Business Innovators Radio - Interview with Anthony Milewski, Founder of The Oregon Group

Episode Date: July 12, 2024

Anthony Milewski has two passions: the outdoors and investing. At any moment you might find him skiing in France, fly fishing in Alaska, white water rafting in Oregon, or wide awake in the middle of the night analyzing news releases and financial statements.Anthony realized early on that a truly rewarding career needed to include following his passions. But how to do this? As a Fulbright scholar, he spent time in the former Soviet Union and saw firsthand the changes brought about by the privatization of vast swaths of the regional economies. He also noted the great potential in building companies on the back of these changes and, for a time, was employed by Renaissance Capital in Moscow, Russia, working with entrepreneurs and natural resource companies. Upon graduating from the University of Washington, with a MA in international studies and a JD in law, he took a job at New York-based Skadden, Arps where he became immersed in commodity transactions. Anthony would later transition from Skadden to Firebird Management in New York where he worked in the Global Macro funds.Anthony’s time at Firebird had a profound impact on his investment style. He realized that you can “get a call right” but the “timing wrong”. Investing, as much as anything, is about understanding the themes and ideas that shape our world, environment, and capital markets. It was this realization that helped to shape his views on identifying themes, thinking about liquidity, and ultimately making successful investment decisions. No one ever lost money selling for a gain! After leaving Firebird he went on to work with other major funds as a C-level executive specializing in global origination and investment processes. This time cemented his views on risk mitigation and liquidity.After years in the asset management business, Anthony realized it was time to strike out on his own. Along with his business partner, Justin Cochrane, he founded and took public several companies. To date, he has helped raise over a billion dollars for listed companies on various exchanges around the globe. In a sense, this was Act Two of his career.All told, Anthony has served as a founder, advisor, director, executive, and investor. He now pursues investment ideas that make money and make the world a better place. That might mean investing in nickel as the key ingredient in batteries, carbon as a way of saving forests, copper for the electrification of things, artificial intelligence to help reduce the impact of farming on our environment — the list goes on.Learn more: https://www.anthonymilewski.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-anthony-milewski-founder-of-the-oregon-group

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us Anthony Maluski, who's the founder of the Oregon group. Anthony, welcome to the program. Thanks for having Mike. I really appreciate it. Hey, you're welcome. So I want to dive into what you do and how you do it and while you do it.

But before we get started, give us a little bit of your background and your story. And how did you get into your business? Yeah, well, the funny thing about the story is just like so many people and things is it kind of happened by circumstance. You know, I was in graduate school and I had studied Russian, actually. And I was applying for jobs, and I got a job in London, and they asked me, and I said, Anthony, we see, you know, on your resume here you speak Russian, and I said, well, kind of. I took some classes.

And I said, well, why don't you go work in the Russia office? At the time, there was a huge boom going on, and, you know, these Russian companies were listing in London, and he said, all right, let's go. So they sent me over there, and all of the companies at the time that I was working on were national resource companies. They were oil and gas companies and coal companies and, you know, really everything touching the physical world. And I think by circumstance or happenstance, I just said, I sort of fell into commodities. And so my first job was in the commodities business. And then from there, you know, through time, I worked out investment bank and hedge fund and private

equity fund for ultimately kind of going out on my own. But, you know, if he had asked me just a year before when I was in school, what was I going to do? I would have told you didn't know. And I certainly wouldn't have told you that I would spend the next 20 plus years in a commodities business. So it's kind of, it's funny how that happens. It's interesting, though, if you kind of take two steps back and kind of look at it from the 30,000-foot view, you did your preparation. You went and got schooling. Then you took initiative and went out and got a job. And then you started noticing things, trends and things like that in your environment.

