Soundtrack to a Financial Advisor's Life Episode 11 with Mike Morey
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A Conversation with North Dakota-based Investor Mike Morey about the Energy Markets
This was a fun romp with someone who spends his professional time looking at companies in the energy field. Mike Morey is Chief Investment Officer for Viking Fund Management in Minot, North Dakota – right in the heart of the Bakken Shale Formation zone. Recent energy events have prompted us to do a series of podcasts on energy with more to come. Domestic energy poor Britain and China are among many other nations struggling to meet their countryman energy needs and with winter coming inventories of natural gas and other fuel sources are running thin. With that backdrop we thought talking to a guy like Mike would be timely.
Key points:
The advantage of being in North Dakota as a researcher of energy companies?
What is an exploration & production (E&P) company?
Cost structure of producing gas from shale vs gas from other parts of the world.
Why do you guys own the companies you own in the American Resources Fund? Do you have some energy commodities and if not why not?
Are batteries and their supply chain actually more disruptive to global stability and increase overall net pollution than petroleum-based energy?
Carbon capture - turns out you can bury the stuff.
The energy sector response to environmental policy specific to global warming?
CHAMBERS: Hey everybody. This is Trevor Chambers with Olde Raleigh Financial Group here in, let me turn around and look, yes, actually, sunny Raleigh, North Carolina. And Mike, how you doing today?
MOREY: I’m doing great. How about yourself, Trevor?
CHAMBERS: Good man. Good. Hey, before I introduce you, I gotta (sic) big, big emotional question for you. I just had sushi at a place down the street called Waraji and the crew here at Olde Raleigh, we love that place. What are you – I know you’re out in North Dakota? Where do you like to go to lunch like – I don’t know if you went today, but, where do you like to go?
MOREY: Well, there’s this place off of Broadway owned by Angie and Shannon. A great little pizza joint called Sammy’s Pizza –
CHAMBERS: Nice.
MOREY: -- and very, very family friendly place that I like to take the family or even sneak out and just grab a meal by myself.
CHAMBERS: Well, I always like to give shoutouts out to local restaurants so Sammy’s it is. And we’ll talk about where you’re from a little bit but I’m feeling the sushi right now, so. But anyway, once again, we are adding another episode, another song, if you will, to our podcast called A Soundtrack to a Financial Advisors Life. And today we’re recording – I like to say kinda (sic) a base track. In this case the base track is the base of our economy, the world economy really, and energy. A story of energy is important as ever. And today my hope is we dig deep or we pull back the curtains and take another level and understanding in what’s going on in that world. I’d like to introduce my guest, Mike Morey. He is a – he’s with Viking. He’s a CIO actually. Chief Investment Officer for Viking Fund Management out in North Dakota. And I’m going to let you – I can babble through, you know, who you are and what that, but rest assured people, this guy has put his 10,000 hours in and he is what we call a master, I would say, in information about the energy markets. So, Mike Morey, very nice to have you here. Thanks for calling. I haven’t talked to many people from North Dakota lately so how’s things out there, brother?
MOREY: They are wonderful. We’re actually going through quite a hot spell here lately. Very abnormal temperatures for this time of year, here in North Dakota.
CHAMBERS: Okay.
MOREY: The weathers been great. You know, the markets have been acting up pretty decent holding in there and –
CHAMBERS: Yeah.
MOREY: -- you know, just trying to – trying to keep a, you know, a balanced life.
CHAMBERS: Yeah. All right, well I really want to thank you for doing this because I just think, you know, one of the areas I’ve been researching when it comes to these podcasts is energy. It’s just so important and obviously lately, I mean there’s been some interesting things going on over in Britain, when it comes to energy. I don’t know if you have any comments on that but, tell me about – tell me brief background on you. Who you’re with, what you do and then we’ll jump into some questions?
MOREY: Yes, I’m married with three kids. Graduated from Minot State University. That’s in North Dakota as well.
CHAMBERS: Now, where is that in North Dakota in relationship to, like give me a, you know, where we at out there?
