Comstock Resources, Inc.

But it just goes to show when you underwrite things with the right margin of safety, when you buy good businesses at great prices, even if they go against you temporarily, sooner or later, the market is a weighing machine based on fundamentals.

In the short term, it is a voting machine based on emotions, like during COVID when the stock fell to $1.60. everyone thought the world would never open again the fact of the matter is whether it did or it didn't the reserves were still in the ground there was still value eventually it was going to open up or if it didn't open up we were all dead and it didn't matter anyway and that's the mindset you have to have in these extreme scenarios and we're going to look back on the comstock resources of today and dense by serona's and the um um qxos and you're going to say when qxo's at 50 and dent supplies at 40 and comstock resource at 50 plus you're all going to say oh i wish i had bought it blah blah blah but the sad fact is most of you are going to be buyers at 50 when you should be sellers and that's just human nature it's the way we're wired and what we try to do on this podcast is help you separate emotions from the underlying fundamentals so you don't get trapped in those emotional biases and those ways that human beings are wired to follow the herd.

For survival, it's a survival mechanism, but it doesn't work well if you want to make alpha in public markets.

So...

Want to make sure we get some of the others in.

Antero Resources, AR, EQT, you mentioned Occidental, Diamondback Energy, Expand Energy, Comstock Resources, Matador, Venture Global, Chenier Energy, ticker symbol LNG.

Which of those names provides the most upside from here?

Yeah, I'd buy Intero Resources end over foot.

So would it be unnatural could you be bearish and this goes to new highs or back to 1997 peak from 1673 where it is right now before it goes down to you know a thousand and the answer is of course but why do you want to pick up 300 points in front of a possible 50 drawdown and i'm not saying probable i'm saying possible in other words Right now, everyone's still finding and looking for ways to buy the dip.

And we're gonna cover a chart in the pod charts, which actually we can cover right now, that will probably shed some light on why you want to be careful about asymmetry In the theme to the upside, like a Comstock resources, if AI were to go away tomorrow, Comstock is still cheap, trading at a 75% discount to proved and unproved reserves in our estimate, you know, within 100 something miles of eight out of 12 export terminals for LNG export demand, which is continuing to grow.

So we could win with that with or without AI.

Now, they just happen to be closer to all the data centers that are going in in East Texas, which are going to have unlimited demand for their product, and they're the lowest cost producer.

Uh, it just means that the commodity trade within the AI trade is done, okay? Um, how are we expressed for AI? We're expressed two different ways, okay? Picks and shovels.

Number one, we own a company called Comstock Resources.

They are the lowest cost natural gas producer in the country by 50%.

It's trading at 3.7 or three, $3.8 billion.

So, uh, [laughs] all right.

So, uh, Comstock Resources, lowest cost natural gas producer.

Who's excited about AI? Who would like to play AI with limited downside and massive upside? Data center demand is gonna grow by twenty thirty, a hundred and fifty percent.

Sixty-nine percent of it's gonna be fueled by natural gas.

It's just the normal cycle.

Small-- You know, international over US, value over growth, small over large, similar to 2001 to 2005.

Commodities bullish expressed through natural gas, uh, which is also a covert AI trade expressed through Comstock Resources.

Uh, oil coming in.