Entries by Simon Lack

Confronting Asymmetric Risks

SL Advisors Talks Markets
SL Advisors Talks Markets
Confronting Asymmetric Risks







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The Fed’s mid-week policy meeting will punctuate a busy earnings week. Sell-side analysts continue to ratchet down earnings forecasts. Factset reports bottom-up 2023 earnings expectations of $226, down over 10% compared with last spring when Fed tightening started to have an impact. Energy continues to be a bright spot, providing positive surprises in 4Q earnings […]

Energy Transfer’s Distribution Management

SL Advisors Talks Markets
SL Advisors Talks Markets
Energy Transfer’s Distribution Management







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Last week Energy Transfer (ET) raised their quarterly distribution to $0.305, restoring it to a level last paid in July 2020. This cheered a great many people. Among the financial advisors we talk to it is the most widely held individual name. It is perennially cheap. JPMorgan, Morgan Stanley and (according to Refinitiv) 94% of […]

Behind Soft Natural Gas Prices

SL Advisors Talks Markets
SL Advisors Talks Markets
Behind Soft Natural Gas Prices







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Most of the commodity questions we get relate to crude oil, since its price reflects energy investor sentiment and can move midstream prices. When oil and pipelines are down, people want to know why the volume dependency of midstream cashflows isn’t visible in stock price performance. The correlation between the two is unstable (see Energy’s […]

Will Kinder Morgan Cover Its Cost Of Capital?

SL Advisors Talks Markets
SL Advisors Talks Markets
Will Kinder Morgan Cover Its Cost Of Capital?







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Kinder Morgan (KMI) reported earnings last week and announced that President Kim Dang will be taking over from Steve Kean as CEO. This prompted us to look back over KMI’s history, which reflects some of the best and worst of the MLP sector for the past ten years. A decade ago the shale revolution drove […]

The Slow Death Of 60/40

SL Advisors Talks Markets
SL Advisors Talks Markets
The Slow Death Of 60/40







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On the weekend the WSJ highlighted contrasting views of the 60/40 portfolio between Goldman Sachs and Blackrock. The classic asset allocation had its worst year in nominal terms since the 2008-9 Great Financial Crisis (GFC) and adjusted for inflation the worst since the Great Depression. It shouldn’t be a surprise. Bond yields have been too […]

US Oil And Gas Production Growing

SL Advisors Talks Markets
SL Advisors Talks Markets
US Oil And Gas Production Growing







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The US Energy Information Administration (EIA) published their Short Term Energy Outlook last week. The EIA produces an enormous amount of data and is apolitical. For energy investors it’s really all good news. US crude production is expected to grow, but slowly. Natural gas production will increase at a faster pace with export growth more […]

Bearishness Is Holding Back Energy

SL Advisors Talks Markets
SL Advisors Talks Markets
Bearishness Is Holding Back Energy







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Michael Wilson, Morgan Stanley’s chief equity strategist, thinks stocks could fall 22% this year. Wall Street is bearish, and the mood has spread to consumers. Earnings forecasts are falling and households report expectations close to the depths of the 2008 great financial crisis. A lot of smart people are negative. We don’t spend any effort […]

Don’t Bet On A Return To 2% Inflation

SL Advisors Talks Markets
SL Advisors Talks Markets
Don’t Bet On A Return To 2% Inflation







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The Fed has a poor forecasting record, something Wall Street never tires of pointing out. The chart below from Barclays shows the FOMC’s constant self-correction on inflation through successive meetings. Fed chair Powell downplays the blue dots but often refers to them at his press conferences. Usually, the dots move towards the market as the […]

Last Year’s Most Popular Blog Posts

SL Advisors Talks Markets
SL Advisors Talks Markets
Last Year’s Most Popular Blog Posts







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You might think last year’s 39.5% outperformance of the S&P500 by the pipeline sector was a record but in 2016 the margin was 42.0%. This followed a harrowing 41.0% underperformance the prior year. However, the past two years have been the best on record, with the American Energy Independence Index (AEITR) beating the S&P500 by […]

Looking Back on 2022

SL Advisors Talks Markets
SL Advisors Talks Markets
Looking Back on 2022







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Readers know not to expect bearish views on energy from this blog. A year ago, we offered ten reasons why we thought the outlook was positive (see The Upside Case For Pipelines – Part 1 and Part 2). We were right about the direction but not all our reasons played out. Below is a report […]

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