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Legendary investor George Noble talks income investing (0:20) Energy, drillers, gold, miners, and consumer stock shorts (5:30)

Transcript

Rena Sherbill: The man, the myth, the legend. It’s George Noble. We’re so happy to have him. Thanks for coming on.

George Noble: Thanks, Rena. Thanks for putting up with me.

Rena Sherbill: Put up with you very happily. We’re happy to have you on talking markets and analysis, but we also have something very special to share with our audience and with investors in general, you are putting on the absolute best conference that’s ever been seen to man and machine.

What is the conference? It’s May 20th. We have Steve Cress and some other familiar names from Seeking Alpha, but also some big hitters from outside the Seeking Alpha world.

Talk to us about this conference that’s coming next week. Share with us some of the main insights that will be gleaned and given and some of the biggest hitters that are going to be speaking, please.

George Noble: Thank you, Rena. So we’ve had three conferences so far, stock picking ideas. This conference is going to be dedicated to income investing, which I know is a topic that’s near and dear to many Seeking Alpha subscribers.

In a world of runaway fiscal deficits, irresponsible policy, bond markets, which are in disarray, think we’ve had four consecutive down years in bonds, and we’re looking at a fifth one now, what are you supposed to do with your income portfolio?

You take the traditional 60-40 portfolio. What are you supposed to do? And so, bonds historically, look at the 60-40 portfolio. Their inclusion has really been designed to hedge your equity exposure i.e. if we had a recession, profits went down, and markets went down, the bonds, the appreciation in bonds would offset that.

Historically, that’s worked. Stocks and bonds have been negatively correlated. Now they’re positively correlated. And the real risk is not one of recession and depression, but inflation. We have fiscal dominance running. Budget deficit is 7 to 8 % of GDP as far as the eye can see. We’re not, the dollar’s not the safe haven it once was.

And so bonds are, and we talked about this in our last time we were together, Rena, bonds are a very dangerous place to be. So what’s an investor supposed to do?

And so we’re trying to answer that question. There are other ways to generate income. We have on the one hand from Seeking Alpha, Steve Cress, who I understand is coming out with an income product next month. Steve’s going to speak about that and what he sees in the way of income.

And then we have a very nice array of other well-known Seeking Alpha group leaders. I can’t recall all of them, but people like Hoya Capital, Alex Pettee.

Leo Nelissen, Kirk Spano, Sam Kovacs, you go down the list. It’s some of the most popular and best SA authors. They’re going to come with a lot of great individual ideas in conjunction with an array of speakers who are coming from outside SA.

These are some of the best thought leaders out there. People like Michael Howell, who’s the world’s leading expert in liquidity. Luke Groman, who needs no introduction. He’s been in the Vanguard advocating gold and Bitcoin as a replacement for bonds. David Hay of Evergreen Gavekal. Jay Pelosky, formerly head of emerging markets at Morgan Stanley. And then finally, John Roque, who is my favorite technician on the street, is going to talk about the technical outlook for interest rates, bonds.

So you’re have a combination of macro and micro thinkers to try to make sense of the very challenged income environment that we’re in. All in one day on Wednesday, May 20 for only $99. This is crazy. You take someone like Michael Howell, he charges tens of thousands of dollars a year for institutional clients. You can get all of this in one place for $99. This is unprecedented.

I hate the term democratization of finance, but we really are democratizing finance. We are bringing the best intellectual capital we know to investors and it’s only $99. I couldn’t be more excited about this. Hopefully many of your viewers will attend.

Rena Sherbill: We’ll leave a link to sign up for that in the show notes. And it also runs from 10 a.m. to 6 p.m. Eastern. It’ll also have access to a full replay.

George Noble: Correct, replays should be available immediately. I don’t expect anyone to sit through 10 hours, 8 hours except me because I have to interview everybody but the replays will be available so you can listen to them in bite sized portions.

Rena Sherbill: J. Mintzmyer, by the way, one of the friends of the podcast, will also be in the conference.

George Noble: I forgot J. I just was emailing with J this morning. We’re trying to figure out when he’s going to talk. J’s one of my favorites and he talks shipping, which is related to energy. It’s one of the most topical things right now. So, I’m really excited to have J.

