Robert Mullin, founder of Marathon Resource Advisors, told Kevin Muir on The Market Huddle that resource-sector capital spending has fallen about 50% in nominal terms and about 75% after inflation since its 2012-2014 peak.
Most allocators work to remove volatility from their portfolios. Robert keeps a small book that is deliberately long volatility, and he said that book and his short book shape the path of returns more than the longs do.
"I covet inexpensive convexity."
Robert has invested in resource stocks since at least the late-1990s uranium boom, which he watched swell to about 600 companies and then shrink back to about a dozen. His fund is built on high-dividend resource equities, with a short book and a long-volatility sleeve set against them.
The full interview is covered here so you can skip it. 69 minutes of audio, 9 minutes of reading.
Here are the 9 calls that matter.
The Market Huddle · Oct 24, 2026 · 1h 9m · 60m saved
With Robert Mullin, Founder of Marathon Resource Advisors
Key Takeaways
A short book that loses 20% still lifts a 100% long-only gain to 135% at 150% long and 75% short
Marathon runs a 1.5-2% long-volatility book, now holding TLT calls and long yen against the euro and the dollar
Resource capex is down about 75% after inflation since 2012-2014, so the projects for 2025-2035 supply were never started
UK North Sea producers trade at 2-3x cash flow with 15% dividend yields under roughly 80% windfall tax rates
Marathon is short the big-cap copper majors and long a small basket of next-generation copper developers
Supertanker spot rates have reached $800,000 to $1.2M a day, against roughly $50,000 a year ago
Marathon trimmed gold and is waiting for a central-bank pivot back toward rate cuts before adding again
1. Shorts Shape the Path
Robert said the long book, made up of high-dividend resource equities, produces most of Marathon's return. The short book and the long-volatility sleeve decide whether the fund survives drawdowns without being forced to sell at the bottom.
Marathon's short book and long-volatility sleeve matter more than the longs to how returns arrive
"The path function can be very, very different... the short book, the long-volatility component of what we do — those are the things that influence the path function, and that at the end of the day I think is a more important driver of returns." — Robert Mullin
Robert uses an AW Jones-style structure of 150% gross long and 75% gross short. The arithmetic works even when the shorts lose money.
A short book that loses 20% still beats a long-only fund by 35 points
"Even if you lose 20% on your short book over the course of that same performance period, you've lost 20% times 75 gross... you're up 135% instead of 100%." — Robert Mullin
A long book that doubles at 150% gross adds 150 points. A 20% loss on a 75% gross short book costs 15 points, which leaves 135% against 100% for a plain long-only fund. The short book also cuts losses in a falling market, which lets the fund buy resource stocks yielding 7-12% when a sell-off pushes their yields to 12-18%.
