Entries by Simon Lack

Celebrating America

May 17 represented a memorable anniversary for me as it marked 40 years since I first moved to the US. Another Brit leaving the old world for the new. I arrived on an evening flight from Toronto where I’d spent a week with family. It was my first time in NY and such was the […]

Liberal Energy Policies Remain Good For Investors

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SL Advisors Talks Markets
Liberal Energy Policies Remain Good For Investors







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The energy transition’s long overdue reassessment was already under way by the time Russian missiles began falling on Ukraine. Fear of stranded assets has been replaced by the sudden need for energy security. At a recent JPMorgan energy conference, CEO Jamie Dimon repeated his call for a new “Marshall Plan” to ensure energy security for […]

The Fed Can’t Afford Two Mistakes

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SL Advisors Talks Markets
The Fed Can’t Afford Two Mistakes







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Amid the more hawkish Fed and consequent sharp drop in the market, the jump in real yields has not drawn much attention. The rise in ten year yields came with inflation expectations remaining well anchored at around 2.75%. TIPs yields rose with nominal ones. Factset earnings expectations don’t yet reflect the pessimism of public company […]

Texans Don’t Complain About Gas Prices

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SL Advisors Talks Markets
Texans Don’t Complain About Gas Prices







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People may disagree on whether this Fed is hawkish or not, but reactionary is not a controversial adjective. They first demonstrated this in waiting eighteen months after the Covid vaccine and fifteen months after the last $1.9TN slug of fiscal uber-stimulus to roll back their monetary accommodation. Quantitative Easing (QE) is more aptly followed by […]

Hydrocarbons Support The Four Pillars Of Civilization

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SL Advisors Talks Markets
Hydrocarbons Support The Four Pillars Of Civilization







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Vaclav Smil is a polymath whose prolific writing on energy has produced his latest book, How the World Really Works. You read Smil slowly, taking time to digest the facts and conclusions that are his trade. He combines expertise across several disciplines to explain the technology and inputs supporting modern western lifestyles. In Fossil Future, […]

Energy Realism Is Spreading

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SL Advisors Talks Markets
Energy Realism Is Spreading







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There were three stories last week that can best be characterized as providing energy realism. The fire at Freeport’s LNG facility sent US natural gas prices skidding, with the loss of 2 Billion Cubic Feet per Day (BCF/D) of export capacity. Freeport warned it’ll be at least three weeks before operations can resume – meaning […]

Even After A 30% One Year Return, Pipelines Remain Cheap

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SL Advisors Talks Markets
Even After A 30% One Year Return, Pipelines Remain Cheap







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When the MLP structure dominated midstream energy infrastructure almost a decade ago, yield was a popular valuation metric. MLPs typically paid out 90% or more (sometimes over 100%) of their Distributable Cash Flow (DCF). Comparing MLP yields with the ten year treasury provided a measure of historic valuation. By this metric, midstream isn’t cheap. The […]

The Hard Math Of The Energy Transition

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SL Advisors Talks Markets
The Hard Math Of The Energy Transition







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Getting to zero emissions by 2050, the goal set by the UN in order to limit global warming to 1.5° C above pre-industrial times, is technically well within reach. Not with intermittent solar panels and windmills – extracting all the minerals necessary for their manufacture plus enormous battery back-up in implausible.  Kinder Morgan’s enhanced oil […]

Fossil Future

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SL Advisors Talks Markets
Fossil Future







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Alex Epstein’s 100K Twitter followers have anticipated for months the publication of Fossil Future – Why Global Human Flourishing Requires More Oil, Coal, and Natural Gas – Not Less. Few authors have promoted a book more relentlessly. I awaited its publication eagerly. It is the follow up to Epstein’s 2014 book, The Moral Case for […]

Inflation Fears Moderate

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SL Advisors Talks Markets
Inflation Fears Moderate







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Maybe last week’s FOMC minutes had something for everyone. Some analysts seized on the consideration the Fed gave to tighter monetary policy: “They also noted that a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.”  On the other hand, the minutes noted that, […]

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