Simon Lack Blog | Talkmarkets | Page 1
Managing Partner, SL Advisors, LLC
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Following 23 years with JPMorgan, in 2009 Simon Lack founded SL Advisors, LLC, an SEC Registered Investment Adviser. SL Advisors manages investments in energy infrastructure, including the Catalyst MLP & Infrastructure Fund (MLXIX), the American Energy Independence Fund (USAI), and ... more

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Earnings And Pending Legislation Good For Pipelines
The Inflation Reduction Act of 2022 now looks likely to pass. Private equity managers once again retained their indefensible carried interest tax treatment, the price Senator Kyrsten Sinema oddly insisted on to secure her vote.
Life Gets Complicated For The Fed
Making eurodollar futures interesting is not among Fed chair Jay Powell’s goals, but he’s achieved it nonetheless. From just after their June FOMC meeting through Thursday, the market has lopped over 0.50% off the projected rate cycle.
Why Natural Gas Affects Prices At The Pump
Gasoline prices have fallen recently, but is their relationship with crude oil changing?
Pipeline Earnings Should Be Good
Europe’s sharp pivot away from Russian energy is a permanent shift, with long term benefits for the US natural gas business. The drop in crude will provide some relief at the gas pump for households.
These Are The Good Old Days
It’s an odd recession when the economy adds 372K jobs and the unemployment rate stays at 3.6%. We seem to be talking ourselves into one.
Germany Pays Dearly For Failed Energy Policy
The epicenter of the energy crisis is Germany. The world’s third-biggest exporter, behind China and the US, reported a monthly trade deficit for the first time in over thirty years.
Liberal Energy Policies Remain Good For Investors
For now, it seems meeting demand growth for traditional energy will drive prices higher. There’s little sign of demand destruction at current levels, and China is still enduring partial lockdowns.
Market Volatility Is Becoming Normal
Every investor is aware that the market’s been volatile recently. The VIX is high but converting it into typical daily moves isn’t intuitive.
The Fed Can’t Afford Two Mistakes
The Fed can’t afford consecutive policy errors, so inflation is unlikely to return to its 2% target.
Texans Don’t Complain About Gas Prices
Mortgage yields have reached 6.5% and stocks have entered a bear market. The Fed’s projection materials show PCE inflation falling sharply next year to 2.6% and 2.2% by 2024.
Even After A 30% One Year Return, Pipelines Remain Cheap
The pipeline sector is historically cheap versus utilities, often a point of comparison.
Inflation Fears Moderate
It is a dovish Fed, regardless of their current hawkish tone. Getting monetary policy to neutral (estimated as between 2% and 3% based on Fed Chair Powell’s recent press conference) with inflation running at 8% is hardly slamming the brakes on.
Pipeline Sector Extends Outperformance
The continued rally in the energy sector is steadily lifting past performance ahead of the S&P500 over multiple timeframes. The American Energy Independence Index now has a higher annual return than the S&P500 over the past one, two and three years.
Pipelines Are Less Volatile Than You Think
North American midstream energy infrastructure is steadily making up for lost ground over many timeframes. It’s doing so with no more volatility than the market.
High-Energy Earnings Boost Pipelines
Earnings for pipeline companies are generally devoid of excitement unless steady growth gets you animated, such is the stability of most business models. But 1Q22 earnings were full of positive surprises.
Why The Fed’s Critics Will Become More Vocal
The ten year treasury yield touching 3% has drawn headlines, but the bigger story is that the increase in nominal yields has been driven by rising real yields.
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