Author Archive for: Simon Lack
Entries by Simon Lack
China Quietly Dumps Bonds
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 […]
Income Investors Should Return to Pipelines in 2019
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 […]
Stocks Are the Cheapest Since 2012
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 […]
Pipeline Dividends Are Heading Up
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. […]
Asset Classes: There’s Nowhere to Hide
If you feel like it’s been a tough year in the market, you’re not alone. In 2018, virtually no asset class has provided safety. At -3%, US equities are down less than many other asset classes. Developed market equities have slumped 16%, similar to emerging markets equities (-17%) and energy (-15%). The Trump Administration strategy […]
Buybacks: Why Pipeline Companies Should Invest in Themselves
Weakness in the pipeline sector over the past couple of years has caused soul-searching and changes to corporate structure. Incentive Distribution Rights (IDRs), which syphon off a portion of an MLP’s Distributable Cash Flow (DCF) to the General Partner (GP) running it, have largely gone. Many of the biggest MLPs have abandoned the structure entirely, […]
Leaderless Britain Stumbles Towards Brexit
Although it’s 36 years since I last lived in England, I retain a deep affection for the country where I grew up, as well as my English accent (so say my American friends, anyway). I’m often asked my opinion of Brexit – I have British friends on both sides of the Leave/Remain divide. While I […]
Environmental Activists Raise Values on Existing Pipelines
Canada’s struggles to get its crude oil to market have been a source of immense frustration if you’re an Albertan oil producer, or a huge success if you’re an anti-fossil fuels activist. Last week, Alberta’s premier Rachel Notley imposed almost a 9% cut in production in order to raise prices. Shortage of available infrastructure had […]
Steel Tariffs Show Up in Surprising Places
The G20 meeting on the weekend produced a mildly surprising rapprochement between the U.S. and China on trade. Most commentators regard the Administration’s serial imposition of tariffs negatively. Stocks certainly liked the possibility of a lower temperature around this rhetoric. In spite of the U.S.’s many trade disputes, the economy shows little sign of suffering. […]
