Robert Mullin, founder and chief investment officer of Marathon Resource Advisors in San Francisco, advocates for renewed investor focus on resource stocks amid growing market enthusiasm for artificial intelligence (AI). Mullin, who has over 30 years of experience in the energy and natural resources sector, argues that these industries remain undervalued and fundamentally stronger than many perceive.
Mullin highlighted the example of SLB, formerly Schlumberger, which surged 87 percent by August 2026 before experiencing a recent price correction. Despite this pullback, he maintains the stock as a solid investment but explained that regulations at the Sohn Hearts & Minds conference where he invests require him to pick new names. His investment philosophy centers on valuing companies based on discounted cash flow—a method he contends is more reliably applicable in resource sectors than in technology or other areas of the market.
“Most sectors today bear little relationship to the real cash generated by businesses,” Mullin said, while resource companies tend to maintain a modest correlation between market value and cashflow capacity. He contrasted the current outlook with the past decade, stating that the global energy sector is in comparatively good shape despite widespread assumptions otherwise.
A long-term driver of sector strength, Mullin notes, is the persistent underinvestment in energy and mining projects. Capital expenditures in these industries are down roughly 50 percent nominally and about 75 percent when adjusted for inflation over the last decade. Because resource projects typically require around ten years to complete, the failure to invest adequately between 2017 and 2022 has created a looming shortage of new production capacity through 2025 to 2029.
Several factors have contributed to this capital drought. Between 2015 and 2019, investors grew wary as previous capital injections often resulted in poor returns. The global financial crisis aftermath and quantitative easing spurred misallocated investments and overpriced acquisitions during commodity peaks, further dampening enthusiasm. A second wave of underinvestment emerged from around 2020, driven by environmental, social, and governance (ESG) mandates and decarbonization efforts. More recently, Mullin pointed to AI’s rise as the first technology boom in decades that has not concurrently increased demand for energy and raw materials, a departure from previous cycles.
Mullin also emphasized geopolitical and market shifts that have raised concerns about supply security. The decades leading to 2020 were marked by deflationary trends and global stability that favored just-in-time inventories sourced from anywhere in the world. This is no longer the case, as new realities force companies and governments to prioritize redundancy and resilience in supply chains. The Russian invasion of Ukraine in 2022 underscored this vulnerability, though its initial market impact was smaller than feared and briefly overshadowed by enthusiasm over AI developments.
Ultimately, Mullin contends that the resource sector remains critical to the broader economy, despite representing only about 3 to 4 percent of global equity market capitalization. He warns that market participants need to reassess the sector’s fundamental importance, as resource shortages and supply risks are increasingly likely to shape economic growth and technological progress in the coming years.