Q: I appreciate your long-term KMI investment thesis, but I can’t get my head around the how sustainable targeted dividends are as hedges roll off over the coming years.
J: Most of KMI’s cash flow (90%ish I believe) is tied to long-term contracts for transportation services – pipelines and terminals – and is not at all sensitive to commodity prices. I agree that commodity-sensitive companies will be in trouble when hedges start rolling off. KMI, though, isn’t one of these.
Q: Do you really think Carl was trying to help the little guy? More probable he had already made some bets and was trying to use his influence to try to push the markets in his direction. I see no other reason he would have made this effort.
J: Are those mutually exclusive?
Q: Jesse, I have taken your suggestions on Gold (which I believed in as well) and took significant positions on both GDX (Up 12.5% currently) and NEM (Up 16% currently) . Also took a position in KMI (Up 7.5% currently)…..do you have internal targets for these positions that you would be willing to share? How much room do you think Gold has to run? Would you consider NUGT for a Gold trade?
J: I don’t have targets for them. They are long-term investments for me. I expect gold and miners to be much higher than they are today over the next couple of years but I can’t say exactly. I have day-traded NUGT some over the past few weeks (I’ve had an incredibly successful contrary indicator on twitter. See: https://twitter.com/search?q=%40jessefelder%20from%3A%40rock_rogers&src=typd). EVERY SINGLE TIME this guy has trolled me it’s been a great buy signal 😉 Outside of very short-term trades, though, I’d leave it alone.
Q: Great call on Miners! They are rocking! Keep up the good work. Just wanted to know your prospective if its a good time to scale up on Miners now (considering they already had a very good run in the last week or so) or wait for the Miners to pull back a bit before scaling.
J: They are a bit overbought right now but they could stay that way due to the massive short position out there. I’m fully invested in them and don’t plan on changing that anytime soon.
Q: Can you include in the weekend summary thoughts on oil prices – are they close to bottoming per Jim Rogers or would you wait longer to buy? Are you only interested in MLPs or are there any E&P or oil service companies you would consider?
J: I’ve written a little bit about oil over the past few months. I really don’t have a great feel for it. Fundamentally, I don’t see how it really could go much higher. I certainly don’t think it’s going back to the highs. My guess is that it just flatlines for quite a while – trading range 40-60? This would bad new for many of the E&P companies. I expect to see many go belly up. Until that happens I really have no interest there. Now, if I start to see any insider buying in the sector at all I might reconsider.
Q: Jesse, You obviously like Fibonacci but can you elaborate a little more how you use it and maybe illustrate with the miners. Do you use it for projecting where some of our miners may project to on the upside. I was looking at ngd and not sure if I am using it right but showed 3.20 as about a 38% retracement from the bottom and 3.50 as a 50% and 3.8 for 62%. If it doesn’t break through the 38% do you then look for a pullback because we hit resistance? Final question would be is this tool something to look for when and if we have our parabolic move in miners or gold and what would you look for? thanks.
J: I use Fibonacci stuff mainly for swing trading not for projections. In fact, I don’t normally do any sort of technical projections at all, especially for long-term investments which are what I consider the mining stocks in my portfolio right now.
Q: Can you tell me what percentage of your trading portfolio is invested in your positions ?
J: I get asked this a lot and have decided not to disclose it because I don’t think it’s appropriate for anyone to merely copy that portfolio. Deciding how to implement the ideas is up to each individual based on their unique goals and risk tolerance.