MOREY: It’d be north central.
CHAMBERS: North central. Okay.
MOREY: Just north of the capital, Bismarck.
CHAMBERS: God, it’s gotta (sic) just be beautiful out there. It really has to be. It has to be incredible.
MOREY: Yes, it is.
CHAMBERS: Yeah awesome. And tell me about Viking Fund Management.
MOREY: Yes, we are a unique mutual fund company, you know, that has different mutual funds, you know, whether it’s a municipal bond fund attached to a single state. We have a high-income fund that is sub advised by JP Morgan that has an excellent track record. We have our integrity dividend harvest fund that is, you know, our kind of a safety dividend, equity approach that allows, you know, our clients to invest in the equity side of the market without taking on excessive risks all while getting a far better dividend yield than you’re going to get from, you know, either bonds or the S&P 500. We have an integrity ESG growth and income fund that focuses on sustainability. The portfolio team there, Trey Welstad and Josh Larson have done an incredible job of managing that particular portfolio. And the fund that we’re, I guess going to be overlapping a little bit with the topic today is our integrity Mid-North American Resources Fund, which, you know, focuses on US shale, as well as, you know, the all – all of the above approach when it comes to energy so including some renewable exposure there as well.
CHAMBERS: I just want to – so, yeah let’s focus on that – that area for sure. And I kinda (sic) – before we started, I said to you, you know, you guys are in North Dakota. Like, there’s gotta (sic) be some advantage of being where you are given that focus of research that you guys do. Can you talk about that a little bit? Because I think that’s kinda (sic) interesting.
MOREY: Yeah. Absolutely. And, you know the fund was absolutely developed by a, you know, a former portfolio manager, Bob Walstead (sic) on the idea of what was occurring here in the Bakken and it was an absolute boom and we’ve created this fund as an investment opportunity for share, our shareholders, you know, to partake in that massive growth that we were witnessing in the Bakken. You know, so when I started as a research analyst for this fund back in 2010, you know we would frequent the field. We would head out into the Bakken and talk with companies and see what’s going on. You know, we feel – truly feel that gave us an upper hand and advantage when investing in energy.
CHAMBERS: Yeah, I would imagine. Especially compared to everybody else in the country, especially on the coast so that’s fabulous. That sounds like it’s in your blood. I know you wanted to talk about – I would like to go back to the shale thing. But first I know one area you wanted to talk about was exploration in production business model – the E&P companies business models. You want to talk about that a little bit?
MOREY: Yeah. So there has been a remarkable evolution within expiration and production companies, how they are running their business. So, let me go back to the early days of shale, you know call it circa 2009 through 2014. It was kinda (sic) a grow at all costs kind of a business model that they were taking. And their shareholders were loving it. I mean, they were seeking out to the expiration production companies with the, you know, the best wells and the highest growth rates and they were getting their rewarded via their share price. What occurred though, is there was a prolonged period of overinvestment that caused the global supply inventories to swell, be way over supplied and that’s what caused the significant pull back in crude oil prices, you know, back in 2014 –
CHAMBERS: Right.
MOREY: -- where OPEC elected no to cut and we saw a significant pullback in crude oil prices which in a sense sent a message to these expiration production companies that in a sense burned investors multiple times in a row to change the way that they run their business. So, what has happened is these expiration, production companies have gone to a much more shareholder friendly focused approach where instead of like back in the day spending one hundred plus percent of their free cash flow, you know back into the drilling programs. You know, they’re now maybe spending maybe 40 to 50 percent of their free cash flow and returning the remainder to their shareholders. And this is – its’ definitely a better approach. They are no longer destroying capital. They’re creating capital. Investors are, you know, kind of forcing it upon them and actually these companies are getting rewarded. So, a good example would be Devon Energy. They were the first mover in what I’d call the variable dividend approach. You know, where they highlighted, they’re going to maintain their, you know, their traditional dividend but they’re also going to implement a variable annual dividend which actually they’re paying on a quarterly basis of 50 percent of their free cash flow. You know, so, you know looking at this here, that could, you know, equate to a possibly six, seven percent dividend yield by the end of this year and –
CHAMBERS: Wow.
