I’m watching “Jack Ryan” on Amazon Prime as I anxiously await the return of Game of a Thrones and a line struck me. “Geography is destiny.”

Of course, it was speaking of the differences that exist because someone is born in the US versus somewhere else and the opportunities that exist.  Would I be where I am today if I were born in Venezuela and was dealing with a collapsing economy, hyper inflation and rolling blackouts and didn’t know where my next meal was coming from?  Probably not. 

At the same time, the phrase applies to all manners of life.  House values, school quality and in oil and gas – your basin matters.  The best team with the best idea in the wrong basin doesn’t work.  Why?  It can’t attract capital and without capital – no idea is worth anything.  

Geography IS destiny – and the Permian is the growth engine.   It’s worth remembering when looking at mid cap equity values when you consider them “cheap” if they are in the wrong basin.  

#hottakeoftheday