NetWorth Radio Advance Report - June 24, 2019

In this NetWorth Radio Advance Report, Spencer McGowan, President of McGowanGroup Asset Management, delivers financial news and intelligence with insights you can act on for June 24, 2019.

Advance Report

Radio Show

Dow Jones Industrial Average Index (Y.T.D. – Approx. 6 Months)

– Courtesy of Bloomberg

Gold, per Ounce, Spot Price & West Texas Intermediate Crude Oil Spot Price (5 Day Chart 06/14/2019 – 06/21/2019)

– Courtesy of Bloomberg

C.B.O.E. 10 Year Treasury Note Yield Index & iShares 20 Year Treasury Bond ETF (5 Day Chart 06/14/2019 – 06/21/2019)

– Courtesy of Bloomberg

C.B.O.E. 10 Year Treasury Note Yield Index & Short Term Interest Rate Index (15 Years)

– Courtesy of Bloomberg

Headline Round Up!

*IRAN’s Bad Behavior! Hit List Grows: 4 Tankers, Drone Attack on Western Oil Refinery Complex, and U.S. Drone Downing in International Air Space in Under One Month! 1000 Extra U.S. Troops!
*Trading Impact! Oil, Gold, U.S. Treasuries. Our Graphs Tell the Real Story.
*Double Impact on Treasury Buying: Iran plus What the Fed Said!
*Important Economic Projections! What do they mean for investors?
*Trump and Xi Meeting Plans Corresponded to Spikes in Dow this Week!
*Shūshu! Huawei Screams “Uncle” in Chinese!
*Central America Governments Stingy on Welfare. Bond Buyers Enthusiastic?
*Tech Salaries Up 15% in Austin.
*Cryptocurrency Mania Exploding Again! Facebook Launching Libra! Bitcoin Controversy.
*Farm Belt Nightmare in Midwest: Floods and Trade Wars.
*Hemp Growing Legal in Texas? Governor Abbott Getting Stuff Done: Beer and Wine Delivery, Hemp, CBD, and More.

Texas Black Gold Rush!

*Oil Spikes on Bad Behavior and Inventory Drawdown.
*LNG: Future Boom After Trump and Xi Hold Hands?
*Anadarko/Occidental Mega Merger Updates.
*Permian Boom Explodes Midland Schools?
*Exxon and Saudis OK $10 Billion Plant in TEXAS!
*Solar Updates and Tesla Flops Again.
*Congratulations Texas and USA! 2019 on Track to be the First Year Since the 1950’s that the USA is Energy Independent. Production on track to top consumption at just over 100 Quadrillion British Thermal Units!


Profit Report!

Trustee Boot Camp: Advantages of After Death Trusts.
Your Estate Plan and What Happens After You’re Gone?
Causes of Death in the News versus Reality.
Surviving Your First Bear Market in Retirement: Ronnie’s retirement reserves plan!


McGowanGroup 2019 Mid-Year Client Update

Our last client update was January and pardon me for leaving it up so long. I just wanted to remind you of what we were doing through last year’s mini panic. We bought high cash flow bargains with our excess cash flow.
Range Bound Equity Markets Rebound!
In early 2018, Alex and I covered on the program that equity appeared to enter an extended trading range instead of the raging bull of 2016 and 2017. That range appears to be about 27,000 on the Dow to the 22,000 set at last Christmas.
What’s the strategy?
Near the upper end of the range, we have harvest points established and, near the lower end, we have bargains picked out to redeploy cash in a potentially gain enhancing strategy.
Energy Infrastructure 2019, based upon EIA data, appears to be the year that the United States reaches overall energy independence including natural gas production. 7% is better than 2%. The dividends available in the pipelines and other Energy Infrastructure companies, in many cases provide near 7%. A very attractive proposition compared to the near 2% yield on 10 year U.S. Treasuries that leaves room for capital gains on top of the yield. Controlling value at risk of loss through a harvesting and redeployment strategy is our intention consistent with the past 18 months.
Safety and Income!
The 30 year U.S.Treasury yield has fallen from the highs last year to just over 2.5% at this writing. The world appears flat at 2% or less for higher quality global government bonds. The premise that risk free rate should be the rate of inflation or lower appears to be repeating the 2012 forecast for rates: “Lower for Longer.” Remember 2013? The Taper Tantrum rate spike reversed the Bond markets and reintroduced Duration Risk as the 30 year U.S. Treasury spiked to 4%.
For the Safety and Income allocations we are gradually removing premium priced Duration Risk and building dry gun powder at 2% or better in Money Markets or short term reserves.
High Cash Flow!
Global High Yield Bonds – 7% is better than 2%. Many portfolios run by established global bond managers with diversification are still trading at a discount to the estimated par value of the underlying bonds. Further, yields near or above 7% from interest are worth more by the measure of aggregate future cash flows versus the government bond alternatives underscoring appreciation potential with this week’s Federal Reserve discussion of potentially cutting cash rates.
With regard to the trade negotiations we offer a recent Wall Street Journal commentary:
“There’s a simple solution to the Huawei issue: It is welcome to do business in the U.S. as long as it forms a joint venture with an American company that will hold a 51% interest in the entity as well as unrestricted access to its technology.” – Michael Choquette, WSJ June 1st, 2019.

Research Round Up!

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*U.S. China Trade War: Understanding the New Long March!
*Energy Infrastructure Discounts!

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