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Market. The percentage of IPOs for companies with negative earnings has increased and we are back to year 2000 levels. Unlike the 2008 incident that involved a housing problem with half a dozen states instigating a European banking crisis, this fund has a lot of middle eastern and their sovereign investments and so this could be more reaching than we expect. People are chasing these returns and being forced into riskier investments. He is more conservative for his clients. The more you go into the greed momentum, until that trend breaks it does not change and then there is significant change. At least MSFT-Q has a business.
DON'T BUY
Gold. It has put two or three percentage points on the index this year. He has a difficult time with the gold space. The rally leaves him cold. There have not been dividends in the sector and the companies have been terrible allocators of capital in the sector. They are expensive now. He is not about trading them. The investor is in it for the gold trade in most cases. Larger companies have done a better job.
BUY
They have a high yield and the market punished the stock. They only pay out 2/3'rds of their cash flow. He worries that they might cut the dividend a little at some point, but there is no reason for them to cut it at this point. There will be continued headline risk but they will climb higher over the next few months. You will see a geopolitical risk premium.
oil
gas
PAST TOP PICK
(A Top Pick Sep 26/18, Up 1%) It was up and back. It got completely misunderstood by the marketplace. They were forced by the market to cut the dividend because it was at 15% but they didn’t need to. They are investing in a utility at a great rate of return and you will see it start to seep into the company returns. You should see a dividend increase next year.
oil
gas
PAST TOP PICK
(A Top Pick Sep 26/18, Up 28%) He inherited it from Enercare. He started purchasing the shares in September. They have a unique group of assets. You can't replicate the assets on the infrastructure side. It is pretty rich but you can’t beat it. Buy it on weakness. We have seen a flock back to these infrastructure assets this year.
Energy Infrastructure, Industrials & Utilities
HOLD
A declining interest rate environment is good for them. The dividend will continue to grow. They have issues on line 3 and 5. If line 5 is shut down then we can't get oil to the US to go east and west. They are in the process of cleaning up their corporate structure from a balance sheet perspective. He thinks it will go higher and continue to thrive.
oil
gas pipelines