MOREY: -- possibly double it – double digit dividend yield by next year. You know, other companies like Pioneer Natural Resources (inaudible) have followed suit, so. You know, this is a very powerful move because it provides stability to production. You know, as well as capital being returned to shareholders.
CHAMBERS: Kind of the perfect storm. It’s kind of what you’ve been waiting – this is why you’ve been – so it’s maturing, it’s a maturing situation now and it’s getting a little bit more less, you know, wild west, if you will.
MOREY: Absolutely and, you know, on a positive front, you know this – it’s kind of like they’re in a prove it moment and I think they’re proving it right now as crude oil prices have climbed dramatically but their capital budgets have remained stagnant. So that’s telling me they’re not chasing crude oil prices anymore. They’re committed to this capital discipline. And that’s going to draw back investors and allow further upside for their stocks.
CHAMBERS: So, let’s stay on the subject of stocks. Like, I’m starting to get the impression of what you guys look for but, why do you guys own the companies you do own in the American Resources Fund? Like what’s you’re discipline? What’s your – what are you looking for and also I’d – do you actually own any of the actual commodities – do you have a commodities sleeve in that mix or is it all 100 percent just companies, equities in the fund?
MOREY: Yeah, 100 percent equities in the fund.
CHAMBERS: Okay.
MOREY: And what it comes to investing, you know, in the energy sector, you know we like to keep our portfolio well diversified across the different industries within the energy sector. And what we do is we’re trying to seek out companies that we consider best in class within the respective industry. You know, so our portfolio is predominantly – it predominantly owns conventional energy but we have begun to diversify, probably over about the last year and a half, two years into some renewable energy stocks. And we feel this is appropriate, given that, you know, the United States is on the verge of a decade long path to electrification and the growth prospects within renewables are going to be fairly robust but by owning, at the same time, looking back at conventional energy, the backdrop for conventional energy right now is looking very promising as, you know, it appears as if we’re kinda (sic) going through a period of time where the markets trying to absorb the OPEC barrels that were cut during the pandemic but, you know once that’s absorbed, the capital budgets that we’ve seen across the world, you know, are far too light to meet the longer dated demand growth figures of the world. Kind of went on a little bit of a tangent there, but kind of gave you back – getting back to our portfolio and what we invest in. You know, right now our favorite industry is expiration production companies based off of, you know, what we’ve discussed with their capital discipline and their strong free cash flow. But we do also like refiners as well. Right now, they’re benefiting – they’ve seen some pretty – very good performance recently on the heels of the mandates set forth by the renewable fuel standards. They reduce the level of blending required, you know, which is certainly going to help their margins. On the EMP front, I kind of highlighted Devon Energy. You know, and Pioneer and ConocoPhillips. One thing we like about ConocoPhillips, is their taking a little bit different approach than Devon Energy. Instead of having a variable dividend, they’re planning to pay out thirty percent of their cash flow from operations which, you know is a little different than free cash flow because it comes before a couple line items. But it does kind of true up capital discipline even more, in the fact that it is coming directly out of the cash flow from operations. And they said that at 30 percent payout is what they’re going to come in at and likely, possibly take that to 40 percent. I was just on a call with them last week and you know, that’s kind of what they were highlighting. You know, but their dividend approach is strictly fixed, not variable. And, you know, I think that’s much more sustainable in the longer term.
CHAMBERS: Nice. And by the way Mike, I like when you go on tangents. You know what I’m saying?
MOREY: I can.
CHAMBERS: I like it because you’re engineering nerd out – out there. You know what I mean? I mean, like I said, you’re the – I love it. It’s very cool. Well, it sounds like – essentially you sound like a classic investor in the sense that you love good stewardship of funds. I mean it’s like when you have cash coming into the business, what are we doing with it? When we have an investment coming in, what are we doing it and are we good stewards of it and that’s a critical piece.
MOREY: Yes.
