EUROPE’S ENERGY CRISIS IS KEEPING ENERGY PRICES AND INFLATION HIGH
America leads the world in oil and gas production. We believe midstream energy infrastructure offers predictable cash flows to investors..
Bonds Still Can’t Compete with Stocks
The Equity Risk Premium (ERP) is a handy way to compare valuations of equity with fixed income. It compares bond yields with the earnings yield on stocks (the earnings yield is reciprocal of the price/earnings ratio). Six years ago, when the Fed was well into quantitative easing and bond buying, it gave a clear signal […]
Kinder Morgan: Still Paying for Broken Promises
Broken promises aren’t quickly forgotten. That’s the hard lesson being learned by pipeline company managements, as the sector remains cheap yet out of favor. Kinder Morgan (KMI) reported good earnings on October 17th. Volumes were up, and they sold their Trans Mountain Pipeline (TMX), including its expansion project, to the Canadian Federal government. TMX is […]
Hedge Funds: Still Fleecing Investors with Expensive Mediocrity
A decade ago, the collapse of Lehman Brothers marked the psychological low of the 2008 Financial Crisis. Equity prices bottomed a few months later, in March 2009. Hedge funds had nimbly managed their way through the 2000-02 dotcom collapse, which led to substantial inflows over the next six years. By 2008 AUM had quadrupled, as […]
British Shale Revolution Crushed: America’s Unique Ownership of Oil and Gas
A Cuadrilla is the matador’s supporting cast. Before the bullfighter takes on his next victim, the bull is tormented and weakened by a gang (a “Cuadrilla”) of toreadors and picadors. Of course, the bull always loses, because it’s a spectacle not a sport. Cuadrilla is therefore an oddly antagonistic name for a UK company using […]
Bond Investors Agree With the Fed…For Now
The Federal Reserve has brought transparency to their decisions. The famous “blue dots” which show visually each FOMC voting member’s forecast for rates provides insight into their thinking, even if it doesn’t attach names to each dot. We’ve come a long way from Alan Greenspan’s Senate testimony, “Since becoming a central banker, I have learned […]