Welcome to another candid discussion from the niche investment strategies panel. The
speakers are sharing the toughest lessons they've learned, from bad partners, time and
mistakes to communication challenges, and how they built resilience through experience.
Ray, is there any new, let's say the big beautiful bill or any new regulations that
come out that you think our, maybe opportunity zone or whatever that is affecting
your industry or that is, people might not have absorbed just yet? Yes. Right now,
it's the fact that the One Big Beautiful Bill Act is really pushing people towards
these alternative investments. When you look at what we need right now, the Strategic
Petroleum Reserve is over 60 % depleted.
We need that energy back in that for true emergencies. And what this one big
beautiful Bill Act is really doing is encouraging investors to come do these
different investments to get these tax advantages to help actually benefit America in
the long run with things like filling up the Stratolian Strategic Reserves. But
really also you get that long -term cash flow because right now we're at $60 oil.
And under this administration, we're going to stay at that $60 to $70, very
confident. But what they're looking for right now is just increasing our production
to lower the price, which then changes inflation and allows the economy to continue
to grow. So it's almost like invest in the economy, allow oil and gas and these
different alternative investments to do their work to then make the United States
economy even that much stronger in the long run. This is a question from the HUVA
app. And it's probably great to start here, which is, what is the,
with the high interest rate environment or a higher interest rate environment
theoretically, and there's a lot of debate on that and changes recently.
Where do you, what is that, How does that affecting your business? Essentially,
it's not really affecting our business that much. Fortunately, we have a huge housing
shortage in America, and you can't build anything without the dirt first. Now,
what it has done this year, we've seen a lot of the national builders kind of
pushing back, delaying, stalling, using redlining contracts and renegotiating towards
the end to try and push their land acquisitions more towards the end of the year.
They've been waiting for rates to come down. But again, we're in the southeast. They
have a lot of excess overbuilt inventory. But here's the great thing about the
national builders. They don't really want to, they can't have gaps. So they can't
stop buying ground, but they've got some excess inventory that they've got to unload.
So they're offering up a lot of incentives. And it's really about keeping as many
of their contractors, subcontractors, and people working as long as possible because
it's hard to rebuild momentum. So fortunately for us, the interest rate environment
hasn't affected us. The only thing it's done is pushed out some of the final end
purchases towards the end of the year. But what's happened, now our next three
quarters, we're looking at 271 million in forward projected sales. And we've only
closed $24 million of contracts so far this year. So it just means it got a little
tight for us, you know, for the first three quarters, but we're still performing and
we still know that there will be a catch -up. Great. Thank you. Please.
I was going to say in the deep tech space, I think the high -interest rate
environment has actually encouraged the curiosity of investors into deep tech and
software type of investments that don't necessarily have, at least on the development
side, the exposure or risk of interest rates. And so it's encouraged it and helped
us to start the conversations with investors and close them as well.
As far as it goes within the energy sector, the interest rates are always going to
be something to watch for. However, with the way the value of the dollar has
continued to go, I would definitely recommend that you're always looking at ways to
move your money and don't keep it liquid and in the bank. We know that, for an
example, I'll use oil and gases. You might have a well that's doing 100 barrels a
day and oil's at 60. The next thing you know, in five years, that well might be
doing 50 barrels a day, but oil's at $120. That's no easy math.
It's still producing the same amount of revenue. So as we continue to grow, we know
that interest rates are always going to change, and we need to be prepared to work
with that as those ebb and flows, which again, being in the industry that we're in,
there's always going to be those ebbs and flows, and we've got to just work with
what we got.
Yeah, I would say that the harder it is to raise capital, then the better the
deals you're usually going to get done, obviously, because the other person can't
raise the capital. So you're rewarded more when you raise capital when everyone's
complaining about how hard it is to raise capital. And in 2022 versus 24,
two and a half times as much capital was raised in 2022 versus 2024. And Howard
Marx is a billionaire founder of oak tree capital. And he said in his book, the
most important thing that if an area is unfavored and everyone's like, yeah, stay
away from that area. It's toxic. It's horrible. You might get some really great
deals. And he said that if something is really toxic and people think you're a
complete, certified idiot to look at it. That's when you get the deal of a
generation sometimes. So obviously you can't blindly go in and put money in things
that everyone sees this falling in value. We have to be smart about it, of course.
But I think that's important for people to remember in type of environment. With
that time, you know, 18 years doing this, Richard, what's the number one most
painful lesson you've learned over these years, or what was the most painful
experience that was a lesson you learned along the way? And how can people in the
audience avoid it? I think one lesson is just like, no matter how much due
diligence you do, you could run into a highly functioning fraud and you did your
due diligence. It wasn't your fault. You did everything that you could have. The
other thing is just trusting your gut. There's a Harvard Business Review article. It
said like, should you trust your gut? And the conclusion was basically like, well,
it depends what your gut is made out of. Most of us in here are not in our 20s
or even 30s anymore. Right. So you should probably be trusting your gut at this
point unless you're entering a brand new industry and you probably still have a
business got to trust. So Dan Sullivan says there's two types of pain in the world.
They're short -term pain and long -term pain. So if you have a bad partner, or if
you have a bad employee, you get to choose. Is there a short -term pain and you
let them go tomorrow? Or is it long -term pain and you complain about them every
week to your spouse and your other business partner? So I think that's like a big
lesson.
For me, it's creating and doing as good as we can, having a productive timeline
when we started actually raising outside of the family drilling oil wells mother
nature they don't you know they don't mix very well sometimes and we have to stop
so for us we've gotten more conservative in our timelines because when it's just us
by ourselves we're okay it's like okay we're going to wait another week but once we
started working with outside investors and outside investors' money, it's like, okay,
let's go ahead and get ultra -conservative in our timeline, because what if this
happens or what if this? And do our best to just stay on this productive timeline
that we like to call it to really just stay within over -delivering and under
-promising is the best way to do it.
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