Somehow, in the midst of all that is terrifying and sad in today’s stock market, ETP is a singular beacon of hope. I don’t understand how, but ETP is still making new highs.
They are a terminal company for energy products, so lower oil prices helps them. But if we were really on the precipice of something horrific, don’t you think demand concerns would hit them also?
Or perhaps ETP is just that needle in the proverbial haystack?
I am going to go out on a limb and say we are not about to experience another major meltdown of the magnitude of 2008/09. I believe the Federal Reserve is currently “all in”. They could not tolerate such a decline as it would undermine their entire authority as central bank. The Keynesian line simply cannot lose on such a big test of their expertise. It would be the end of them.
So in that respect, I believe financial markets would continue to have a permanent bid under them. If commodity prices are allowed to get too low, government tax receipts would fall and debt burdens would become untenable. It’s not enough to have a recovery; people have committed to a recovery where more dollars trade hands for goods and services, not fewer. It’s a completely arbitrary distinction, but important now nonetheless.
Besides, when I look through the operations of many of these energy names getting dismantled…they’re fine. I don’t see huge slowdowns materializing or cash problems or even demand problems. Unless this is still winding its way down from the manufacturing and consumer sectors and hasn’t appeared yet in the actual energy names?
It’s possible but I’m putting my chips on the table. I think this blows over. We will probably have a nasty correction, because of bad bets in market valuations. But by and large I think we just stumble through this and work our way back to new highs.
What has surprised me is that I can still find positions I want to buy. It’s not like I’m going out there and coming up empty handed. There are still plenty of good companies reasonably priced. You just need to filter the high flying tech and low yield financial product crap off your screen to find it.
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The key to outperforming in a bull run is avoiding the pull back. Your uncanny timing of selling off the vast majority of your energy holdings at highs is remarkable. You’re going to end up rebuying all your stuff at below original cost basis aren’t you?
Plus some…
Mr Thaler, I like NADL and will follow on. Do you like SLCA here? Great work sir!
I don’t know much about SLCA. I like HCLP here though, and if the two are similarly priced, then that follows by extension.