CHAMBERS: Sounds like you’re looking for that. Yeah.
MOREY: Yes, absolutely and that’s kind of part of the reason why I wanted – when we were constructing this portfolio, having that healthy balance between conventional energy and renewables, you know, kind of provides a different flare for our portfolio that you’re not going to see in a lot of energy portfolios that are strictly conventional. You know, but on the conventional front, we’re looking for, you know companies with high ESP standards and you can find that in their pitch books and their, you know, their quarterly earnings clause that they (inaudible) can really truly get a sense for, you know, what these guys are doing to improve, you know, their carbon footprint. You know, whether it’s carbon capture and storage. You know more emphasis on reducing flaring, use of electric frac fleets. Carbon offset projects like those windmills and forestation. You know, these are all things that are going to allow them to, you know, be better stewards of the environment.
CHAMBERS: Yeah, so that kind of segways me perfect. I was going through your site and it’s – and there’s some great information, man. You know, especially about our energy – the US energy production and like shale. And I’d love for you to talk about it. You’ve got a great slide and I think, if I can, compliance allowing and if you guys are cool with it, I might even link to it, you know, within this post when it gets up, but tell me about shale. Because I think it’s something that people are underappreciating and there’s some misinformation about like we are a massive energy producer and like I think in 2018 we became a net largest exporter of energy or something like that. But this is your world so you tell me – I guess what I’m trying to ask here is, big macro question. We got this shale revolution. Tell me about it from your perspective and where does it help the US line up in the world from a strategic point of view?
MOREY: Right, so prior to the shale revolution the United States was in a perpetual decline of oil production as well as natural gas too. You know, so when the shale revolution first got kicked off, it was predominantly targeting natural gas. You know, and that – what happened it basically caused our natural gas prices in the United States to go from double digits – well into the double digits to sub three dollars. You know, granted we’re seeing a little bit of a bump here recently but that’s just because of the demand uptick primarily due to weather. But it created, you know, much more affordable natural gas and we saw a lot of coal to natural gas switching. You know, so it’s positive for the consumers and it’s positive for the environment because gas is significantly less, you know, has a significantly less carbon footprint than (inaudible). So, that’s, you know, the initial benefit. What happened then was a couple operators, EOG and Continental Resources, you know decided they were going to utilize the technique of fracking which includes horizontal drilling – the combination of horizontal drilling and hydraulic fracture and they were going to do that to Bakken. And it just set off a frenzy of land acquisitions and because of the huge success. You know, so what hydraulic fracturing has done for our country is significantly reduce the strain on the consumer and made our country much more energy independent. You know, our natural gas production is absolutely skyrocketed over the last fifteen years and same with the oil production, you know. From 2009 to you know, 2016 we added millions and millions of barrels to our production which ultimately got us to, you know, a net exporter of energy.
CHAMBERS: Can I ask you a question about the actual oil coming out of the shale? Is that pretty heavily processed, like what – what’s its cost structure versus say something coming out of Russia versus something coming out of the Middle East? Because I understand the Middle East is the purest of oil and requires the least refinement to actually then be allowed into your tank. Is that true? I don’t know if that’s –
MOREY: I would say it’s opposite.
CHAMBERS: Oh, okay.
MOREY: It has, yeah so as OPEC’s production, you know, continues to mature, their oil declines the specific gravity of the oil continues to decline and the sulfur content continues to increase. Which makes oil technically dirtier.
CHAMBERS: Right.
MOREY: What we get from shale is high specific gravity oil that is very, very low of sulfur which is much easier to process and refine. It’s also being on the lighter side, you know, that once it goes through a refinery you get a higher gasoline and diesel cut than, well I guess more predominantly, jet fuel and gasoline cut than you’re going to get from heavier barrels of oil. And also, from that standpoint it’s kind of a pro, it’s kind of a con because some refiners do like the heavier oil because the diesel demand has been, you know, holding out fairly strong compared to gasoline demand here, recently due to the pandemic. But you know overall shale barrels are highly desirable.