And I should also mention Michael Boyd, who works with J. Energy Investing Authority, it’s called. He’s going to be appearing.

So, in the show notes, in the flyer for the program, you’ll see everyone. I think we have eight people. I think we have 14 speakers and I believe eight or nine of them are from SA. It’s kind of like the SA All-Star team in combination with the best minds that I know, guys I’ve known for decades coming from the outside. I think it’s fantastic, but I know advice is worth what you pay for it, which is nothing.

Rena Sherbill: It sounds like an embarrassment of riches. That’s what it sounds like.

Last time you were on, you were talking about avoiding the S&P, avoiding bonds, as you mentioned, buying gold. Where are you at these days?

George Noble: Prices have fluctuated, to put it mildly. You look smart, you look stupid. I think all those trades worked until they didn’t work. I think they’re about to work again.

So people like to result on performance and there’s lies, more lies, and statistics. You always can adjust your starting point from wherever you want. Into May, I looked like a genius. The last five, six weeks, not so much.

But I think the big trends are still in play.

So, let’s talk about where we are, but I will reference where we were, this context where we’re going. We made a call on energy in December. We got, I just looked at it, I was like, you know what? If I’m wrong, we’re not going to lose much money. The sector was forgotten. If I’m right, you can kill it. It has nothing to with the Strait of Hormuz.

We killed it. The energy sector was on fire before the extra-curricular activities of February 28. Now that crude’s gone crazy, energy’s up, energy’s down.

My crystal ball isn’t any better than anybody else’s in terms of how high oil prices are gonna go, how long this is gonna continue.

My own personal view though for what it’s worth is I think this is rather take longer instead of sooner. It’s gonna be later rather than sooner in terms of when this gets resolved.

Each side is dug in. The Iranians have never had more leverage than they have now. And each side is asking of the other set of demands which I don’t think the other sides will want to accept.

So, in the for what it’s worth category, I think this is going to take quite a while to resolve.

However, even if we were to wave a magic wand today, and the whole thing was resolved, it’s going to take months for this to get resolved, and it’ll be until 2027 until the situation gets back to normal.

But what I want to point out to people is normal, again, think about what the energy patch looked like prior to February 28. Prices were going up.

Demand was inflecting. Consumption was at record highs. So use that as a baseline. But then on top of it, consider the over a billion barrels of crude by which global inventories have come down and all things being equal, which they never are, oil prices inversely correlate the level of inventory.

So whatever you thought was going to be the baseline for oil prices previously, it’s that much higher now. And so I look at the stocks.

They don’t in any way, or form reflect current oil prices. More importantly, you should look at deferred prices. Looking at the longer term contracts, December crude or whatever. Those have gone up a mere fraction of what the front has gone up. And I think the day this thing gets resolved and I hope it gets resolved, I have no idea when it’s going to get resolved. I’d fully expect oil prices to go down.

That’s Captain Obvious 101 thinking. That’s not what’s important. What’s important is what comes afterwards.

And I think we’re in a world where, you go back and you look at consumption at record highs and growing. We’ve got 5 % depletion roundabout, give or take. We’re not drilling for enough oil. I think the outlook for the energy patch is terrific.

Over time, I was trained in Fidelity. Back in the day, you want to invest in industries where you’ve had underinvestment and avoid industries that are over investment. Tech investors, please call your office.

I did a great interview last week with one fellow, points out to me that, you look at for instance, the drilling sector, you look at rigs, day rates, you look at the replacement cost of rigs, like 50 million bucks, you can buy them through publicly traded companies at like 10 or 20 million bucks.

Prices have to go up a lot in order to for drilling activity to increase and I think we are entering a period of drill baby drill.

So I like the energy sector a lot, in particular the drillers. We had a couple great calls in the offshore guys, energy guys early turn of the year, had Valaris (VAL), had Cenovus (CVE). Ensign (ESVIF) looks interesting. All the land drillers look really interesting. So I like the energy stocks a lot.

I’d stay away from the ETFs, from Exxon (XOM) and Chevron (CVX). They’re great companies, but they’re pretty expensive. They can do a lot better. So I like energy.

