In early November when Pfizer’s vaccine announcement triggered a strong rally, technology stocks lagged small cap value. Having been out of favor for years, the Russell 2000 sprang to life, drawing in buyers at the expense of tech. The relative movement of tech to value, defined as the ratio of the Nasdaq and Russell 2000 […]
Modern Monetary Theory (MMT) is taking hold. Relying on the insight that a government can never go bankrupt in its own currency, it posits that deficits don’t matter until they cause inflation (see our review of The Deficit Myth by Stephanie Kelton). On a week that incoming President Biden unveiled a $1.9TN package to fight […]
The U.S. Energy Information Administration (EIA) is generally apolitical – they’re not championing any single energy source. That may change under the new Administration, and they may become a shrill for renewables, but so far, they largely report data. Yesterday their website carried Renewables account for most new U.S. electricity generating capacity in 2021, highlighting […]
The cold winter currently being endured in north-east Asia isn’t just a boon for those hoping the planet isn’t burning up. It is setting a fire under local prices for Liquified Natural Gas (LNG). Because of the relatively high cost of moving LNG by tanker, regional price differences can be far wider than for crude […]
The S&P500 (SPTR) had a strong decade, returning 13.6% p.a. from 2011-20. By contrast, MLPs had a lousy ten years, delivering –1.2% p.a. The reasons have been well documented on this blog and scarcely need repeating. The Shale Revolution induced overinvestment which led to excessive leverage. Distribution cuts followed, driving away many traditional MLP investors. […]
Although we generally write about investing in midstream energy infrastructure, we find macro subjects interest our readers too. In April, not long after the market low, The Stock Market’s Heartless Optimism was popular, as any guide to the market’s direction was eagerly sought. We regularly use the Equity Risk Premium (ERP) to illustrate the relative […]
Writers care what their audience thinks, and we monitor pageviews and comments to learn what resonates. For pipeline investors, a few months into the year it was looking like the mother of all bear markets. The sector had been persistently lagging the S&P500 since peaking in 2014, and pre-Covid the fundamentals were improving strongly. Fortunately, the recovery since then has repaired much of […]
It is the time for nostalgia. I fondly remember Christmases from my childhood in England with a close friend and our two families. Here in New Jersey, my wife maintains many of our English culinary traditions, since they’re from her childhood too. Christmas pudding (also called Plum pudding) was acquired weeks ago. None of our […]
“If I seem unduly clear to you, you must have misunderstood what I said” was Fed chair Alan Greenspan’s response during testimony to the Senate in 1987. Transparent communication has come a long way since then. Greenspan continued the policy of obfuscating responses, reflecting a belief that it improved the Fed’s operating flexibility by disguising […]
The biggest question for long term investors is why bond yields remain so low. The Equity Risk Premium (see Stocks Are Still A Better Bet Than Bonds) has favored equities for most of the time since the 2008 financial crisis. Inflation expectations remain well-anchored and are noticeably lower than a year ago. Investors don’t expect […]