CHAMBERS: Interesting. Okay. I thought – okay. So, it’s pretty, relatively speaking, it’s not the – it’s kind of cheap to turn shale into gas that you can put into your cars. Is that what you’re saying?
MOREY: Well, it goes through the standard refining process, you know, --
CHAMBERS: Okay.
MOREY: -- and it depends on you know, the affordability, you know on the consumer front is going to depend on, you know, where crude oil prices are and if they’re refining cracks, spreads are running.
CHAMBERS: Got it. Okay. All right, cool. I appreciate that clarity because I’ve often wondered that, you know. I’ve heard different things, so, all right. That’s awesome. And again, a guy like you would know, you know. So, let me ask you something, we talked – you just mentioned electrification. Do you think it’s going to take ten years? I think it’s kind of longer than that, don’t you think?
MOREY: Yeah. I mean simply put, the policies in place towards electrification have to be balanced. We can’t allow runaway energy prices. We’re seeing it over in Europe, you know, and their policies are a direct cause of that.
CHAMBERS: Yeah. I want to talk about that a little bit. Sorry, go ahead.
MOREY: So, they’re – they’re dealing with, you know, some outages of their North Sea windmills. You know, as well as, you know, weather issues that have impacted demands it’s looking like they’re going to enter this year about 17 to 20 percent underneath five-year averages of natural gas which is a very bad setup and that’s why we’ve seen, you know, their natural gas prices skyrocket at one point into the thirties per MCF. So, the policies have to be balanced. You know, and what it’s going to allow, you know, is basically conventionals, you know will be filling the void as technology continues to improve and allow renewable to be more competitive. So, I think the current administration and, you know, democrats will continue to push aggressively towards a faster pace of electrification. But I certainly think there needs to be balance and if they push too far and energy prices go up, the consumers they’re going to tell them to pump the brakes. Because you know, one thing is for sure. Higher energy prices effect the lower and middle class far more than they do the upper class.
CHAMBERS: Like, I interviewed a guy about a month and a half ago. A guy from London. He’s a business strategist. He consults, you know, big publicly traded companies, whatever. And he talks about ESG and he talk – you know, this guy, but it’s funny – I’m actually reached out to him just this morning because teeing up this podcast because he was kind of calling what was going to happen. Like this whole issue that England is having, he called it. Like this was coming. He knew this was coming, you know what I mean. And he saying, you know, it’s it really strikes an economic disadvantage – we’re really economically disadvantaged over here because of our – the way things are set up. So, I mean how do they get out of that? I mean, other than just CapEx. A ton of CapEx into energy, right? London has, right?
MOREY: Yeah, perhaps put a little bit of revisions on their policies in place –
CHAMBERS: Okay.
MOREY: -- such as the carbon tax. You know, when it starts weighing on the consumer, you know that’s a really bad thing for your economy. And high natural gas prices, high energy prices are just a start there. You know, if they are sustained higher, everything else gets more expensive.
CHAMBERS: Yeah.
MOREY: You know, and then you have runaway inflation that makes it even harder to control. And also making exceptions for certain policies is certainly one way they can address the issue at hand right now.
CHAMBERS: We’re very lucky in this country to have that shale.
MOREY: Yes, we are.
CHAMBERS: It’s just like people just don’t get it. I mean, it’s just like it’s unreal that we, you know, and the ingenuity of the American engineers. I mean it’s just, you know, to push it over. What’s your thoughts on batteries? I mean, I posed the question, where are we going to get all the materials to put into these batteries? Like there seems to be – there’s going to be a lot of investment in trying to find all the stuff that goes into batteries as well as technical innovations too. I mean, do you have any thoughts on that whole thing?
