating at the minute. So a lot of them are struggling. They're not
- 13:29even drilling right now. So a lot of the demand for oil is growing. It
- 13:32is. The world needs more oil, especially with the AI boom. It's like this
- 13:36thirst for oil like never seen before. But because the price
- 13:39of oil at a barrel is low, no one's drilling, which means the supply
- 13:43of oil is dwindling. And if you understand what that means, if
- 13:46supply is low and demand is high, we're going to see a massive oil
- 13:50boom. Warren Buffett says that when oil goes back
- 13:53and booms, it goes to the next cycle, which he knows it will. That's why he's positioned there. He said it's
- 13:57not going to go back to $100. He anticipates it's going to
- 14:00go beyond $200 a barrel. There you go.
- 14:04The ability for Chevron to operate, not only in Venezuela, but
- 14:07in general, at a cost that's way below everyone
- 14:11else of its competitors, it's going to survive. And it may even start buying up
- 14:15the juniors that go broke. That's what's effective about that company. So
- 14:18what happens? What does this mean when Venezuelan supply increases, right? Well,
- 14:22firstly, Chevron survives this price pressure that's happening. And
- 14:26that will happen if there's more supply come online, right? High cost
- 14:29competitors don't survive, it wins market share, it consolidates. And
- 14:34that's what makes it an incredible company. But here's the
- 14:37hidden cash flow that nobody really understands and
- 14:41talks about. Chevron already generates massive amounts of
- 14:44free cash flow. In fact, they just did an investor day where Mike Worth,
- 14:48who's the CEO of Chevron, incredible leader, they literally, and
- 14:51you can find this on YouTube as well. It's like sending someone to another channel. If
- 14:55you watch it, they talk about in the next five years, it's going to create substantial amounts
- 14:59of free cash flow, give it back in dividends and share buybacks all to
- 15:02the shareholders, because they don't have to use all this money to
- 15:07drill new wells and explore. That's already
- 15:11been done. All the cash flow has been spent. Now they just get to print money. And
- 15:15if the price of oil doubles from here, they're going to print so much free
- 15:18cash flow. It's going to be crazy. So as Venezuela then
- 15:22reopens, it adds incremental production with that massive new R&D
- 15:25spend for them, because they're already there. The existing infrastructure is pretty much on
- 15:28the ground. It's going to reactivate it. And the cash flow growth, as
- 15:31I said, will happen without balance sheet stress of having to spend any more money.
- 15:35That's the holy grail. That's more cash without more
- 15:38risk. and why this again benefits shareholders directly,
- 15:42guess what? Chevron is so good at distributing
- 15:46wealth to its shareholders. It doesn't waste cash. It's very capitally
- 15:49disciplined. Is that a word, capitally disciplined? The capital priorities
- 15:53are, and they've outlined this in the last presentation
- 15:57to show, only like probably a month and a half ago. They'll grow the dividend. It's
- 16:01already high. It's already almost 5%. In fact, the dividend is probably 4.5% right
- 16:04now as I record this. That's
- 16:08very high, four and a half, it's what you can get at the bank, right? And
- 16:12they're going to grow it. And they've grown that dividend for something like, I
- 16:15think it's off the top of my head, it's like 35 years they've had dividend growth,
- 16:18consecutive yearly dividend growth. Wild, right? That's
- 16:21something like a CAGR of like five or 6%, so more than the rate of inflation. So
- 16:26it's going to get progressively better and better and better. They maintain a fortress
- 16:29balance sheet, so they manage their debt really well. Of course, when they got free cash flow,
- 16:33they'll buy back shares. So it eliminates the shares that are already there and makes your shares even
- 16:36more valuable. And it acquires very high quality assets
- 16:40at a very low cost. So, I mean, it's set to just
- 16:43dominate, which is why Warren Buffett's got such a big position in the company, right? So,
- 16:47more cash from Venezuela, which will happen for them. Higher dividend safety,
- 16:51faster dividend growth, more buybacks and stronger long-term compounding
- 16:55from the underlying shares, right? And this
- 16:58is how oil wealth can turn into shareholder wealth
- 17:02for you, right, as an example. And I think a lot of people mistakenly think
- 17:05that if you're going to get into the oil business, you have to own the actual
- 17:08commodity itself. That's not how I've seen the
- 17:12major investors do it. That's not how I do it. If you ever want to be
- 17:15in the commodity game, it's about owning the company that mines, refines
- 17:18and sells. that particular commodity. That's how Warren Buffett plays the commodity,
- 17:22I shouldn't say plays the commodity market, but positions to make money
- 17:25from the commodity market. And that's what I'm talking about right now in this episode,
- 17:29right? So why is Chevron still at a reasonable price? Why is it
- 17:32still paying a 5% dividend? Why isn't it just exploiting, right? And what happens
- 17:35is the market lumps all the oil companies together. They're
- 17:39like, oh, it's just, they're all the same. And they're not, right? They also
- 17:42obsess over ESG headlines. That's for like environmental safety
- 17:46guidelines. Like it's the environmental impact. They're like, oh
- 17:50my god. One time, Exxon Valdez spilled oil. And it's not
