Grand Theft Auto: The California edition
Will there be a new regime in California before the next game is released
Grand Theft Auto is still delayed by Take Two. My question is will California have new governance before it’s released?
And on the matter of Grand Theft, that’s what you will feel like if you pick some wonderful California stock early before the herd.
For the better part of two decades, investing in California-domiciled companies has carried an invisible tax.
It wasn’t always visible on the income statement. Sometimes it showed up as a housing project trapped in litigation for a decade. Sometimes it was an offshore oil platform sitting idle while the pipelines rusted and the lawyers billed. Sometimes it was a fast-food chain watching its margins be compressed by mandate after mandate from a legislature that seemed to view business as a revenue source rather than an ecosystem worth protecting.
California has been the most regulated, most litigated, most expensive operating environment in the United States, and the market has priced that in.
Which is exactly why the moment may be approaching to look again.
Yesterday, the California primary happened. And something unusual occurred.
Steve Hilto, British-born, Fox News alumnus, David Cameron’s former senior adviser, Trump-endorsed, finished at the top of a crowded gubernatorial field.
He’s now heading to a November general election. Spencer Pratt, the reality TV villain who lost his Pacific Palisades home in the January 2025 fire and turned his rage into a mayoral campaign, is polling in second place in Los Angeles and is likely heading to a runoff against Karen Bass.
You can laugh at the casting. Or you can do what investors are supposed to do: follow the signal, not the noise.
California still sets American trends.
It did it with tax revolt (Prop 13, 1978).
It did it with immigration politics (Prop 187, 1994).
It did it with tech, with cannabis, with EV mandates.
When California moves, it eventually matters to the rest of the country. The question isn’t whether this political shift is aesthetically satisfying. The question is whether it’s real and what it means for the companies that have been quietly strangled by the old regime.
You can gamble on Kalshi for short-term gratification, or you can man up and invest in wonderful companies at fair prices that may be dear after the elections.
Think of each of these companies as a different kind of suppressed asset. Some are sitting on land whose value is politically contingent. Some are fighting regulatory battles that a single gubernatorial appointment could resolve. Some are being squeezed by labor mandates that one signature could roll back.
The one I shared before
SOC — Sable Offshore Corp.
This is the most politically charged name on the list, and the most immediate.
Sable operates three offshore platforms and a pipeline system in federal waters off the California coast: the Santa Ynez Unit, which was shut down after a prior operator’s pipeline spill in 2015.
The company has spent years and hundreds of millions of dollars repairing, inspecting, and re-permitting infrastructure that was never broken in the first place; it was shut down by a combination of regulatory inertia and a lack of political will.
SOC is the coil with the shortest fuse.
I have some more wonderful companies that I share with subscribers, but there’s more.
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