Gold. Gold was doing fantastically until the Mideast situation erupted. A lot of theories as to why gold sold off. Some people say, well, the Mideast nations are having to sell some of their gold. Who the heck knows? I mean, just to review the go to the videotape, gold and silver were doing great until the fall.

Momentum Bro and Tech Bro discovered (GLD) and (SLV) as their new favorite meme stocks and the thing went totally crazy. So it got to be a zillion percent or above the moving averages. We had a correction. That’s fine. That was in January, February, and then along came the Mideast. So gold and silver kind of got sideways for a while.

I think they’re now starting to go again. Silver’s poked its head up. More importantly, and I’m going to give a big shout out to SA alum, Zachary Marx, is now managing money. He’s been a champ, everyone should go look at some of the stuff Zach’s put out of hand on the podcast a couple times. He’s no most notably been recommending (SSRM), which is a stock we’ve written up. Stocks are in 35, I think it’s to give or take. It’s like six or seven times earnings. I didn’t say cash flow. I said earnings. I think the stock should double.

Just to start the conversation, then we can debate what happens from there. In other words, and Zach made the point, I totally agree, the gold miners, the (GDX) is the ETF for the gold miners, and (GDXJ), the gold miners and the silver miners are going to do incredibly well even if the metals prices just stay where they are.

So, and God forbid if gold goes up the way I think it’s going to go up, then no price is too high. So I really like the gold miners. If you’re too lazy to pick stocks, just buy the GDX or GDXJ.

I think inflation, generally speaking, and this gets back to the conference, is sticky and rising. The 10-year, I think we’re at 440, 445 today. I think we discussed this last time, but if I came to you and I said, Rena, I have income of $5 trillion, and I’m spending $7 trillion, I’m running a $2 trillion deficit and by the way, I owe the bank already $40 trillion. And by the way, there’s $125 trillion of off balance sheet liabilities. Rena, would you please lend me money for 10 years at 4.4%? I don’t think you would do that, right?

That’s the bond market today. So, I would run, not walk from the bond market.

And you’re starting to see bond yields in the US drift up. And again, don’t just look at the US, you have to look at the context.

Look at what’s happening on a global basis. US yields are relatively, remarkably quiescent. You have Japanese bond yields at 30-year highs and breaking higher. You have European bond yields at 20-year highs and breaking higher.

And so I think the direction of yields is up. I don’t know at what point we’ll get to the market now. At what point rising bond yields and rising oil prices finally pressure the stock market? That’s a simple question and I’m on a roll, so let me keep going as long as I’m making sense.

If you told me two months ago when this stuff, you told most people when these extra-curricular activities broke out that the S&P (SP500) would go straight up and the semis would go up 100% whatever in three weeks, whatever it was, I certainly didn’t predict that, most people didn’t.

But to be fair, people like to point out that earnings estimates have continued to rise. They’re at a very healthy clip the last couple of months, and that’s really the reason why the market’s been going up despite all the negative news.

I’m fearful that we’re approaching a point that once it all gets to a certain level or bond yields break through a certain level, I think it’s going to really hit the economy and hit the market. What that number is, I don’t know.

Many times people say it’s not the level, it’s the rate of change. But I think the equity market writ large is in a very dangerous place right now.

I don’t want to be hyperbolic, but I’m sure you follow all these things. The market breadth has been terrible. There’s been an increasingly smaller number of stocks that driving the indices, most notably technology, the semis.

I’m very negative on the AI trade. I’m not negative on AI itself. I think AI will be adopted. But, right now, show me the money. I mean, they’re spending hundreds of billions, about trillions of dollars on AI and hyperscalers. And I don’t see a path to monetization or one that’s going to justify the current valuations.

And then you look at the cash flow profile for the hyperscalers. This is disaster. I mean, look, these stocks, why they do so well over a long period of time? It’s deservedly so. Rising earnings, rising sales, rising earnings, strong cash flows, pristine balance sheets, buying back stock, moats, all good.

What’s changed? What’s changed is these companies have now become very capital intensive and their free cash flow is going out the window. They are spending money on data centers at such a prodigious pace the cash flow profile is a freaking disaster and that has big implications for what the valuations should be and one of the trades I think we talked about last time.