MOREY: Right. So, you know on the United States fronts, we’re certainly not nearly as blessed when it comes to rare earth metals than we are on the conventional side. However, expiration, you know, is underway and they are finding rare earth mines all across the country. You know, it’s yet to be determined the economic feasibility of them but as it sits right now, most of the rare earth metals are over in Asia. So, you know, that’s going to be important for the United States to, you know, have legitimate access to rare earth metals so they are competitive on that front. You know, because the world is going that direction. You know, so just as we want to be energy independent on the conventional side, we’re going to want to have the same thing in place when it comes to rare earth metals. You know, as far as your question on batteries. Ultimately, since the lithium-ion batteries have not come along ways – they have seen some modest improvements but I think it’s going to take another technological breakthrough in order for, you know, EV’s and battery adoption to, you know, truly, truly start to take market share.
CHAMBERS: Yeah. I guess so. Was it Ford just put like six or seven billion into batteries? I don’t know the details of that deal but that’s a lot of money.
MOREY: Yeah, they – I don’t have the exact figure but they made their largest investment ever as a company, you know, for batteries and electric vehicle manufacturing.
CHAMBERS: Now, I just have to wonder like, you got these batteries right. I mean, like to my point going back to like how we’re going to source all this stuff. I mean, I have to step back and say to myself, are batteries actually like net actually worse for the environment? I mean I don’t know. I mean – I mean obviously we gotta (sic) cut greenhouse gasses. I understand that but those batteries are not, I mean, that’s a lot of bad stuff that happens between getting the stuff out of the earth, making it, disposing of it. You know, I just, I don’t know. I wonder. I wonder. Yeah, go ahead.
MOREY: I agree with you on that. I would agree with you on that. That batteries are far from clean. You know, but they are a step in the right direction. And technology will continue to improve and help lower the carbon footprint of the extraction of the metals and minerals that are required for batteries. Also, recycling is coming a long way which will also, I mean add additional reduction to the carbon footprint of the extraction front as if you recycle you no longer have to extract additional ones. But that is yet to be determined the true feasibility of recycling and reuse.
CHAMBERS: I was talking to another, a portfolio manager, a colleague of yours out there in portfolio management world and his – he also is an energy guy or at least part of what he looks at is energy, kinda (sic) like you. And, he said, you know, don’t get – don’t discount the hydrogen as a potential fuel for moving people around in cars, so who knows. You know, I think, but it’s going to be interesting to watch for the next 20 or 30 years. Because I think that’s what it plays out. It’s a decades long thing. It’s never going to end.
MOREY: Yeah, hydrogen is certainly going to be, you know, the fuel of the future but right now the economics of it are – it’s far too expensive.
CHAMBERS: Yeah. Yeah, exactly, so. All right. Well, that’s good. That was great, man. Thank you for that. I appreciate it. That was a very – was a very – but a little bit wonky discussion we went into right there about all that stuff, so. Which I like. Do you – what’s your thoughts on the energy sectors? You touched on this earlier but the energy sectors response to environmental policy, specific to global warming, I mean, you know, not everybody agrees that global warming is going on and to be honest with you, I don’t know. I mean, but, yes. But how do you think – is it genuine and I – it sounds like it is. I mean, they’re putting their money where their mouth is and, you know, what do -- where do you see this going?
MOREY: Yeah. Yeah, so I’ve lumped that into ESG, you know, on the E side, the environmental side. It is not just important. It’s a necessity for these energy companies to adopt ESG standards, you know, to lower their carbon footprint to become, you know, better citizens. And it’s happening. It is very tough to find an energy company that mentioned ESG in their investor presentations five years ago and now you can’t find one without it. It’s important to investors and it’s important for them, you know, to be much more responsible and, like I mentioned earlier, they’re taking on a lot of tasks. These major oil companies, you know, like Exxon, are implementing carbon capture and storage programs, basically capturing the carbon, you know, out of the air and depositing it under ground. One interesting thing is once you inject carbon into the ground, it compresses significantly once it reaches a depth of, I believe it was 1,000 feet to the point where these underground caverns or beds can hold a significant amount of carbon and actually, you know, be, you know, a solid storage way.
CHAMBERS: Really?
MOREY: Yeah.
CHAMBERS: So, you put it 1,000 feet below the surface and it just starts to compress and then you – the it – wow.