- 17:53great. It sucks. I
- 17:57think you can go overboard with ESG, right? That's what happens. And so they underestimate
- 18:01how slow the energy transition actually moves. They
- 18:06miss how, they certainly miss how durable oil demand still
- 18:09is. In fact, it's going up from the AI boom, as I said, how critical heavy
- 18:13crude remains with all the bitumen, all the asphalt required and all the other
- 18:16things in feedstock it's needed for. So it's like heavy crude
- 18:20is the last oil that will ever not be needed. And I
- 18:23would anticipate that we'll need it for another 100 years at least. I just
- 18:26don't see it. It's not easily disrupted by
- 18:29renewables. This is not. how advantaged Chevron's
- 18:33position actually and truly is, because a lot of people don't even realize that they're the
- 18:36only oil major that's on the ground in Venezuela. And how policy shifts
- 18:40can be absolute asymmetric winners when you're investing. Okay, so this is
- 18:44all the due diligence that you have to understand when you're investing. This is why most people should
- 18:47just buy an index fund and call it a day, because this is what's required. It's
- 18:50so interesting to position yourself in a place where there's not much
- 18:54competition, right? So Chevron's not just another oil company, it's best in
- 18:58class. Yes. The risk everyone needs to acknowledge, though,
- 19:01is this. It's not risk-free, right? Some
- 19:05of the risks include this. The sanctions reversing,
- 19:08okay? Political instability inside Venezuela, like,
- 19:12you know, is it going to be secure for them to be on the ground? And again, the CEO of
- 19:15Exxon said potentially it's not. Execution delays, right? It's
- 19:18probably going to take four to five years to
- 19:22rebuild the infrastructure to a point where they can even extract the oil. So it's going to take time as
- 19:25well, yeah? Faster than expected global energy transition. I
- 19:29don't think that matters in this particular scenario. People are thinking about that like,
- 19:32oh, will oil be needed? I don't even think there's a risk, to be honest, especially
- 19:36with the heavy crew. I just don't think that's going to be replaced, right? So
- 19:40here's the key distinction. Chevron has the
- 19:43balance sheet. the scale and the diversification to
- 19:46absorb these risks better than almost anyone. All
- 19:50right, so here's the big picture takeaway from this episode. As
- 19:54Trump reopens Venezuela, that's his intention. Very obvious that's going
- 19:57to happen. Oil flow, particularly heavy crude, will increase. The
- 20:01US interests are prioritized. China's pushed away to the side. In
- 20:06fact, the U.S. has said China can still take Venezuelan oil, but they'll be
- 20:09buying it off us. What a deal. This is
- 20:12quite funny, too, because people don't realize. They're like, what? The U.S. dollar is not
- 20:16backed by anything. I'm like, really?
- 20:19Well, it just secured the largest oil reserves in the world in
- 20:22one day. So the US dollar is backed
- 20:26by the world's most powerful military that just takes what they want. So
- 20:29don't give me that it's not backed by anything, it's backed by that. How
- 20:33else can you create wealth so quickly, right? Imagine what happens
- 20:36if they take Greenland. They underestimate the
- 20:39U.S. dollar is backed by the U.S. military, right?
- 20:44Low-cost integrated majors win, and the one
- 20:47that's on the ground right now is Chevron. It sits at the intersection
- 20:51of the politics, so it's favored by Trump. It's
- 20:55energy security that the US needs. It's very much needed. The infrastructure is
- 20:59already there. The cash flow is going to increase already, even without Venezuela. And
- 21:02they're really good at giving it back to shareholders. So that's
- 21:05why Chevron stands to make more money than almost any other company from
- 21:09the Venezuelan reset. All right, so here's my final thought
- 21:13on this. The biggest fortunes, just so you know, aren't made by
- 21:16predicting headlines. They aren't. They're made by understanding
- 21:20a few things. What are the incentives? What's
- 21:25the structure? Who has the power? And where's the positioning?
- 21:30And if you look at all those things right now, Chevron's positioned exactly where
- 21:34the money flows as Venezuela reopens. And
- 21:37it even makes money even if it doesn't, right? So there's limited
- 21:41downside, massive upside. So if you want more deep dives like this,
- 21:44hit the subscribe button. Because most people you know,
- 21:47they're not gonna see opportunities like this unless they watch something like our
- 21:51channel So if you've enjoyed it hit the sub button share this with someone else and
- 21:54of course leave a comment in the comments below I'd love to know what do you
- 21:57think about Venezuela? Are you positioned to dominate the oil market? And
- 22:01most importantly I'm excited for it, too. I just shared on my stories yesterday in our on
- 22:05Instagram, our positions in oil. And so if you're interested in that,
- 22:09go follow me on Instagram as well. And I'd love to continue the conversation. Are
- 22:12you positioned in oil? What do you think is gonna happen? Leave us a comment. I'll come and
- 22:15talk to you then, and I'll see you in the next episode. Thanks for listening to Money Grows on Trees.
- 22:19If you enjoyed the episode, leave a five-star review on Apple Podcasts and
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- 22:32platforms, Lloyd James Ross for more. See