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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
Consumer sentiment is as bad as 1980 when inflation was 13%. The Fed funds rate swung from 17% to 9% before peaking at 19% in early 1981. Eight US marines died in Iran in a failed attempt to rescue our hostages. John Lennon was shot. No wonder Ronald Reagan won election later that year. Consumers […]
Christmas pudding is among my favorite traditions of the season. Like marmite, it’s only offered by English parents, and failure to acquire a taste when young quickly becomes permanent. Our children were offered a perfunctory opportunity and only one chance at rejection, a rule I imposed to ensure an adequate supply for the rest of […]