MOREY: Yes, correct. You know, so other things these companies are doing, you know, I mentioned the flaring has, you know, significantly reduced and that is coming a long way. You know, these expiration production companies are using a new technology called electric frac fleets. You know, so that helps them lower their carbon footprint if they’re using an electric frac fleets versus a diesel operated one.
CHAMBERS: Right.
MOREY: And then I think I mentioned carbon offset projects so that would include windmills and (inaudible) has made progressive stuff there on their windfarms as well as forestation.
CHAMBERS: Do – what do you think of the carbon offsets and like, do you think we’re going to get to like what a carbon credit costs? I mean are we at the – I mean – does that, you know, have to be kind of a government mandated thing? I mean, what – do you have any thoughts on that?
MOREY: Yeah, I think it’s probably going to have to come from the government if there’s any, you know, mandates on what a ton of carbon costs.
CHAMBERS: Yeah.
MOREY: You know, I think there’s – I think there’s a lot of research that needs to go into that to kind of get a better understanding.
CHAMBERS: Yeah. Yeah. All right. Very, very cool. All right, well I – go ahead. No, go ahead, please.
MOREY: Yeah, you know, but like getting into the carbon offsets, you know, the number one best way, you know, to offset the, you know, your carbon footprint is hands down, forestation.
CHAMBERS: Yeah.
MOREY: There’s also other ways. I mean, carbon credits are out there. When people can use those to, you know, hypothetically offset. So basically, you buy a – buy a credit and let it expire and that in a sense is a lowering your emissions. So, you’re taking that carbon hypothetically out of the environment.
CHAMBERS: Yeah. Yeah, you gotta (sic) love trees.
MOREY: Absolutely.
CHAMBERS: You gotta (sic) love trees. We have a lot of – we’re actually called the Oak City, here in Raleigh, North Carolina and so we’ve got oaks all over the place and, yeah. North Dakota – do you guys – is – how’s the fishing out there? Do you guys – is it hunting, like where you are? Is it more hunting or mor fishing or both or what’s going on out there?
MOREY: I’d say it’s pretty balanced. You know, I’m not an avid fisher but we have a lake, Lake Sakakawea, that’s nationwide known for, you know, solid wildlife fishing.
CHAMBERS: Really?
MOREY: But I’m more of an avid hunter.
CHAMBERS: You are, okay? What do you like to – what do you guys – caribou? What the hell do you guys have out there? You guys have massive things I imagine.
MOREY: Well, we have white tail deer.
CHAMBERS: Okay.
MOREY: But my favorites pheasant hunting.
CHAMBERS: Oh, all right. Cool.
MOREY: Beautiful birds. Very thrilling to hunt. Absolutely delicious.
CHAMBERS: Yeah, nice. Now do you got like the hunting dog and everything and that whole deal or what’s up?
MOREY: Yes, we do.
CHAMBERS: Nice. What kind of dog is that? Is that a pointer? Or what the hell is that? What do you got?
MOREY: Surprisingly, it’s a golden doodle.
CHAMBERS: Get out of here.
MOREY: And I didn’t –
CHAMBERS: You can teach that –
MOREY: -- I didn’t have much expectations for how good of a hunter he would be because they’re not known for it. But poodle breeds are pretty smart and last year was his second-year hunting. Kind of his first full year –
CHAMBERS: Nice.
MOREY: -- and he did exceptional. He did absolutely exceptional. He was able to pick up a lot of birds that we would have likely walked by.
CHAMBERS: Nice. Cool. Yeah, I am not – I’m a guitar player, myself. So that’s my kind of hobby, you know, among – and golf and stuff. After all, I’m a wealth advisor in Raleigh, North Carolina so you gotta (sic) play golf, you know what I mean. So –
MOREY: Yep. Absolutely.
CHAMBERS: -- if you can’t – yeah, yeah.
MOREY: One thing I’ve found with golf though, is lack of repetitions does real harm to one’s handicap.
