Episode 16: Celebrity Climate Change Shaming

Episode 16: Celebrity Climate Change Shaming
SL Advisors Talks Energy

 
 
00:00 / 00:06:46
 
1X
 

In this week’s podcast, Simon Lack complains about celebrities lecturing us on climate change

Sources mentioned in podcast:

Leonardo DiCaprio

Katy Perry at Google Camp

Julia Roberts, James Cameron and Al Gore

If you missed our webinar last week, titled “Volumes, Cashflow and ESG”, here’s a link to a replay.

Episode 15: Climate Extremists and Falling US CO2

Episode 15: Climate Extremists and Falling US CO2
SL Advisors Talks Energy

 
 
00:00 / 00:05:46
 
1X
 

In this week’s podcast, Simon Lack talks about climate extremists and good news on US CO2 emissions

 

Sources mentioned in podcast:

Greta Thunberg in the Economist

New York Post on where CO2 emissions are growing

Extinction Rebellion video protesting on top of commuter train

EIA Short Term Energy Outlook

Episode 14: The Misdirection of Extinction Rebellion

Episode 14: The Misdirection of Extinction Rebellion
SL Advisors Talks Energy

 
 
00:00 / 00:06:19
 
1X
 

The Misdirection of Extinction Rebellion

 

In this week’s podcast, Simon Lack talks about Extinction Rebellion’s misguided objectives

Episode 13: Review of Russell Gold’s Superpower

Episode 13: Review of Russell Gold’s Superpower
SL Advisors Talks Energy

 
 
00:00 / 00:07:15
 
1X
 

Review of Russell Gold’s Superpower

In this week’s podcast, Simon Lack talks about his conclusions after reading Russell Gold’s recent book, Superpower

Episode 12: Greta’s Grandstanding

Episode 12: Greta’s Grandstanding
SL Advisors Talks Energy

 
 
00:00 / 00:07:44
 
1X
 

Greta’s Grandstanding

 

In this week’s podcast, Simon Lack talks about Greta Thunberg’s UN speech and long term projections for energy use

 

Episode 11: Iran Teaches Dems Geopolitics

Episode 11: Iran Teaches Dems Geopolitics
SL Advisors Talks Energy

 
 
00:00 / 00:05:50
 
1X
 

Iran Promotes Fracking

 

In this week’s podcast, Simon Lack is going to talk about the lesson we should take from the attack on Saudi Arabia’s oil infrastructure

 

Episode 10: Political Promises on Climate Change

Episode 10: Political Promises on Climate Change
SL Advisors Talks Energy

 
 
00:00 / 00:09:07
 
1X
 

Political Promises on Climate Change

 

In this week’s podcast, Simon Lack talks about the impractical promises from Democrat presidential candidates on climate change, and adds an update on the Blackstone-Tallgrass deal (6 minute mark). 

 

 

Episode 9: Blackstone and Tallgrass

Episode 9: Blackstone and Tallgrass
SL Advisors Talks Energy

 
 
00:00 / 00:08:15
 
1X
 

 

In this week’s podcast, Simon Lack is going to talk about the ethical gulf revealed by Blackstone’s offer to take Tallgrass private.

 

Links:

Private Equity Sees Value in Unloved Pipelines

https://sl-advisors.com/private-equity-sees-value-in-unloved-pipelines

Blackstone and Tallgrass Further Discredit the MLP Model

https://sl-advisors.com/blackstone-and-tallgrass-discredit-mlp-model

 

 

Episode 8: Private Equity Buyers

Episode 8: Private Equity Buyers
SL Advisors Talks Energy

 
 
00:00 / 00:07:17
 
1X
 

 

In this week’s podcast, Simon Lack talks about the difference in value seen by private and public market investors.

 

Show Notes:

Energy remains out of favor (:46)

Recently dropped to 4.5% of S&P500 (:48)

FT wrote about Why US energy investors are experiencing a crisis of faith (1:01)

Being an energy investor requires religious conviction (1:12)

Attractive dividend yields (1:22)

Growing cashflows (1:23)

Malaise caused by reinvesting too much cash (1:36)

Poor expense control (1:46)

Fears of global warming (1:49)

Blackstone bought 56% of Tallgrass they didn’t already own (2:00)

GS estimates $250BN in private capital for infrastructure and natural resources (2:20)

Ultra low bond yields + tremendous demands for stable, long term flows (3:11)

Pension funds are part of the demand. US pensions 28% in fixed income, up 3% (3:19)

Blackstone paying 36% premium (4:06)

All good news, lifted the sector (4:20)

Except seems a bit of bait and switch (4:30)

Blackstone bought 44% earlier this year (4:40)

But buying 56% costs less than buying 44% earlier this year (4:52)

Questions asked about why they hadn’t bought whole company (4:55)

Meanwhile stock has slid over uncertainty about capex, recontracting on pipelines (5:04)

Blackstone took opportunity to bid for 56% they didn’t own at $19.50, 35% premium (5:15)

Management team gets to sell their shares at $26.25, 35% above deal price (5:33)

Good to see private equity buying another pipeline company (6:27)

Finding value in sector (6:32)

Disappointing to see another management team structuring transaction with superior rights for themselves compared with other investors (6:37)

 

Links:

Why US energy investors are experiencing a crisis of faith

https://www.ft.com/content/71655bca-c8c2-11e9-a1f4-3669401ba76f

Episode 7: Pension Funds

Episode 7: Pension Funds
SL Advisors Talks Energy

 
 
00:00 / 00:08:19
 
1X
 

 

In this week’s podcast, Simon talks about the distortions showing up in bond markets.

 

Show Notes:

Interest rates are low (:40)

$17TN publicly traded debt has negative yields (:45)

Incredible reflection of price-insensitive buying (:50)

Reflects degree of risk aversion. Prefer the certainly of a loss in bonds rather than own stocks (:57)

But bond investors generally do good analysis (1:20)

Look at energy (1:27)

Perennially out of favor (1:28)

Valuations cheap, yields high (1:40)

American Energy Independence Index yields nearly 7% (1:42)

Investor sentiment poor, long term outlook uncertain (1:48)

But a look at bond yields on biggest companies shows bond investors more relaxed (2:00)

EPD, $63BN market cap, yields 6% while its 2054 bonds yield 3.9% (2:08)

KMI, $46BN mkt cap, has 2098 bonds yielding 5.1% (2:27)

In many cases the bond yields are 1.5% below the dividend yield (3:05)

Must be so much better to own the stock where dividends can grow (3:15)

Interesting piece blog called The Pension Fund Apocalypse by Colin Lloyd (3:27)

He highlights the problems for pension funds by low rates (3:33)

Estimates that $26TN in pension assets earning negative real return on fixed income allocation (3:44)

Problem is that bond demand remains strong (4:13)

US pension funds incredibly raised their fixed income from <25% to 28% last year (4:17)

They should be investing less bonds given returns

But regulations make it hard (4:50)

More broadly, bond yields reflect some risk aversion and inflexible investing regulations (5:28)

Investors in energy company bonds are pretty calm, shown by low yields (6:29)

It’s a factor keeping interest rates low (6:58)

All suggests that stocks are cheap, not over the next week or two but over the next 2-5 years (7:16)

 

Suggested Links:

Bond Buyers Should Buy Pipeline Stocks

https://sl-advisors.com/bond-buyers-should-buy-pipeline-stocks

The Pension Fund Apocalypse

https://www.aier.org/article/pension-fund-apocalypse

 

 

 

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