Entries by Simon Lack

Equities Rapidly Price A Pandemic

S&P earnings are estimated to be +8% this year, according to Factset’s most recent publication. The sharp sell-off in stocks last week shows that markets are looking ahead to revised guidance. Covid-19 is a true black swan event that is challenging people to assess its impact. For example, my daughter just canceled a Caribbean cruise […]

Coronavirus Dominates Thoughts on Cheniere

Few sectors are immune from coronavirus fears, and energy is no exception. Although U.S. midstream energy infrastructure is overwhelmingly domestic, growing oil and gas exports have increased business sensitivity to global export demand. Liquified Natural Gas (LNG) prices for Japan and South Korea (the Japan/Korea Market, JKM) have fallen dramatically in recent months. This was […]

Gulf Tensions Back in Play

Just over three months ago, Saudi Arabian oil facilities were put out of action by a drone and missile strike. Oil prices jumped. It seemed indisputable than Iran was behind the attack – the sophistication was beyond that believed available to the Yemeni Houthi rebels who claimed responsibility. Saudi retaliation appeared inevitable, as half their […]

News on our American Energy Independence ETF (USAI)

Last week shareholders of the American Energy Independence Fund (USAI) approved its reorganization into the Pacer American Energy Independence Fund. Today, Pacer took over from SL Advisors as the fund’s advisor. We expect that this will allow Pacer Advisors to leverage its resources for and focus its marketing and distribution efforts on growing USAI’s AUM. […]

Should Closed End Funds Use Leverage?

Closed end funds (CEFs) are an obscure sector of the market with a small but fiercely passionate following. Because they have a fixed share count, they can trade at a premium or discount to the value of their holdings, which are usually public equities or debt.  This creates appealing opportunities to buy at a discount […]

When Will MLPs Recover?

Our blog topics are often informed by the subjects that come up in conversations with clients. October was a wrenching month, with the Alerian MLP index slumping to -6% versus +2% for the S&P500. MLPs have lagged equities by an astonishing 22% YTD. Over the last couple of weeks we have been busier than usual […]

Energy Transfer’s Weak Governance Costs Them

Three years ago, Energy Transfer Equity (then ETE, now ET following its 2018 simplification) cleverly extricated itself from a ruinous attempted acquisition of Williams Companies (WMB). Having relentlessly pursued his target, ETE CEO Kelcy Warren came to regret the terms he’d offered as rating agencies criticized the overly leveraged contemplated combined entity. Having failed to […]

MLPs No Longer Represent Pipelines

As recently as five years ago, the terms “MLPs” and “pipelines” were interchangeable. If you wanted to invest in pipelines for their steady growth and attractive tax-deferred yields, you had little choice but to be a K-1 tolerant, MLP investor. MLP-dedicated funds were developed to provide retail exposure to the sector, but the corporate tax […]

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