AJM,
Thanks for your thoughtful response. I find myself in both of your camps—1 and 2. To my mind, the atmospheric CO2 record and changes in ocean pH make it hard to dispute that atmospheric CO2 is increasing. At the same time, I think reducing our dependence on fossil fuels will take longer than many expect.

I remember a chemistry seminar in college in the early 1970s about how the oceans absorb CO2 through carbonate chemistry. That discussion has stayed with me. They tell us ocean pH has dropped (become more acidic) by 0.1 pH in the past sixty years. Even a seemingly small change in ocean pH is quite significant when you consider the sheer size of the oceans.

On the investing side, a lifetime of investing and running a business has left me with some “mental scar tissue.” The comparison that comes to mind is Bob Rotella’s description of athletes whose accumulated experiences can limit their performance before their physical ability declines. I recognize something similar in my own decision-making.

I’ve been fortunate with my portfolio over the past thirty years. Even so, I’ve become more and more of a “coffee can” investor—holding positions for the long haul and finding it increasingly difficult to sell.

As for Marathon Petroleum (MPC) and its peers—Valero, Phillips 66, Delek, Exxon, and others—I expect refining crack spreads to return to historical levels eventually. The question, in my mind, is when. I also doubt the discipline we’ve seen in much of the petroleum industry since 2019 will last indefinitely. Over the next five years, some companies may be tempted to pursue growth through expansion or acquisitions.

Still, there’s another possibility worth considering. If MPC keeps buying back shares and remains reasonably profitable, I can imagine its stock valuation following a path somewhat like Dillard’s. Those are two important “ifs,” though, not a forecast I’d take for granted.

Outside the Wild West of AI and related technology, many established businesses operate in a more constrained world. They don’t have double-digit growth, and they face global competition. What they may have are quieter advantages: lower costs, a concentrated industry, favorable supply or transportation arrangements, or barriers that make it difficult for new competitors to enter. Those advantages may not be flashy, but they can matter.

That’s the backdrop for how I manage what has essentially become a family office. My first job is to preserve capital against inflation, government-related risks, and legal challenges facing the businesses we own—not lawsuits involving us personally. Beyond that, I hope to grow portfolio value while giving a portion away to worthy endeavors and family members.

In practice, that means spending two to four hours a day reading, analyzing, and thinking, while rarely making a financial move. The rest of the day is a mix of other pursuits, including occasional product-design work that may be useful to others within my business circle.

So I agree with your point about reducing our Marathon position. Selling half strikes me as the prudent choice for us. I think of it as the poker player taking some money off the table rather than continuing to play with the entire stake.

The timing is what I’m still weighing. One scenario I’m considering is a sharp move higher in energy stocks later this year if oil supplies tighten substantially as strategic reserves are drawn down. I’d put that at roughly a one-in-four possibility—my own estimate, not a certainty.

In that scenario, energy stocks might reach new highs while other stocks approach their lows for the year. Year-end selling and political uncertainty could add to the swings. If that combination develops, my plan is to sell half our MPC position and look again at other companies I’ve already identified, provided their prices are below where they are now.
Thanks again for sharing your insights. I appreciate the conversation!

Uwharrie