After Thanksgiving turkey last week, the men in our clan headed out to vaccinate cattle, drink beer, and sit in the deer stand.

That’s about as Texas as you can get if you ask me. Here’s a view from the top of the chute, taken from back during the spring…

Upon arrival, we noticed that our new neighbor had decided that it was a good time to build a large deer stand of his own. In late November. Right in the middle of deer season.

If you’re unfamiliar with how this works, I’ll paint the picture.

Imagine you’re a young buck. A chill in the air has got you up and moving about. You begin to venture back to the place where you found food a few weeks ago and have returned to nearly every day since. (Unbeknownst to you, this is where a hunter made meticulous preparations months ago…)

You start to approach the spot where you found that delicious corn the other day. But then you hear a buzzsaw and a hammer a quarter mile away.

That’s more than enough to spook a deer. You’re not coming out in the open.

Guess we’ll have to wait for our buck another day.

As the good book says, there is a time for everything. A time to plant, a time to harvest. A time to kill… a time to build, etc.

The point is, you don’t build a deer stand in the middle of deer season. By then, it’s too late. You’ll end up scaring them all away and have nothing to show for it. It also won’t be looked on too kindly by your neighbors. Especially the ones who were careful stewards of the land all year, hoping to reap its harvest when the time is right and fill their freezers for next year.

I bring this up because we’re entering the final stretch of this year. Now is the time to clean up your portfolio. Rebalance. Harvest some losses for tax purposes if that suits you. Think about what you want next year to look like. What are your goals? What were your mistakes this year? Write them down.

Don’t wait until we’re well into 2023 to do this. By then, it’ll already be too late.

In the meantime, I sat down with Nathan Slaughter for a brief discussion about what’s going on in China, the big picture for energy stocks, and more. My questions are in bold…

---

Nathan, things in China got… interesting in China over Thanksgiving. Can you explain what’s going on?

Sure. It began with a small candlelight vigil for victims of a deadly fire in the city of Urumqi in western China. Ten people were killed when a blaze swept through a high-rise apartment building. Residents in the Xinjiang region had been confined to their homes due to Covid quarantine. And the ongoing lockdowns are widely believed to have contributed to the death toll. Ironically, government safeguards may have even thwarted rescue efforts.

Thousands of mourners took to the streets the following night to denounce China’s iron-fisted Zero-Covid policy. Frustrations, already simmering for months, finally boiled over into a full-fledged protest. Videos of the backlash circulated swiftly on social media (before they were disrupted or taken down by censors), triggering similar demonstrations in a dozen other large cities.

Shanghai. Chengdu. Wuhan.

_{Source: Statista}

That was a week ago, and angry protests continue to sweep across China, capturing headlines around the world. But this is no longer just a simple show of opposition against three years of mask mandates and travel restrictions. It has become a courageous rallying cry for democracy itself.

Thousands are gathering on college campuses demanding freedom. City sidewalks have erupted with chants of “down with the Communist party, down with Xi Jinping.”

China’s state constitution and party charter were both revised during the pandemic to abolish Presidential term limits, a bold power grab that has given Xi almost unchecked rule, perhaps for life. But just one month into his unprecedented third term as leader, the authoritarian regime is beset by open political dissent from all sides.

The Chinese government isn’t known for being tolerant of opposing views and has ruthlessly quashed prior uprisings. No country on the planet jailed more journalists last year for speaking their minds. Citizens who don’t toe the line risk being branded as subversive activists and punished accordingly. State-owned media outlets carefully control the sanctioned flow of information.

With their voices effectively silenced, protestors are simply holding up blank sheets of paper – a symbolic gesture of defiance. But even that is crossing the line. Beijing’s current security chief is directing local law enforcement to crack down on what he refers to as “hostile forces.”

Police have erected barricades, confiscated phones, and detained hundreds for further questioning. As the Wall Street Journal reports, facial recognition surveillance is being used to identify demonstrators, some of which will soon “disappear.”

Chilling. But also heartening to see oppressed citizens standing up.

We don’t normally discuss geopolitical affairs unless they impact markets. So is this something investors should be watching closely?

