Beginner Investors’ Guide to Good, Prudent, and Appropriate Investing


Over the last 30-years or so, many people have asked me for advice on how best to manage one’s money and portfolio. While this is a customized process, many common themes are present that people have found very useful and have used to great effect in enhancing their portfolio. Having said this, not every thing in this post will be or is for everyone, and each person should consult a trust-worthy and knowledgeable financial advisor for individual attention and needs — this is THE challenge in investing and managing one’s money, because there are so few that are really trust-worthy and knowledgeable. Just know that there are extremely few financial advisors/consultants that I would trust, let alone rely on, if any.

Regardless, here are some principals that, on a broad basis, should help many realize a better financial future. Much of the following advice should be taken with a grain of salt as, again, it is not for everyone, and individual attention is highly advised. However, I will try to synthesize that which is relevant based on age group and risk profile for those that are in search of honest, unbiased, and thoughtful investment advice. But, first some definitions.

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Strong economic activity should drive commodity stocks well into 2019

Warmer than normal summer has led to robust natural gas prices: … we believe that natural gas prices will be… the forward curve would suggest.

· We look for 2018 exit prices in the … and average 2019 price in the range of about …: Assuming …, we’d expect natural gas prices to … by November then move towards the … level by December 2018. We would expect natural gas prices to drift towards the … range by mid-year and break back towards … levels by yearend 2019, averaging about … for the entire year.

· We expect economic growth to … 2H2018: …; we expect … to … at least 2019, if not into YE2020.

· Therefore, we expect 2H2018 and 1H2010 power gross profit … than expectations: … .

· Similarly, we’d expect natural gas infrastructure businesses to … for 2H2018 through 1H2019: … .

· Utility performance is also likely to … economy: … .

· Threat or danger to our thesis is pending …: … .

· We believe LNG is likely … economy and weather: … .

· However, with … economic activity, we’d expect interest rates to …: … .

· Therefore, we believe … underperform …:

Conclusion is reserved for our paid subscribers only.

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LNG 2Q2018 Earnings (8/9/2018): LNG is fungible so China trade war’s irrelevant; Cheniere ready to rise

Quarterly results are …, while … shadow; good news is that … .
China trade war is obviously and absolutely irrelevant
We continue to fully expect … scale
2018 looks to set up as … future free cash flow.
As expect … quicker than past …, but in-line with our expectations
Performance and … make Cheniere … .

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BKH 2Q2018 Earnings (8/7/2018): Guidance seems conservative; regulatory filings continue

… strong … performance driven by …, our thesis …
Regardless, given disappointing …, lower …, expected …, and slower … 2019, we believe that BKH is likely to …, particularly as it tries to … jurisdictions, compounded by the issue of … environment
However, given … we … ST-Target to $XX/share
BKH maintains its lowered 2018 AEPS guidance at $3.30-$3.50
We continue to look for BKH …, but also …, in general, … projects in the ST-to-MT.
Also, work on … . Regulatory … reasons that … shareholder value
We like that BKH is looking to … within each of … .

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AES 2Q2018 Earnings (8/7/2018): Clean, lean, mean and going green! Clear visibility to upside! Finally!

We now know where AES is going: AES wants to be a global … company through … and …
However, closet mission is to be big player in … , in our opinion. We like this new development and makes sense for AES in light of LT global energy picture.
Given so many countries still use … to generate power, … makes strong sense on many levels, particularly in … – reentry into China?
AES trusts its … and … projects may boost MT-to-LT growth
Troubled … is back on schedule and marching towards completion in … .
Achieving … may be a good strategy. … won’t change bankruptcy-remote subsidiary structure.
We … feel AEPS guidance through 2021 is … : We feel it’s … , particularly given … and … on base of some … , over XX% increase; should boost … .
… our NIV/share … $XX and ST-Target/share … $XX.

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SRE 2Q2018 Earnings (8/7/2018): Execution is back on menu but activist investor interference continues

With Oncor closed, execution is back in focus, but activist investors’ (AI) persistence continues
We look for increased TX/Gulf-Coast …, but not …
2018E AEPS guidance same at $5.30-$5.80/share
2019 GRC filed 10/2017 w/FD expected late-2018/early-2019
We look for SRE to … guidance in ST, MT and LT
Within next 12-months … Cameron … ; ECA … also … . We feel global LNG supply/demand has tipped … , especially in … .
SRE looking at potential … and to repatriate some … .
iEnova continues to add projects; it has $Bs in potential opportunities
Wildfire legislation potential … according to SRE
ST-Target remains $XXX/share, but NIV/share … to some $XXX/share from $XXX/share

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CNP 2Q2018 Earnings (8/3/2018): Vectren deal continues to be the focus; no action on ENBL, strange

Nothing matters much … . We still … for MT-to-LT shareholder value.
CNP still doesn’t want to use ENBL to fund VCC deal, which is … and … .
Keeping $1.50-$1.60 AEPS guidance for 2018E, which we feel is …
CNP’s almost $8B capital spending program forecasts 8.3% CAGR in rate base from 2017-to-2022, but earnings guidance for 2019-2020 is only 5%-7% CAGR. We believe … .
With VVC deal we believe that CNP has made itself into … for all the right reasons, in our view
Keeping our ST-Target of $XX/share

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EXC 2Q2018 Earnings (8/2/2018): Strong quarter; expect upward guidance revision and strong finish

We feel EXC is well positioned to benefit from …, which would boost …, lifting margins through both …
CAGR in utility AEPS expected at 6%-8% and rate base growth at some 7.4% thru 2021
We continue to believe EXC’s endgame is to … . Key to this strategy is to ensure …, which … far in advance
We believe that EXC’s next … would continue in the …
EXC reported $0.71 in AEPS vs. our $0.63 and $0.61 consensus
… is …, but could be better with … . And, pure-play IPPs are …

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DUK 2Q2018 Earnings (8/2/2018): Weak quarter doesn’t translate; good, steady growth story intact

Reported 2Q18 AEPS of $0.93 vs. our $1.05 and consensus’ $1.01. … disappointing, we … broader thesis for DUK.
Keeping 2018 AEPS guidance of $4.55-$4.85, in-line with our expectations
Macro-economic indicators are …; we look for these trends to …
We believe DUK is … through 2022 thru development of both …
Maintaining our $XX/share ST-Target. Tweaked estimates … results and project updates.

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NRG 2Q2018 Earnings (8/2/2018): Blowout quarter, but we’re still waiting for $1B share buyback to end

2Q18 AEPS was $0.84 vs. our $0.29 and $0.78 consensus. EBITDA was $819MM vs. our estimate of $445MM.
Upside from higher gross margin, largely due to …, partially offset by …
Half … and balance awaiting asset sales …. NRG expects to complete …, but likely more to come.
Fundamentals aside, we would wait until …
Otherwise, NRG’s strategy, financial planning (… share buyback), debt pay-down and business profile are …
… ST-Target/share at $XX, but when … NRG is likely to …

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