The market can remain irrational longer than you can remain solvent.

How Mobius anticipated COVID-19, and what we stand to learn from it


When you run a company in a city like Houston, disaster preparedness isn’t optional. It’s necessary. So when COVID hit, and perhaps as importantly when the stock market crashed at the hands of an oil price war between Russia and Saudia Arabia, we were ready. Because we always are. 

Each quarter at Mobius, we run a Disaster Readiness drill, a thorough check of our backup and mirroring systems, so that we and our clients can be assured we can stay online and agile no matter what happens in the skies or on the Street.

We’re a 24-hour operation, and our clients need to be able to rely on our ability to make complicated transactions just as effectively on a Sunday night as a Monday morning.

Houston is hurricane country, but disaster readiness is about being as ready for acts of man as acts of god. It’s about taking the data we smartly aggregate and analyze and making sure it’s always available and effective. Our clients often tell us they have no idea whether we’re in the office or out of it.

That’s exactly how we want you to feel.

It was a Sunday in mid-March when Saudia Arabia kicked off a price war with Russia, which facilitated an unprecedented 65 percent drop in the price of oil just as the blistering effects of a global pandemic created the largest destruction of energy demand in the history of mankind.

We were on it.

We reached out to our clients to help them hedge their positions, keep them in compliance and manage their physical assets. If your portfolio took a bath this spring, you weren’t working with Mobius.

The market swings that played out in March and April were extremely improbable. But we saw them coming, and we helped our clients understand both how to mitigate risk and prepare for the magnitude and duration of the losses to come.

This is going to go on longer than you think.

We know this because we’re a team of the sharpest and most experienced operators in the industry. But what we work very hard to do is back this conventional wisdom up with data. Instead of issuing trite statements to reassure jittery clients during this pandemic we put our heads down and worked to help our clients understand how price impacts capital structures, how long they can survive unthinkable scenarios like when crude goes to zero, how they can be sure they’re selling physical molecules in the eye of this storm.

We’re ready for hurricanes. We were ready for the OPEC glut. We were ready for COVID-19.

What have we learned from all this?

The market can remain irrational longer than you can remain solvent.

Expect extreme volatility to continue.

Those who wield information — and especially data — wisely will be able to create scale within their businesses even during these terrifying times.

Demand shocks are here to stay.

Be they the product of pandemic shutdowns or something else, you can forget about reliability in energy demands.

A significant amount of capital will change hands in the next year.

That means winners and losers. The winners will find and deploy subject matter experts to respond smartly to this wild ride and consolidate wealth.

The losers will blow away in the hurricane.