It’s a fair question. Considering U.S. companies generate billions in Chinese yuan, investors would be wise to stay apprised of events in the land of the Red Dragon.

Just ask Apple. Or Tesla. Or Las Vegas Sands.

Even businesses that haven’t set up shop in China can still be pulled into its orbit and impacted by tariffs and trade embargoes. As the world’s largest manufacturer, China holds sway over commodity prices and exerts considerable influence over numerous sectors of the global economy, from steel production to solar power.

But it’s limping right now. Hindered by draconian Covid restrictions, China’s GDP growth is expected to decelerate to just 3.2% this year. That’s a far cry from its normal double-digit pace. In fact, it’s the most anemic output in nearly half a century, reflecting weakening real estate values, retail consumption, export volumes, and just about everything else.

Beijing won’t be seen as bending to the demands of protestors. But nor does it want to fall behind the West, which is why I expect to see a renewed emphasis on pro-growth policies in the months ahead. Some initiatives were already on the table, including heavier infrastructure spending, targeted business tax cuts, and relaxed banking requirements aimed to stimulate lending activity.

As these measures take hold, China’s economic output is forecast to strengthen to 5% in 2023. Only time will tell. But given the increasing importance of China in the global economy, this is a situation to monitor.

It seems like there’s a renewed push for so-called ESG investing… Electric vehicles are growing more popular… So why are oil & gas stocks still worth considering?

Of course, we all know that the calls for “greener” technologies are growing louder by the day. And I’m actually a fan of lithium from an investing perspective, by the way. But the world isn’t going to suddenly stop on a dime and stop using oil and natural gas, either.

All of the smart players know this. They have to prepare for the future while exploiting the current resources available. That’s their job. Part of that includes investing in more capital-efficient projects instead of recklessly pumping that money right back into the ground.

The result is a net win for everybody. The big players can remain profitable with oil prices at $40 or even $30 per barrel. That also means more cash to share with shareholders in the form of buybacks and dividends — which will be vital to attracting investors now and in the future.

Naturally, they still want to add to production as well as replace assets as they deplete. So many of the oil majors are leaving the significant exploration projects to the smaller players. And if one of them makes a major find, they’ll simply come along and scoop them up. Again, it’s a better deal for everyone, including shareholders.

So if oil and gas aren’t going away anytime soon, how can investors profit?

Of course, you can always invest in the Chevrons and Exxons of the world. Nothing wrong with that.

Then there are the larger independents. For example, Pioneer Natural Resources (NYSE: PXD) is one of my favorites.

We added PXD to our Takeover Trader portfolio back in May 2020.

Our thinking was simple. Oil prices were barely a month removed from dipping into negative territory for the first time in history, thanks to the effects of the Covid pandemic. If that weren’t bad enough, a price war broke out between Saudi Arabia and Russia after the OPEC majors failed to agree on production cuts.

We knew that wasn’t sustainable. We also knew that PXD was one of the strongest players in the all-important Permian basin in West Texas and that it had achieved impressive economies of scale that would allow it to survive low prices.

Originally, we thought PXD might get scooped up by one of the majors. But the company has been a victim of its own success, as seen in the chart below.

Then there’s door number three: the smaller players have more upside through price appreciation and are also ripe for takeovers. And I think I may have found the next one…

Following a game-changing merger with its neighbor, it’s the largest remaining pure play in the Permian.

The two companies are a natural fit with adjacent, complementary positions, a shared commitment to measured capital spending, and a similar focus on cash flow optimization.

They officially tied the knot in September. But the company still sports a market cap of less than $6 billion – a bigger bite, yes, but still an easily digestible size for a larger player.

As I write this, we’re already up by about 34% on the pick. But I think that’s just the beginning. Not only is it still incredibly undervalued — but the company may find itself in the cross-hairs of an acquirer. And depending on the offer, that could be enough to send the stock much, much higher.

Editor’s Note: Nathan and his team have just updated a report which contains all the details you need to know to profit from the pick mentioned above. And while it’s already showing a nice gain, they think it’s just getting started…

In fact, this company is sitting on top of the “Mother Of All Oil Booms” — and it has at least triple-digit upside.

Go here to get the details now.