If you have a view on something, how do you invest in that view?
That is the prevailing question that marks an opportunity in the alternative trading and investing space.
Spawned from the knowledge revolution, investments these days are more about taking what you know, your research, your hunches, your views and your values and putting them into the things that you believe in, by investing in them. We are simply too informed to rely on traditional methods of investing.
We want to be self-expressed with investments that we understand and believe in.
Alternative investment pioneer Tim Pickering is a man who knows his stuff. With a champion background in trading and investment, former VP of Trading at Shell (North America) while starting at TD Securities (Toronto) in their elite trading development program and ultimately holding the Senior position for the Energy Derivatives portfolio; Tim is a thought-leader and a man of change influence.
Tim’s philosophy is, “The energy industry is volatile based on human behaviours, and it is our goal to harness that volatility and put it to work for energy investors around the globe.”
Tim believes, “Canadian investors are underserved in the area of Alternative investments. Alternatives are slow to be embraced, harnessed and marketed and we saw the opportunities in changing that. We see Alternative investments doing well in other regions of the world and we wanted to bring quantitative Alternative investment opportunities to Canada.”
Markets go where they go, but rather than be reactive, Auspice Capital is scientifically strategic. Tim says, “A market such as crude oil is either going up or down. That’s just a fact, and what we do is participate in the market movements in the way that is agnostic to price direction. We are indifferent to the news of the day – for example, the rhetoric from OPEC. We focus on the price and volatility of assets to tell us what the opportunity is. If you have a view on something, how do you invest in that view? We support people based on their opinions and beliefs about what they’d like to invest in, and that is non-correlated to the stock market.”
1. Canada has the third-largest oil reserves in the world next only to Venezuela and Saudi Arabia.
2. Canada is the Unites States number one supplier of oil.
3. As of 2015, Canada supplied 43% of the imported crude to the United States.
4. All of OPEC combined supplies 36% of imported crude to the United States.
5. Saudi Arabia supplies 14% of the United States imported oil.
6. Today, without Canada there is no energy security in the United States.
7. 99% of Canada’s oil currently goes to the United States.
Tim says, “The Canadian oil play is the third largest oil reserve in the world, and as a long-term resource it is positioned as a world leader when you consider all parameters. While some say that the Oil Sands is only valuable based on price, that is not a fact. The Oil Sands is partially impacted by price. The Oil Sands is such a massive reserve with a long lasting timeline that it is extremely important, regarding world oil supply.”
Tim elaborates on the big picture perspective, “What makes the Canadian Oil Sands number one in the world is the fact that it responds to our human concerns. For example, The Canadian Oil Sands cumulatively outperforms other energy Nations when you consider the entire picture. Considerations such as human rights, industry standards, environmental regulations, freedom of speech, innovation, efficiencies, health and safety, transparency, good governance, democracy, climate change regulations, energy security, social progress, freedom of the press, and I could go on and on. So Canada is in a great position because of the inclusive position of all variables in play.”
Tim says, “We have to realize that our oil resources belong to Canadians, and for us to progress we need to get the best value for our oil on the world market. That means we need to stop importing foreign oil from energy places that have human rights violations and less stringent environmental considerations. We need to harness our potential and operate with integrity in the safest environment. We have the highest regulations, the highest standards, the best human rights policies, and progressing socially it makes the most sense to utilize our infrastructure. We can’t rely on the fact that we have essentially one buyer, the US for our oil. So that means we need to be strategic and do things like developing a pipeline that links to eastern Canada so that we are not importing 500,000 to a million barrels of oil a day. Rather we want to be exporting our oil and positioning Canada for global oil demand in a diversified global market.”
“Clearly Canada has done a poor job of managing the message about the facts we have talked about here. The oil companies have to step up, the provincial and federal governments have to step up, and we need to be better at educating the world about our reserves and our leadership. As we diversify and globalize the world is clearly going to prefer a long term sustainable supply of oil that considers human concerns and makes them a priority above all,” Tim explains.
Tim’s perspective that the Energy East Pipeline is, “It’s probably not going to move ahead until after the Quebec provincial election. It’s probably going to take a few years to get approved as it’s largely a question of politics.”
Auspice Capital is bullish on oil long-term. Tim delivers the facts, “Oil demand “is increasing” and that’s why we are bullish on oil. When I look at the world energy nations and consider all factors, Canada seems like the best place to me. Tell me another oil producing nation that you’d like to take a vacation in. That is a very telling statement.”
Tim believes that in the future, non-correlated alternative investments will be a core holding in all portfolios. He says, “Our goal was to provide Alternative investments because we knew they would no longer be viewed as risky, but as conservative and prudent, given their measurable value to investment portfolios.”
As one of Alberta’s 50 most influential people, Tim paints a picture of secure investment based on sound fundamentals. He says, “As oil demand increases, global buyers will search for secure long-term sustainable solutions. Canada needs to reduce our dependency on the US as a buyer, we also need to improve our messaging, we need to get oil more readily available to our nation, and we need to promote the access to trading Canadian oil on world markets. So if you have an opinion on oil in Canada, you can invest in oil in Canada.”
Global oil demand is increasing and is expected to reach 100 million barrels a day by 2021. Demand isn’t expected to peak for several decades. So the long term demand for oil as a commodity is not disappearing.
Tim explains the price of oil, “The energy market is prone to cycling high and low. The current situation is a lot better than the past two oil drops, like in 1999 at $12 WTI and in 2008, when the price dropped to $30 WTI. Both of those drops were due to a drop in demand. This situation is different. The oil price drop, this time, came because of too much oil. In other words too much supply. That is different than demand. So we are in a far better situation. The world hasn’t stopped needing crude oil, so the demand is there, and the current oversupply is modest.”
That puts Canada in a good position because we have a long-term safe supply. Now we need people to access it. We have to give people with a view oil, an opportunity to invest, and that’s how Auspice Capital transpired.
To learn more about Auspice Capital go to www.auspicecapital.com
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