It worked and it didn’t work but it’s going to work again, you want to own the equal weighted S&P. Keep in mind tech is 40% broadly defined tech is 40 % of the S&P. So it’s a very tech-centric index and I think that’s a big risk that maybe investors don’t realize. So, it’s all come down to tech. It’s all tech all the time, right?

And the market has an inability to focus on more than one thing at a time. And it’s been focusing on tech, focusing on the horror moves. We put out a list of stocks late March, March 25th I believe. I put out like eight buys and eight sells. 8 shorts and 8 longs. Wasn’t making a market call. I just said, here are the stocks that are to outperform and here are the stocks that are going to underperform.

If you look at the spread between the longs and the shorts, the buys are up 14, the market’s up 13. It outperformed even though it had no tech stocks, which is freaking amazing. But the really interesting thing is the shorts are only up 4.

So you look at the spread between the longs and the shorts, it’s like 9-10%. Which gets to, as I mentioned earlier, the market can only focus on one thing at a time.

You look at our shorts, there a lot of consumer stocks in there. In fairness to my paying subscribers, I don’t want to give away all the secrets, but I’ll just mention one that we have been public on, Freshpet (FRPT), which by the way, was mentioned as an idea at our last conference by Tom Chanos, brother of Jim Chanos.

Everyone knows Freshpet. Those are the guys with the refrigerated dog food in the coolers in Costco (COST), in Walmart (WMT). Freshpet has been a great growth stock.

They pretty much have exhausted all their white space. Growth is slowing. Stock is still egregiously expensive and here comes the good part. The week after Tom recommended it as a short at 80, the stock’s down, I don’t know, 30%, 40%, whatever, since he recommended it.

Costco came out and said they’re coming out with their own competing product. Costco, by the way, is 10 % of revenues. And Walmart also made a similar announcement, they’re 35 % of revenues.

Not to mention the fact that General Mills (GIS) is also a big competitor. So earnings estimates have been collapsing for Freshpet. The stock is still extremely competitive, really expensive.

And you have two huge competitors entering their space. So even though it’s gone from 80 to 52, that’s what, down 35 %? I expect it’s gonna go down another 35%.

This is an investment short, all right? This is pure alpha. This is collapsed down 35%. I guess the backdrop of a market is up 10%. This is pure alpha.

So it’s longs and shorts. I mean, so this list, as I said, the longs are up 14, the shorts are only up 4. What’s really interesting, the shorts, largely I’m concentrating on the consumer area. I didn’t put any tech names in the shorts. Consumer names in. So it’s stocks like Freshpet.

I’ll give away one other name which I made public before. But Cava (CAVA), the salad guys everybody knows. I think it’s done alright so far, but it’s staring at a stupid valuation.

And you’re starting to see with the K-shaped economy, we all know this, low end consumers starting to get pressured. And I suspect like a lot of other consumer companies, they’re going to get hit as well.

And by the way, it’s not just the low end consumer that’s getting hit, you’re starting to see even the high end starting to get hit.

So I think consumer stocks, again, it’s a market of stocks. Everyone always asks, so what do think of the market? I don’t know.

It’s a market of stocks. I could find a lot of things I like in the sectors I mentioned, broadly speaking, resources, commodities, metals, gold, energy, all that kind of stuff. Things that Dennis Gartman would describe as if you drop them on your foot, it would hurt.

And the flip side is there a lot of things I would short. A lot of consumer names.

I think Tesla (TSLA), you might want to ask you about Tesla. I went into jihad the other day against Elon Musk and SpaceX (SPACE), which I think is going to be an epic disaster.

And I think the semis are totally overcooked. I think data centers are overcooked. And so there’s a lot to do here. So I don’t even know what the question was. I know I answered it and then some, but that’s my story and I’m sticking to it.

And if you’re serious about investing, and I’m not shilling for you. Learn some investor education. Take a finance class. Watch your favorite YouTube guys. Subscribe to Seeking Alpha. Learn what Steve Cress has to say.

Steve Cress has run rings around 99.99% of investors in the world. Alpha Picks is like nothing. It’s like $400 bucks, it’s like nothing. So swallow your pride, just say no to SpaceX and Elon Musk, and just invest in Steve Cress’s Alpha Picks. And no, to all the haters, oh George, no, I’m not being paid to say that.

