Market Rises Slightly for 10 Weeks of Gains-

Extreme positions are not succeeded by moderate ones, but by contrary extreme positions. Friedrich Nietzsche

Unless you have crawled under a rock somewhere, if you are a citizen of the United States you recognize, shall we say, the lack of repor that exists between the two political parties in the country. Republicans, with President Donald Trump as the head, have unity issues between moderates and the Freedom Party, a right wing group which is irritated that Republicans have strayed from their principles, namely fiscal conservatism and minimal government spending. Democrats, whose party leaders are long time liberal Nancy Pelosi, the House Majority Leader, and Senate Minority Leader Charles Schumer, also have problems with unity. The progressive wing, led by Alexandria Ocasio-Cortez has embraced policies more in line with socialist tendencies, with the source emanating from the northeast, that being Vermont Senator Bernie Sanders and Massachusetts Senator Elizabeth Warren. One piece of that lurch left is the Green New Deal, a massive spending plan envisioning the nation moving off of fossil fuels in the next ten years in order to solve the largest problem the country faces, that being climate change. Estimates of the plan’s cost is around $100 trillion dollars, with a t. As you can imagine, Republicans ain’t exactly lining up to embrace this vision, which probably has exacerbated the already high tensions between both parties. In case we forget, Democrats are now investigating every piece of dirty underwear that Donald Trump has ever worn in the hopes of impeaching the soft spoken President. Given this environment, the Green New Deal should at least be examined, especially if one considers the investment ramifications.

Let me just also say I come at this from a biased perspective as most readers know, I have long had financial interests in the energy industry, specifically those related to every part of the oil and gas value chain. Downstream, midstream, upstream, back stream, front stream, side stream, you name it, yes, we either own it, want to own it, or are interested in it. Senator Ed Markey, the long time representative of Massachusetts, has been an avowed enemy of the energy industry for decades. He is working with AOC to help make the Green New Deal a reality. Let me share with you a bit of information that maybe Mr. Markey and AOC should consider. First, renewable energy made up 17% of all electricity generation in 2018 in the United States. The largest renewable sources were Hydro power (7%), and wind (6%). Fossil fuels, specifically natural gas (35%) and coal (27.4%), made up 63.5% of all generation and nuclear comprised 19%. Solar came in at a whopping 1.6%. I know, Solar has so much opportunity in front of it, especially with Elan Musk leading the charge. Elan is a bit busy shutting down his car dealerships for Tesla as on line sales will be the only alternative. Anyway, currently, and for the foreseeable future, fossil fuels are here to stay in electricity generation but also for transportation. You see, cars, trains, planes, boats, for the most part are fueled by oil and gas. In fact, in 2017, petroleum products accounted for 92% of all transportation sources. Now, the argument by the Democrats is climate change is why the country must make a big push to move away from fossil fuels as in ten years the planet will see increasing amounts of carbon dioxide (parts per million) if the world continues to use energy with carbon as the dominant source. In the meantime, there is plenty of scientific dispute about the temperature on earth and whether the earth is indeed warming. One final point is that the largest oil companies have already begun buying up the largest electric charging entities all over the globe. So, Ed and Alexandria, you might want to call the oil guys and see what can be worked out or what you can learn from them. Fat chance.

In the markets this week, Home Depot guided down as the housing market continues to try and digest rock bottom interest rates instead of rock, rock, rock bottom interest rates. L Brands showed continued weakness at Victoria Secret while the Gap decided to split up and take advantage of a red hot Old Navy chain. Hostess Brands beat estimates as Twinkies retains its appeal in whatever form you can find them (I think now they have ice cream). Wingstop showed chicken wings don’t go out of style, and it has proven that for many years now. Finally, rumors that the US and China are getting closer to a trade deal also helped the mood. In the meantime, Nietzsche nailed it with respect to how divided our country is, at least politically anyway.

Thank you for reading the blog this week, and if you have any questions about investing, please email me at [email protected].
Yale Bock, Y H & C Investments, its clients, and the family of Yale Bock have positions in the securities mentioned in the blog,  Investing in securities involves risk and the potential loss of ones principal.  Past performance is no guarantee of future results.  All investment decisions should be considered with respect to ones risk tolerance, return objectives, liquidity needs, tax considerations, and one's overall financial situation.  The fact that Yale Bock has earned the right to use the Chartered Financial Analyst in no way means or guarantee performance better than market indexes.