NetWorth Radio Advance Report - November 5, 2018

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 November 5, 2018.

Advance Report

Radio Show

Powerful Interviews

The Federal Reserve has “reloaded” its cannon for the past 2 years. One would think that they hate it when assets appreciate including Stocks and Real Estate. To understand the perspective, if there is a systemic shock, the Federal Reserve can add accommodation to prevent a melt down. At 0% base overnight bank lending rate and near zero T-Bills, the Fed was out of ammunition.
As the economy accelerates and asset prices appreciate, the perfect opportunity to “reload,” by raising short rates without inducing panic, unfolds for the Fed. This amounts to psychological “money in the bank” for the Fed along with increasing profits for their real customers, the banks while discouraging a bubble that could pop uncontrollably like 1999 technology stocks.
Once the tightening begins to decrease asset prices, the academic debate turns to: how high is too much for the base rates? October was a clear demonstration that they have arrived:
Dow Jones Industrial Average Index (Approx. 2 Years)

-Courtesy of Bloomberg

Standard & Poor’s 500 Index and Standard & Poor’s 500 Equal Weighted Index (Approx. 2 Years)

-Courtesy of Bloomberg

iShares 20+ Year Treasury Bond E.T.F. (Approx. 2 Years)

-Courtesy of Bloomberg

CBOE 30 Year Treasury Bond Yield Index & CBOE Short-Term Interest Rate Index ( Approx. 2 Years)

-Courtesy of Bloomberg

The October lows took the Dow total return for the year to near zero after falling below 25,000. The irony is that the Dow and S&P indexes recently hit a high with gains of about 10% for the year, when the Dow topped just below 27,000. This amounts to a classic bull market head fake: suck your money in and spit it out!
Where do we go for 2019? We will cover the choices from safety to a well constructed balanced portfolio. This week’s program focuses on GOOD MATH for forward returns, BARGAINS, and, of course CASH FLOW strategies.

Alex’s Questions:

What should we do now?
Hey Spencer! What did you tell clients this week?

Spencer’s Questions:

Profit Diagnosis: Range Bound! Not a “Contagion?”
“Keep calm, carry on?”
World Interest Rate Probability for the United States Federal Funds Rate (11/8/2018 – 10/30/2019)

-Courtesy of Bloomberg

Alerian M.L.P. Index and U.S. Crude {West Texas Intermediate} Spot (Approx. 5 years – Dated 10/12/2018)

-Courtesy of Bloomberg

Our NetWorth Radio Texas Business Leadership series continues with Recurrent Investment Advisors Brad Olsen, a Houston based energy infrastructure expert with deep insights based upon institutional research.


Prior to co-founding Recurrent, Brad was most recently the lead MLP portfolio manager for BP Capital Fund Advisors (BPCFA). Under Brad’s leadership, MLP AUM more than doubled (excluding the impact of appreciation).
From 2011 to 2015, Brad led Midstream Research for Tudor, Pickering, Holt & Co. (TPH & Co.), where he was recognized as the top all-around stock picker in the US by the Financial Times in 2013, and the top energy stock picker in the US by Starmine in 2014. Under Olsen’s leadership, the TPH & Co. midstream team was recognized in the WSJ’s “Best on the Street” poll as well as by Institutional Investor Magazine.
Brad also has experience as an investment analyst at Eagle Global Advisors in Houston, where he was part of a 3-person team that grew midstream/MLP AUM from $300mm to over $1bn from 2008 through 2011. He has also worked in investment roles at Millennium International, a large global hedge fund, and Strome Investment Management, an energy-focused hedge fund based in Santa Monica, CA. He began his career in the UBS Investment Banking Global Energy Group in Houston.
  • Brad earned a BA in Philosophy, Political Science, and Slavic Studies from Rice University in Houston.
  • Brad resides in Houston with his wife and four children. Brad was nearly fluent in Russian, but is very rusty.

 

Headline Round Up!


*The October Spooking! No Place to Hide? What is Cheap?
*IBM Pays Over 10 Times Sales for Red Hat? Desperation for a Breakthrough?
*U.S. Treasury Issuing $1 Trillion More in 2018?
*More Jobs, Productivity, and Pay Raises!
*Your House Up Again, Just not as Much and Down for the Month?
*Fallen Angel: GE Cuts Dividend to 1 Cent Hitting New 10 Year Low.
*Oh Canada! Long Awaited Legalization Appears to Mark the TOP in Pot Stocks Followed by a Terse Spanking for Cannabis Traders?
*Oil and Gas Updates!
*2 Big Buyouts. M&A at a 4 Year High.
*LNG Shipping Rates for Shippers at Near Record, 3 Year Capacity Forecast Strong.
*Plano Based Denbury Resources Buys Houston Based Penn Virginia.
*Big Private Equity Carlyle Joins Oil Supertanker Race: EXPORT Terminal in Texas.
*Iran and North Korea Exports Busted with Satellite Technology.
*Millennial Trends: The Largest Generation. Yoga Pants Rule and Scooter Injuries Mount.

 

Profit Report!

*What is Spoofing?
*2019 Choices by Asset Class: Where do we want to be?
*Trustee Boot Camp.

 

Research Round Up!


Investors are invited to improve decision making with a comprehensive tour of global economics, indicators, and actual results.
*M.L.P.s: From Balance Sheet Recession to Balance Sheet Recovery.Recurrent - MLP Slides for McGowan - Oct 2018
*Is this a Bear Market? Our old friend Rod Smyth weighs in.The_Weekly_View_181029_Bear_Market_Unlikely_

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