I’m saying that because I’ve been taking his product for three years and I know what the man does and the process is systematic, repeatable and transparent. That is investing.

Don’t miss the Best Income Ideas Online Summit on Wednesday, May 20. Hosted by legendary investor George Noble in collaboration with Seeking Alpha, the summit will feature today’s top investing minds sharing their #1 highest-conviction income idea for 2026. Actionable names and frameworks for putting capital to work in this market, all for just $99.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

After having been in the investing world for more than 25 years from private banking and investment management to private and venture capital; I have pretty much “been there and done that” at one point or another. I am currently a partner at RIA Advisors in Houston, Texas. The majority of my time is spent analyzing, researching and writing commentary about investing, investor psychology and macro-views of the markets and the economy. My thoughts are not generally mainstream and are often contrarian in nature but I try an use a common sense approach, clear explanations and my “real world” experience in the process. I am a managing partner of RIA Pro, a weekly subscriber based-newsletter that is distributed to individual and professional investors nationwide. The newsletter covers economic, political and market topics as they relate to your money and life. I also write a daily blog which is read by thousands nationwide from individuals to professionals at www.realinvestmentadvice.com.

Company Participants

Stig Frederiksen
Michael Ebbe – Group CFO & Member of Executive Board
Jens Lund – Group CEO & Member of the Executive Board
Saskia Blochberger – Group CPO
Jesper Riis – Group Chief Information Officer
Vishal Sharma – Group Chief Commercial Officer
Brian Ejsing – Group COO & Member of Executive Board
Frank Sobotka – Chief Executive Officer of Air & Sea Division
Helmut Schweighofer – Chief Executive Officer of Road Division
Maciej Walenda – CEO of Contract Logistics Division

Conference Call Participants

Lars Heindorff – Nordea Markets, Research Division
Marco Limite – Barclays Bank PLC, Research Division
Alexia Dogani – JPMorgan Chase & Co, Research Division
Arthur Truslove – Citigroup Inc., Research Division
Alexander Irving – Bernstein Institutional Services LLC, Research Division
Jacob Lacks – Wolfe Research, LLC
Cedar Ekblom – Morgan Stanley, Research Division
Muneeba Kayani – BofA Securities, Research Division
Ulrik Bak – Danske Bank A/S, Research Division
Kristian Godiksen – SEB, Research Division
Andy Chu – Deutsche Bank AG, Research Division
Dmitriy Pokaluhin
Marc Zeck – Kepler Cheuvreux, Research Division
Patrick Creuset – Goldman Sachs Group, Inc., Research Division
James Hollins – BNP Paribas, Research Division
Cristian Nedelcu – UBS Investment Bank, Research Division
Leszek Sulewski – Truist Securities, Inc., Research Division
Andy Chu – Deutsche Bank AG, Research Division

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Sylvie Lalande

Dear shareholders, dear fellow directors, dear members of the Quebecor family, good morning, and welcome to Quebecor’s Annual Shareholders Meeting. We are delighted to welcome you back to our offices and to take stock together of another eventful year.

The business of the meeting will be conducted in French. However, the proceedings are being interpreted into English, and audio devices are available at the entrance to the room.

With that, allow me to introduce you to the individuals joining me on this stage. Firstly, Mr. Pierre Karl Peladeau, President and Chief Executive Officer; Mr. Hugues Simard, Chief Financial Officer; Marie-Pierre Simard, Senior Vice President, Legal Affairs and Corporate Secretary, who is on my immediate right — my left rather, who will serve as Secretary of this meeting.

Before officially opening the meeting, allow me to share a few words about the year just ended. Last April, we celebrated the third anniversary of the acquisition of Freedom Mobile, a landmark and profoundly transformative event for Quebecor. Three years later, this decision, which lies at the heart of our success, continues to be lauded within the company and is told by many shareholders, analysts, investors and financial columnists.

Quebecor embarked on this major shift toward geographic expansion in 2023 with a clear ambition of becoming the fourth major player in Canada’s telecommunications landscape. Today, when we look at the prominent position Freedom has carved out for itself in the Canadian