Whats Right Whats Wrong Whats Next What Happened

What’s Right, What’s Wrong, What’s Next?

What Happened?

Bears’ Bites Are Worse

Bulls Want More to Chew On

Bonds? • Treasuries Fell (Orange) Corporates Climbed (White)

What’s Wrong • • Global economies, global markets Trade costs for select industries Transportation & labor costs Peak earnings growth? 21% (2018) to 11% (2019) Interest rate fears Electoral threats End of consumer spending? End of business investing?

What’s Still Right • Consumers • Business • Industries – Petroleum – Utilities – Real Estate – Banks – Technology

Inflation? Not Here

Fed Not Going to Stomp • FOMC guides, not sets (current = 2. 17%) • Range guide 2. 00 -2. 25% (next meeting Nov. 8)

Economy Still Champ • GDP is 4. 2% (Next estimate Oct. 26)

Consumer Still Consuming • Retail trade (US Census) +6. 6%

Consumers Still Comfy

Business Still Investing • US private domestic investment (BEA)

Forward Capital Spending Indications

Portfolio Denizens Not Doomed • • The right Indexed Equities Utilities = reliable returns + growth Real estate is about location Petroleum—up-, mid- and downstream Technology still advancing missions Banks recovering, slowly but surely Consumer goods and services Bonds and preferreds

Looking For Signs • S&P 500 Index breakdown • Margin credit and free balances

Further Signs • Corporate credit – Corporate bonds – Collateralized loan obligations (CLOs) • Consumers & business conditions • Bearish or bullish

Want a Little Protection?

Hedging • • • Cash 12%, up from 8% Reduced index allocations Focus on dividends Focus on bonds Sustainable companies Avoid inverse ETF space

Best Bargain Buys • • Compass Diversified (CODI) Hercules Capital (HTGC) Viper Energy (VNOM) Enterprise Products (EPD) W. P. Carey (WPC) Next. Era Energy (NEE) Discounted municipals (BLE, NVG, NZF)

You Have Questions, I Have Answers