CHAMBERS: Yes. You have to – you have to get all your bad swings out, Mike. That’s what you have to do. You have to focus on getting all your bad swings out so, yeah, you gotta (sic) swing it a lot to get it going, so. Well, is there any other words of wisdom that you would like to bestow upon us here? Any final comments?
MOREY: Well, I think, you know, when it comes to investing, in particular the energy sector, you have to be disciplined and calculated with how you do it. And, you know looking at, you know the cyclicality of the energy industry over the past several decades, you know, you can make a lot of money or get burnt. You know, so we feel the approach that we have taken is going to kinda (sic) take a little bit of that cyclicality out of it. You know, as we’re investing in, you know, the highest quality companies, you know, that have proven track records, that are good stewards of the – at least progressing to become better stewards for the environment. You know, being the energy sector, you know it’s imperative that you take steps there and also, you know, when it comes to carbon reduction there’s not one single industry that has the potential to do what the energy sector has when it comes to reduction of their carbon footprint. Because they are the largest pollutants, you know.
CHAMBERS: Yeah.
MOREY: So, you know, they have the potential to make the biggest impact, you know when it comes to the overall carbon footprint of the world.
CHAMBERS: Yeah.
MOREY: You know, but getting back to investment in energy and how we do it, you know, our balance approach, you know, with a blend of conventionals and renewables, you know, will likely, I think provide us with an edge over our competitors and as this progress and renewable technology continues to improve, I would assume that renewables would become a larger portion of the portfolio as time goes by.
CHAMBERS: Yeah. Well, I’m – it’s going to be interesting to see it play out. I’m – I have a feeling you’re right on that and this is great, man. I would love to do this again, you know. Maybe we can review the tape, you know, after a year or something like that and come back and do this again and see what’s going on with you guys. But, Mike, I really appreciate the time. I really do and I appreciate the introduction to your company and I’m sure my listeners—our listeners here at Olde Raleigh are going to dig it. So, you know, energy’s a big deal and we, you know, I call this A Soundtrack to a Financial Advisors Life. And what that’s basically about is, Mike is, I’d like to get insight to our clients and our potential clients on what we listen to. What does a wealth advisor listen to and one of the things you gotta (sic) pay attention to is energy? It’s such a huge, you know, it runs the whole deal, right. So, this has been right up that alley and I totally appreciate the time. So, listen keep trucking. It’s Thursday. Okay, it’s Thursday. Only one – wait basically you got the – a couple more house and then you got the Friday and then you’re rolling into the weekend and I’m sure that’s going to be awesome so, thank you. Let’s stay in touch. And I appreciate the time.
MOREY: Absolutely and thank you for having me, Trevor.
CHAMBERS: you got it bud. All right. Thanks a lot.
(INTERVIEW CONCLUDED)
CHAMBERS: That was a fun one with Mike Morey. That was great about energy. One more addition to the podcast to A Financial Advisors Life. If you live in Raleigh or Durham or Chapel Hill or Cary and your google searches are things – lately have been things like financial advisor near me or financial planner near me or financial – fee only financial advisor near me, maybe you just want to circumvent all that searching and just put in olderaleighfinacnial.com. That’s Olde with an E at the end. We’re actually not old, but we do love things like old school human connections through conversations. Because conversations are the root of every long-term relationship. So, keep trucking out there. Thank you for listening and we’ll see you soon.
Trevor Chambers
Trevor joined Olde Raleigh Financial Services in January of 2015 and his primary role is new business development and marketing. Prior to joining the firm, Trevor spent 12 years working at his family’s restaurant, Raleigh’s Bella Monica Cucina & Vino. “Exceptional service, no matter the industry, is paramount and we attract clients who value and take comfort in being taken care of.”
Mike Morey
Mike joined Integrity Viking Funds in 2009. He had been a research analyst for Viking Fund Management, LLC prior to being named Co-Portfolio Manager for various funds managed by Viking Fund Management, LLC. Mike received a Bachelor of Science degree in Finance from Minot State University. In addition to Co-Portfolio Manager of various funds, Mr. Morey is Chief Investment Officer for Viking Fund Management, LLC.