Global Growth Rates?
Best Performing Equity and Fixed Income Markets?
Interest Rates? Inflation?
US Household Net Worth vs Debts?
Federal Budget and Deficits?
Tax Reform Impact?
Implications for Investors?
Headline Round Up!
*Jobless Claims Lowest Since 1973.
*Repatriation of Corporate Cash Could Generate $250 Billion in Additional Tax Revenue for Washington.
*Buffet Labels New Appreciation Rule a “Nightmare” for Corporations.
*GE Planning a $7 Billion Write Off Next Week?
*Amazon Begins Hiring 2,500 Workers in Coppell: Saying Good Candidates Can Be “Hired on the Spot.”
*North Texas in Top 20 for New Amazon Second Headquarters.
*Shale Oil and Gas Production in U.S. Poised to Explode With Oil Stable Near $64.
*LNG Export Update.
*Kinder Morgan Pipeline Delayed Due to Permitting.
*Thirsty Assistant Steals $1 Million Worth of Wine!
*$450 Tiffany Ruler? Rich Chicks: $10,000 Bird’s Nest.
*Coffee Prices Up Over 700% in 12 Weeks in Venezuela. 440,000% Annualized Inflation! Printing Money Boosts Bond Prices?
J.P. Morgan Guide to the Markets 1st Qtr. 2018 – Consumer Finance pg. 19
J.P. Morgan Guide to the Markets 1st Qtr. 2018 – Federal Finances pg. 23
J.P. Morgan Guide to the Markets 1st Qtr. 2018 – Asset Class Returns pg. 60
J.P. Morgan Guide to the Markets 1st Qtr. 2018 – Fixed Income Sector Returns pg. 42
J.P. Morgan Guide to the Markets 1st Qtr. 2018 – Oil Markets pg. 29
Top 10 Macro Themes for 2018!
Why Are Big Banks Booking Losses? Surprising Explanations?
Bargains! Capital Call!
Often the most popular investment category is “too much in the sun(1).” The resulting overpricing and subsequent bear underpricing have often marked the greatest dangers and resulting opportunities in my 31 year career.
In 2009, we cheekily nicknamed one of our best research pieces as “20 Companies That We Believe Will Not Die.” The list included Whole Foods which subsequently rose from under $10 to an all time high near $60(2). So unpopular were stocks we found most investors fearful of adding positions at what was proven to be a great inflection point.
Harken back to 2014. Oil was over $100(3). Scores of research pieces touted the energy master limited partnerships, one of the most popular investment categories at that time(4). For several years now we have watched opportunities develop which appear to have come to the point of attractive inflection in the inflation friendly energy category. The 3 year bear market cycle in oil prices appears to have now ended based upon recent prices approaching $60 per barrel after a 2016 low near $27(5).
Our diligent research process has identified, what we believe to be, one of the best opportunities since early 2016, when the high yield credit markets froze producing large discounts with high income. The term “capital call” refers to our urging clients to make deposits into an attractive asset class.
For clients able to make deposits and for our cash reserves, we are completing allocations into attractive high dividend energy companies. Please call to discuss the opportunities for 2018 “and beyond.”
Spencer D. McGowan – December 2017
McGowanGroup Asset Management
1. Hamlet Act1,Scene 2
2. Bloomberg LP – July 2003/October 2013
3. Bloomberg LP – West Texas Intermediate Crude, February 2014
5. Bloomberg LP – West Texas Intermediate Crude, November 2017/January 2016