Entries by Simon Lack

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Rising Oil Output Is Different This Time

Although we’re used to reading about growth in U.S. shale production, recent figures from the Energy Information Administration are still striking. Crude oil output from the Permian in west Texas is set to reach 3 Million Barrels per Day (MMB/D) in March, up by more than 70K from February. Output is growing at an increasing […]

Why Risk Parity Could Boost Energy Stocks

Risk Parity is a portfolio construction technique that seeks to allocate capital so as to maintain similar levels of risk from each asset. Some commentators are blaming it for the recent market turmoil, since superficially its practitioners are expected to reduce risk when it rises. That can often mean selling stocks. AQR is among the […]

The Positives Behind Exxon Mobil’s Earnings

The sharp drop in equities since Friday is notable for missing any obvious catalyst. Interest rates have been headed higher, but they’re far too low to offer value and the Equity Risk Premium continues to strongly favor stocks over bonds. A sharp move higher in interest rates could shift relative valuations away from bonds, but […]

Down’s A Long Way for Bonds

In my 2013 book Bonds Are Not Forever; The Crisis Facing Fixed Income Investors, I forecast that interest rates would stay lower for longer than many people thought. The 2008 Financial Crisis was caused in part by excessive levels of debt. Interest rates below inflation are a time-tested way to gradually lessen the burden of […]

ETFs and Behavioral Finance

There are over three million stock indices in the world, more than 70 times as many as actual stocks. Before learning this startling fact in the FT the other day, I might have guessed wildly at 1% of this figure, thinking it way too high. Although the growth in Exchange Traded Funds (ETFs) is not […]

AMLP's Tax Bondage

Tax Freedom Day is that point in the year when you’ve figuratively earned enough to pay all your taxes. For the rest of the year you can feel as if your income is your own. Naturally, it can never come soon enough. Investors in the hopelessly tax-burdened ETF, the Alerian MLP Fund (AMLP) face the […]

Rising Rates and MLPs: Not What You Think

Five years ago my book Bonds Are Not Forever; The Crisis Facing Fixed Income Investors argued that interest rates were likely to stay lower for longer. Excessive debt led to the 2008 Financial Crisis, and our thinking was that low rates were part of the necessary healing process, allowing the burden of debt to be […]

An Expensive, Greenish Energy Strategy

Most of the U.S. has been unseasonably cold – enduring twelve consecutive days of sub-freezing highs in New Jersey while owning a home in SW Florida is your blogger’s self-inflicted wound. The pain is only slightly ameliorated by news of record natural gas consumption of over 140 Billion Cubic Feet (BCF), almost twice the annual […]

MLP Distributions Through the Looking Glass

Alerian’s page showing annual distribution growth for the Alerian MLP Index (AMZ) contains their most popular chart (it’s the 4th one down under “Figures and Tables”). It’s no wonder – the steadily growing distributions it portrays should be enough to calm any income seeking, excitement-averse investor. Since it’s their most viewed page, many investors must […]

MLPs Glimpse Daylight

Tromso, Norway, sits 215 miles inside the Arctic Circle. It is one of the planet’s most northerly human settlements. Around January 25th at lunchtime, its inhabitants drop what they’re doing and gather outside for their first glimpse of the sun in two months. It’s only visible for four minutes, but the first natural shadows after […]

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