Kinder Morgan (KMI) kicked off pipeline company earnings last week. Their results contained no big surprises. Distributable Cash Flow (DCF) for the year came in at $4.73BN, up 5.5% versus 2017’s $4.48BN. Leverage finished the year at 4.5X (Net Debt/Adjusted EBITDA). KMI has argued previously that their diversified business could sustain a 5.0X ratio, something […]
A few years ago Vanguard invited me to their campus to give a presentation on my just-published book, The Hedge Fund Mirage. Vanguard’s business model is the antithesis of the hedge fund industry, and they were curious to hear from that rare breed, a hedge fund critic. The company’s frugal culture runs deep. As I […]
Energy infrastructure roared higher during the first six trading days of January. After four days, the sector had recovered December’s losses. Two days later, it had almost recouped all of 2018. It was a complete reversal of last month, when slumping equity markets dragged pipeline stocks lower. It’s looking increasingly likely to us that automated […]
Last week Fed chairman Jay Powell walked back his earlier, clumsy comments which had implied several additional rate hikes in 2019. His words at the press conference following their December 19 meeting were poorly considered, “Maybe we’ll be raising our estimate of the neutral rate and we’ll just go to that, or maybe we’ll keep […]
Blog pageviews and comments help us gauge how relevant our topics are. Writing is more enjoyable when readers engage. This blog gets reposted across many websites, including Seeking Alpha and Forbes.com. The feedback from subscribers often leads to a useful dialog and informs later choice of topics. Below are the themes that resonated in 2018. […]
Fear of foreigners dumping U.S. bonds has periodically resurfaced for as long as most market participants care to remember. One country’s trade deficit is another one’s surplus (although they puzzlingly never net out globally). In the U.S., we import more than we export, and conveniently the surplus dollars our foreign trade partners accumulate are partially […]
MLPs have become more attractively priced compared with other income-oriented sectors. One way to see this is to compare the trailing four quarter yield. REITs and utilities have remained within a fairly narrow range, while MLPs rose sharply during the 2014-15 oil collapse. After a partial recovery, weakness over the past year or so has […]
Christmas couldn’t come soon enough for investors – at least the market can’t fall when it’s closed. Record outflows from equity funds accompanied one of the worst Decembers on record (so far). So sharing traditional fare on Christmas Eve (fish) and Christmas Day (turkey) with family and close friends was especially enjoyable. We have much […]
For investors who seek despondent sellers, look no further than energy infrastructure in late 2018. The Alerian MLP Index made its all-time high way back in August 2014. It currently sits 43% lower (including dividends). Barring a strong recovery in the last days of December, returns for three of the past four years are negative. […]
