Income investing guru Marc Lichtenfeld is teasing an “Ultimate AI Income Opportunity.”
One that pays out “AI Royalties” every single time a chatbot receives an inquiry.
The Teaser
This money is already flowing and has amounted to out more than $800 million in payouts since the launch of ChatGPT.
Marc Lichtenfeld has worked as a trader, investment analyst, fund manager, and now, investment newsletter editor and promoter.
We have reviewed some of his past income-related teasers, including his Ultimate Dividend Package and TF3 Chip Company, among others.
In historical terms, investment in artificial intelligence (AI) is unprecedented.
It has already surpassed every monumental project ever undertaken and it's still only in its first decade of commercial existence.
However, to keep scaling AI at the current pace it's going to take one thing…energy.
It's a theme we've been repeating in other AI-related teaser reviews and Marc agrees.
He says it's not going to be solar, wind or even nuclear that saves the day or data for AI, at least not yet. But rather American oil and gas.
The same resource that powered the industrial revolution and is now restoring American energy supremacy, is also going to power the next phase of the AI revolution.
So far, I would say Marc's teaser is on the right track.
America does have the largest untapped oil reserves on the planet and the current administration is trying to unleash it by opening up federal lands for drilling and rolling back restrictions.
As a result, the stage is set for the biggest energy boom since the 1970s and investors who know exactly how to play it, stand to make a small fortune.
Marc says he's going to show us the “#1 way to invest America's surging oil and gas production“, which promises to also provide us with a steady stream of income.
The Pitch
It's the late Charlie Munger's “favorite investment” and it's only revealed in a new report dubbed “The AI Income Blueprint: How to Collect 16 Royalty Payouts Per Year.”
The report is included in a trial subscription to Marc's flagship newsletter, The Oxford Income Letter.
A trial subscription costs $99 upfront for the first year (normally $249) and it comes with a few bonus reports and access to several model portfolios.
The Best Way to Profit from the AI Energy Boom
It's not oil futures, ETFs or blue chip energy stocks.
Instead, Marc is teasing the greatest passive income investment ever – a royalty on an income-producing asset.
Charlie Munger figured this out way back in 1962, when he was golfing with a buddy who happened to be in the oil and gas industry.
One day while out on the links he let Munger in on an investment that could hand him consistent monthly income with just a small initial investment.
Munger put up $1,000, which went a lot further then, then it does now, and over the course of the next half a decade, he ended up receiving as much as $70k in annual income from that investment.
This is the potential of oil and gas royalties.
As an avid Wesco Financial and Daily Journal annual letter reader, I'm familar with this story, and there are some slight differences to what Marc is teasing.
First, Charlie acquired his stake at a oil royalty auction, so it was, in effect, a private investment.
Second, the timing was also in a word, great. As the 1973 oil embargo would soon push up oil prices to previously unseen levels.
Despite this, there are some parallels to today, at least in the last tense.
The world is currently experiencing the largest energy supply shock on record, which recently made oil prices notch their largest one-month gain ever!
Add in the unprecedented demand from energy hogs like AI data centers and the opportunity is, arguably, just as good, or even better than in the 70s.
But there are dozens of publicly-traded oil and gas royalties, which one should we buy and is there such a thing as “AI Royalties?”
Revealing Marc Lichtenfeld's Ultimate AI Income Opportunity
When it comes to his top pick and the central theme of this teaser, Marc delivers the clues:
- This oil and gas royalty owns nearly 900,000 acres of West Texas land.
- It doesn't just own oil and gas royalties, it owns the land, wells, and the water rights.
- It was the best-performing S&P 500 oil and energy stock of 2024.
Marc is talking about Texas Pacific Land Corp. (NYSE: TPL)*.
- TPL owns 882,000 acres of prime Permian Basin land.
- Besides it's oil and gas royalty interests, it also generates revenue from surface land leases and by providing treated water to project sites.
- It was the best-performing S&P energy stock of 2024 and one of the best-performing overall.
However, we're not done yet, as Marc says there's a second royalty play that could be just as lucrative.
- This royalty trust has generated $120 million over the last four years, has no debt, and pays out 95% of everything it earns to unit holders.
The second pick sounds an awful lot like Permian Basin Royalty Trust (NYSE: PBT).
- Over the last four years prior to the current one, PBT generated $126.6 million in income. It also has no debt and pays out 99% of everything it earns.
Low Risk, High Upside?
At the most basic, fundamental level, artificial intelligence needs three things:
- Land
- Water
- Energy
Without the first, data centers obviously don't get built.
Once built, without a steady, reliable source of electricity, data centers would be about as useful as a pet rock.
Lastly, once operational, most large data centers consume around 5 gallons of water per day, without it, they would quickly overheat and have to shut down.
Marc's picks address these base-level needs.
North Virginia may be “data center alley” and leads in terms of data center builds today, but Texas is projected to become the “lone AI state” and take the top spot over the next few years.
Land-owning royalty trusts that pay us while we wait, as opposed to owning land, and just waiting, are a low-risk, moderate-upside way to play the AI Infrastructure build out.
TPL and PBT are not cheap anymore, with each sporting price/book ratios above 20x. However, they do own tangible, income-generating assets that cannot be duplicated and which will only appreciate in value over the long-term, especially in TPL's instance. So a premium is to be expected.
If you already own a stake, like myself, hold. If you don't, dollar-cost average in at lower prices over time.
Quick Recap & Conclusion
- Income investing guru Marc Lichtenfeld is teasing an “Ultimate AI Income Opportunity” that pays out “AI Royalties” every time a chatbot receives an inquiry.
- There's no such thing as “AI Royalties” yet, but Marc is teasing the next best thing, oil and gas royalties that provide the land, energy, and water AI is dependent on.
- The names of a pair of royalty trusts are revealed in a new report “The AI Income Blueprint: How to Collect 16 Royalty Payouts Per Year.” A subscription to Marc's flagship newsletter, The Oxford Income Letter, is needed and it costs $99 upfront for the first year (normally $249).
- Fortunately, we were able to reveal both picks for free! They are Texas Pacific Land Corp. (NYSE: TPL)* and Permian Basin Royalty Trust (NYSE: PBT).
- Neither of Marc's picks are cheap, but TPL is a solid Texas land bet and PBT owns overriding interests in valuable oil and gas producing properties in the Permian Basin.
Will Texas become the AI data center capital of the world? Leave a Yes or a No in the comments.
*The author owns shares in Texas Pacific Land Corp. (NYSE: TPL).