Crassus Investments Pty Ltd
Australia
2m
In this episode, I sat down with Doomberg to unpack one of the most misunderstood ideas in markets: why most commodities fail to compound over the long term—and what investors consistently get wrong when they try to trade them. The core Doomberg thesis is simple but powerful. Over long periods, the inflation-adjusted price of most commodities trends lower. This isn’t because demand disappears, but because commodity producers are relentless deflationary machines. Technology, efficiency, substitution, and capital response continually grind down production costs. Shortages inevitably invite oversupply, and price spikes are almost always followed by gluts. Trying to “own commodities” as a long-term investment is therefore akin to being perpetually long the VIX: occasional explosive upside, but steady decay in between. This is why Doomberg argues investors should avoid owning commodities outright—or even commodity producers—and instead focus on businesses leveraged to volume, not price. Energy demand grows steadily over time, but price is volatile and mean-reverting. Companies that enable production, move molecules, process by-products, or clip a toll on activity tend to survive downturns and benefit disproportionately during spikes. This framing closely aligns with my own preference for royalty, streaming, and toll-booth business models, where there is minimal distance between revenue and cash flow. We also explored whether there are exceptions to this rule. Doomberg draws a sharp distinction between gold and commodities. In their view, gold is not a commodity at all, but a monetary asset and long-term store of value. Land similarly behaves more like a savings vehicle than a consumable input. Water, however, is often misunderstood: while locally scarce, it is globally abundant, and shortages are ultimately solved through infrastructure, technology, and pricing—making it behave much more like energy than people assume. A major focus of the discussion was oil and gas co-production, an area many investors overlook. Oil is no longer a standalone market. Natural gas, NGLs, condensates, and crude are increasingly fungible, and their economics are deeply intertwined. Higher gas prices can incentivize more oil production, while cheap gas undermines oil pricing through substitution, engine switching, and chemical conversion. Doomberg argues that traditional indicators—like oil inventories or rig counts—are increasingly misleading in a world where drilled-but-uncompleted wells act as inventory and where NGL hubs like Mont Belvieu quietly rival OPEC members in scale. We also discussed LNG, AI-driven electricity demand, and why rising gas demand does not automatically imply higher oil prices. In fact, abundant gas often means abundant oil. On the geopolitical front, we covered Argentina’s Vaca Muerta, which Doomberg views as a world-class resource constrained primarily by politics rather than geology, and Venezuela, where the lack of reaction from Russia and China may be more telling than the headlines themselves. The key takeaway: scarcity narratives sell, but abundance usually wins. Investors who anchor to outdated frameworks risk missing how modern energy markets actually function. Understanding co-production, substitution, and volume economics is now essential—and owning the right business models matters far more than trying to time the next commodity spike. As such, in conclusion, I came away from this conversation with further conviction that the way to invest in commodities is to invest in those who stand to benefit from increased production or as Doomberg puts it - the enablers of production. youtu.be/qG4YxnAP-Bg
Doomberg - Why Commodities Don’t Compound (And What to Own Instead) EP100
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📘 Read the Research Get full access to The Royalty King’s Report with all my long-form research: 👉 https://theroyaltyking.substack.com #commodities #energy #geopolitics In this special 100th episode of the TRK Podcast, host Benjamin welcomes back Doomberg for an insightful discussion on the convergence of finance, energy, and geopolitics. As they reflect on the past year's achievements and look forward to 2026, Doomberg shares their unique perspectives on market dynamics, investment philosophies, and the future of global energy. Tune in for a thought-provoking conversation that chal...
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