And then one thing leads to the next. And then probably if you were to do a deep dive on job number one, two, and three, you learned something in job one that you took into job two. And then you learned something in job two. So I think that's really interesting. And then that kind of frames us and forms us, right? And now you're all in, you know, with your company. And so talk a little bit about what you do in your firm, given all of those years of experience that you've got. Yeah, and I agree with your observation. I mean, you kind of never know what's going to lead to what, right? and how when you look back, that combination of years of experience takes you to the spot, and you can never really have imagined being there. But each one of these little things kind of takes you to survive, the left. But today I invest and work with companies in the commodity space. And I'll tell you, if you look around the room or the car or wherever you're listening right now

and you kind of just take a deep breath and glance around, what you're going to see is every single thing that you can see right now is probably either grown or mine in its first state, whether that's glass, that's sand, whether that wire is copper, whether it's that knob as petroleum for plastic. And so we live in this world of finished products, but actually everything that we see comes from the earth. And, you know, that's the commodities business, actually. And so, you know, What I do now is I like to write about it and help people to understand, you know, if you think electric vehicles are really interesting, guess what? Copper, Cobalt, lithium, nickel. Those are all potentially really interesting investment ideas. Or what is the big one of now everyone's talking about. They're talking about AI and all the energy it takes to run these data centers, the CPUs. Well, guess what? Where does that energy come from? It can come from hydroelectric dams. It can come from nuclear energy, one of the cleanest forms of energy. It can come from coal. not as clean. And so, you know, when we're thinking about allocating your own personal resources towards investment ideas, we don't often appreciate that we as individuals understand

and see opportunities all the time. We just don't see them because we don't know how to frame those opportunities. I mean, if you're working at an AI data center and you realize that all of these open fields around are going to have data centers on them, you might say, well, how do I invest in that. And you might arrive at the answer that, gosh, I should buy a uranium company that's publicly traded because these things are all going to get powered by nuclear as an example. You might also decide you want to buy Nvidia because they're making the chip. So, you know, we lose sight of the fact that as it goes through our lives, we actually have tremendous insights in how to invest and what we should be investing in because of our experience. We just

don't know how to reframe that and then think about what actually that opportunity could look like for us. And so, you know, one of the things I like to do is just simply write about these commodities and, you know, not as much give advice. You know, each person has to find their own way and think about their own, you know, situation and circumstance and how they want to express an opinion. But it's helping people be more aware of these trends and ideas as they pertain to the commodities market.

You know, what I love about what you just mentioned there is that it's kind of like a foundational approach. And the word innovation came to mind because you're doing the antithesis of innovation. You're letting other people go, hey, look at this plastic commodity. Let's make this new thing. Whatever this is, fill in the blank, 19,000 bullet points of all the innovation and the cutting edge things we see out there. But you take the approach and say, that's all fine and good. That's, you know, potentially shiny object syndrome or that's the flash in the pan. Let's let someone else go out there and create and sell and and invest and market those things. But at the end of the day, what are the things that you need to do to have all of that?

And that's where you're coming from, that commodity, that base, that foundation. Because probably you would make the claim you can create anything you want. But at the end of the day, you ain't going to do it without this and this and this. And if that's the case, then investing in and raising awareness in those commodities really is super, super, super, important. I really like how you framed that. Yeah, like, you cannot have a modern life. I mean, you cannot drive to work without copper, without oil. I'm sorry, even if you have an electric vehicle, guess what, you still oil, right? Like those goods are still transported. So, you know, and another way to think about this is,

like, think about the gold rush in California, right? This is long before our time here, but you know who made all the money? It wasn't the miners, actually. I'm sure there's a couple here and there that made the money. Just like in tech, there are those Facebooks and Googles and those unicorns. But actually the picks and shovels made all the money. You know, the service providers.

And while commodities aren't necessarily service providers, I think when you look at the technology side of it, you're taking on tremendous risk. And there's a big reward there. But, you know, another way to think about playing those themes is to consider the basic materials

that are going to comprise with those themes, right? And that's really where I spend my time and my mental effort. In all of your writing and research, what are some of the trends that you're seeing that impact commodities today? So, I mean, there are a few trends. Obviously, the AI boom globally and just the power that it's going to consume is a major trend, one of the most important trends. And then there are also these geopolitical trends. You know, an example is China. China has globally over the last decade spent billions and billions of dollars buying and investing in nickel and lithium. And so there's a security of supply issue. So China, and oftentimes it's very demonized, but it's not the case.

