Editor's note: When an opportunity presents itself, you need to know how to approach it...
Most folks simply flock to the next big trend, hoping to strike it rich. But if you want to make the most of it, you need to find the critical, overlooked niches... That can lead you to some of the most lucrative investments.
Today's Masters Series is adapted from the July 29 issue of the free Altimetry Daily Authority e-letter. In it, Joel Litman – the chief investment officer at our corporate affiliate Altimetry – shows how two brothers made a fortune by shifting their perspective during an oil and natural gas "shale boom"...
A Billion-Dollar Future That Started in the Goat Shed
By Joel Litman, chief investment officer, Altimetry
The bitter cold seeped through wood planks in winter...
The tin roof trapped heat – and horseflies – in summer.
The Wilks family lived in that goat shed for six years – Voy, Myrtle, and their five children, including Dan and Farris.
Times were tough in 1950s Cisco, Texas. But Voy was resolute...
He believed that masonry could lift his family out of poverty. So Voy learned how to mix mortar, "butter" the bricks, and smooth the joints.
It was enough to turn a goat shed into a livable home.
Before honing his masonry skills, Voy had worked at a glove factory. And there was little room to move up. When Voy's boss refused him a modest raise, Voy quit his job and turned to bricklaying full time.
Dan and Farris followed their father into the trade shortly after high school. And they continued working in the masonry business for decades.
This is what helped the brothers step out of their goat shed and into a billion-dollar future.
The brothers established Wilks Masonry in 1995...
To start, the company focused on traditional masonry and then expanded into large-scale projects. It helped build the Texas Christian University and Oklahoma State University football stadiums.
Wilks Masonry is now a premier masonry contractor. It has won industry awards and achieved a quality rating that only the top 1% of registered U.S. businesses can get.
But this isn't Dan's or Farris' only claim to fame...
Like their father, the brothers knew an opportunity when they saw it. And in 2002, the pair recognized that hydraulic fracturing, or "fracking," was taking off in Texas.
For decades, oil and gas (O&G) companies couldn't access the resources beneath the earth. But new technology and fracking techniques suddenly made it possible.
Fracking uses sand and fluids to blast through rock formations and release the oil and gas trapped inside them.
Over time, advances in seismic imaging made it easier to identify shale deposits. Horizontal drilling techniques and fluid formulas made fracking more efficient than ever before.
These innovations set off a "shale boom" – an unprecedented surge in oil and natural gas production.
And the Wilks brothers were eager to be part of it... They used their masonry earnings to start Frac Tech Services in 2002.
The Wilkses built a fleet of heavy-duty trucks outfitted with engines and pumps designed for fracking. These pumps injected millions of gallons of fracking fluid into the ground to unlock oil and gas reserves.
Interestingly, this wasn't a total departure from their work at Wilks Masonry. Running that business taught the brothers how to manage heavy machinery, maintain equipment, and handle logistics.
This came in handy during the shale boom of 2005... Producers couldn't extract oil and natural gas fast enough. Shortages mounted and supply chains froze. And at one point, Frac Tech couldn't get the fracking equipment and supplies it needed.
So the company decided to make them. Frac Tech built its own pumps and fracking machines. The Wilks brothers even opened up a sand mine to create their own fracking fluid.
This pivot was a masterstroke...
And it helped set the company apart in an O&G niche called well completion. In 2011, the Wilks brothers sold Frac Tech for a whopping $3.5 billion.
These days, plenty of businesses have built their foundations on Frac Tech's legacy.
That single technology is what turned America from a net energy importer into the world's top oil and gas producer within about a decade.
The U.S. now pumps almost 14 million barrels of crude a day. That's more than any nation in history. Shale wells account for roughly two-thirds of that oil... and three-quarters of the country's natural gas.
And that's only the start. This year, we're expected to set a new record for crude production.
If you're looking for a powerful trend to put your money behind, consider the O&G industry.
Regards,
Joel Litman
Editor's note: Wall Street tends to silently "cash out" of positions that grow vulnerable, while the remaining investors are left holding the bag and taking big losses. And now, a similar shift is about to play out.
According to Joel, the same pattern he saw in the 2020 and 2022 sell-offs is reappearing. And that means Wall Street is about to move its money into another sector. To learn how you can protect your portfolio – and profit from Wall Street's latest sector rotation – click here.