They've legally and through the front door, gone out and made investments all over the world. And so they control the nickel supply, for instance. And that means that they have the first call on. nickel and nickel is critical for a bunch of things including batteries and in in this example what that means is that there are potential situations where geopolitically certain types of minerals metals to be less available to the United States and so you know the geopolitics globally really matter the AI power consumption is a big line and then of course electrification in different forms so you have the

obvious story around electric vehicles and the copper, nickel, cobalt, lithium that goes in there, the tin. But the secondary effect of that is, of course, our power grid. You know, America's power grid, we have not invested in it. And it's decades behind other countries. And so you also have the need to kind of rework through our power grid. And that's a huge impact on copper. So these big global changes that are underway have impact. And even, actually, and people don't think about this, but even things like in Ukraine, you know, and these smart bombs that they're shooting the U.S. and Russia and everyone else, you know, there are some very esoteric minerals in there that, you know, get used up.

So all these things that are happening in the world when you turn on CNN or Fox News or, you know, wherever you get your news, New York Times, Wall Street Journal, every single one of those global events is having an impact on the underlying commodity market in some way. Wow. One of the things you mentioned there was AI, and I think that if you were to say AI and technology and AI and communication, people would go, yeah, yeah, you can't turn the computer on hearing about AI. For me, and I'm not in your world, but AI and commodities don't seem to be the obvious match there. So talk a little bit about how AI is impacting commodities. Okay. So there's different, once again, there's going to be different. levels, there's just, you know, sort of basic stuff like commodities trade on exchanges. And if AI is driving, trading at a hedge fund, it's impacting the compressor commodities. So that's an example of one way. Another way, AI is impacting commodities is through logistics. So once again, as the logistics chain becomes more efficient, you know, and more organized and more transparent through the use of different AI models and programs. and tracking, it becomes a more transparent market. But I think the most important way that AI is impacting a certain subset of commodities is through power demand.

And each one of these large language models, if you think about it, those models are kind of like the plumbing, right? So the large language models and AI is going to be the plumbing of artificial intelligence. But what's going to happen now, we've plumbed the house, is we're going to come back and put water faucets all around the house. And the water faucets are going to be the specific engines that are related to a given task. And so the power that's being demanded right now is probably a drop in the bucket, because all really the power of demand is, it's the plumbing that's going in. But as soon as all the taps coming in this analogy, right, and the water starts pouring out of the taps, you know, the power demand is going to increase exponentially. So how is power created? Uranium, coal, solar, you know, solar panels are highly linked to silver consumption, wind turbines, hydroelectric.

Every single thing I've just mentioned is a commodity. And so the way that AI is going to impact commodities is by increased energy demand. and therefore increase commodity demand to supply and or create that energy. Yeah, that's a really, really good point. And I also think about the phrase easy access. So if AI gives easy access to that type of information and investment opportunity, then that just really catapults momentum and velocity. And also awareness, don't you think?

I mean, part of what AI can be doing is bringing awareness to the mission and the messaging that you, you're bringing up. Yeah, definitely. I mean, I think that's a different kind of route, but certainly like the use of AI in terms of like transmission and dissemination of information is something that's happening rapidly. And anyway, it's scary.

I mean, you know, it's not necessarily what we're going to talk about today, but just the creation of fake videos or, you know, that look like a person, Reid Hoffman, the founder of LinkedIn, had these two videos that he created. and he was interacting with himself, effectively, and asking himself questions. And I actually asked, I have kids, I asked my younger kid who was real,

I had them on a split screen, like which one was the real person and which one was the AI? And my daughter couldn't tell. And I think we're heading there in a lot of different levels on the human experience with AI. You know, have you seen the movie Ready Player 1?

No. It's also a book. and you know it's this futuristic place where this kid is playing a video game and he puts it on you know kind of like Apple's new headset which if you haven't tried it it's crazy that this dinosaur video and you're stepping this virtual world

which of course is being run by algorithms in AI and you can kind of envision how that's going to completely change the human experience when people are able to already play video games and kind of escape reality But when they're able to do it in a situation, it seems so real that they don't have the desire to go meet other men and women for dating friends. And when that becomes that real, I think there's going to be huge impact on society. 100%.

You know, you mentioned clean energy. And I know we don't have 19 hours to talk about that because that's probably what it would take just to get the first bullet point out. But what are some good sources of clean energy from what you research and write about. Okay, so the reality is nothing is clean. Like, everything is shades of gray. Like, there's no perfect form of energy. And I think, I think unfortunately we live in this highly politicized world where we can't have a real conversation. You're either conservative or you're liberal or you're this or you're that.

And it's unfortunate because actually what energy is about is about tradeoff. Because when you build a windmill, guess what? The windmill, depending on how it's positioned, it might harm wildlife. What is the life expectancy of that windmill? How do you dispose of it? And I'm not, by the way, I'm not disparaging windmills. I'm just trying to point out that, you know, solar panels have silver and what happens when you get rid of them and are they toxic.

And so, you know, each one of these different types of energy capturing devices, or let's call it, you know, each one of them has an impact on the environment. And, you know, it's not. fair to say that coal is bad 100% of the time or that nuclear is good 100% of the time. And instead, the conversation really needs to be about a balance of these different options. You know, like, if you live in Arizona, you should have solar. Like, that's for sure. Yeah.

Southern California. But if you live in Alaska, like, I don't know. That doesn't probably make any sense at all, right? And so we have these binary conversations which kind of reflects the rhetoric in America today. And it's unfortunate because that's not the reality of these different types of energy. And instead, you really need a mix and you really need it to be tailored to a location and have a real conversation. You know, oh, this thing can be clean, X form of energy can be clean, but for the fact that you're shipping, you know, the underlying commodity from the southern part of Africa. So yeah, it looks clean, but then what about all the pollution you caused along the way?

So it has to be a more holistic conversation about the supply chain and every aspect of the supply chain. An example is electric vehicles, which I love, by the way. But you know what? A lot of that cobalt comes out of the Congo and has historically been dug by a 12-year-old boys in the mind. I mean, that's really bad stuff. So these conversations are very complex, but people's attention span and just the kind of environment in America Day is so binary that we're not having real conversations about the supply chain and what does something mean to be green or not green? And, you know, it's a worthwhile thing to consider how we can do that even when we disagree with the people that we're talking with.

Yeah, 100%. There's a lot more than just the surface headline that you might see online or in the news. So I totally get that. What about carbon credits that we hear about? Is there something you can clarify that for us? Yeah, I mean, look, carbon credits aren't a solution. They're a transition, you know, and carbon credits, you know, it's an interesting thing because you would have thought that environmentalists would have embraced it, but instead you have everyone has a test. And I think that's unfortunate because what carbon credits do is they really allow for companies to transition to a lower carbon consumption environment. And what we've seen in the last kind of 24 months, really an attack of these credits. And I think it's unfortunate because, you know, preserving a 20,000 acre stand of trees, like, I just don't see how that's bad. I don't see how that's negative.

But these credits have been attacked. And, you know, I think carbon credits in the regulatory sense aren't going to go away because they're a form of attacks, you know, in California and Europe. But the voluntary markets is going to have to continue to develop. And I don't know what it's going to look like. You know, I think that it's like with a lot of things in, life and business, we don't know what anything's going to look like in five days, five months, five years. So it's just you make decisions based on the information that we have right now,

make wise decisions, and then adjust as we move forward based on new, good, reliable information. Yeah, I think that's right. Well, I think this has been really helpful for us and just to understand all of these aspects of what you're up against. I think that's been so powerful of what you have been able to research and write about Anthony. If someone is interested in learning more about your writings and your, your, um, topics, what's the best way that they can learn more and then also reach out and connect with you? Yeah. So obviously Twitter is a great way. Anthony Maluski. I'm on Twitter. You can go to theorgangroof.com. So www. www.theorgantgroup.com or on my website, which is Anthony Maluski.com.

And, you know, if you DM me on Twitter, I'm always, I always try to be back to you. Excellent. Well, Anthony, thank you so much for coming on today. It's been a real pleasure talking with you. Yeah, thanks for all. I really appreciate it, and I hope you back someday. You've been listening to Influential Entrepreneurs with Mike Saunders.

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