JotCast | 12/18/25 Capitalist Times Live Chat

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12/18/25 Capitalist Times Live Chat

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Elliott Gue

4:03

Welcome, always good to hear from a long-time reader. We do have quite a few different services:
Energy & Income Advisor -- This is our flagship energy-focused product where we cover everything energy from dividend-focused midstream to more growth-oriented recommendations.
Conrad's Utility Investor -- This is Roger's dividend focused essential services/utilities service.
Conrad's Utilities Investor PLU -- Roger's actively managed model portfolio focused on dividends/yields.
Free Market Speculator/Creating Wealth -- This is a service focused on economic/market commentary and a broad "go anywhere" portfolio of stocks and ETFs. We cover everything from commodity ETFs like SLV to individual stocks recommendations.
Smart Bonds -- This service focuses on high-yield low volatility bond, credit and preferred stock ETFs.
The REIT Sheet - Dedicated to selecting the best-positioned high yield Real Estate Investment Trusts.
CT Trader -- This is a trading service focused on swing trades in individual stocks and ETFs

Elliott Gue

4:03

Elliott's Options -- This is an options trading service. We'll paste in links to learn more about all these services in the transcript of the chat -- also you can call our customer service manager, Sherry, toll-free on 1-877-302-0749 -- we are offering some free trials and/or special discounts this Christmas/New Years on several of these products if you're interested in giving any a test-drive. 1-877-302-0749

Lawman

4:03

The shear price of most MLP's have languished this year. What are your projections for MLP's in 2026, and which MLP (or pipeline corporations) do you favor, and why?

Roger Conrad

4:03

Two things have held down MLP returns this year. First, midstream on the whole with few exceptions has weakened, as stocks have consolidated four years of gains and also lost ground in the face of a bearish oil narrative. Second, MLPs' valuation gap to C-Corps in midstream has widened to historic levels, with yields on companies of equivalent MLPs approaching twice C-Corp yields.

One of my forecasts in our "Six for 2026" feature article--in the issue of Energy and Income Advisor that posted to today--is that MLPs will start to close this valuation gap. Remember that 10 years ago it was C-Corps that traded at massive discounts--and Wall Street was pressuring C-Corps to go MLP. Sometimes it takes a while for the pendulum to swing back. But it always does. And the yield differences right now will cover any additional expense to an accountant filing a K-1 many times over.

Victor

4:05

Hi Elliott, Maybe I'm mistaken but I think that in a previous chat you mentioned that you guys were considering COP as a possible new member of the model portfolio. Is that still the case?

Elliott Gue

4:05

We once recommended COP but sold it from the model portfolio some time ago when it was trading at higher prices. Right now we prefer XOM and CVX in the majors. Longer-term I think COP is a good holding, we just see more upside elsewhere.

Lawman

4:10

Do you have any opinions on Flotek Industries (FTK)?

Roger Conrad

4:10

It's not one we're covering right now. The product line is interesting and gybes with long-term objectives of the oil and gas industry. They do have competition in all of these businesses and they're very dependent on a single related company at this time. The stock has also come a long way in a hurry since crashing earlier in the decade, earnings have been very erratic and dependent on order flow. And there are no dividends paid.

Bottom line--it's potentially one to keep an eye on. But we think BKR and SLB are better services company bets.

Victor

4:12

Merry Christmas and Happy New Year guys. On your last issue you were pretty bullish about oil in the next 6 to 18 months. Do you feel that the current low prices are hurting the Saudis and they will manipulate the markets as they always do?

Elliott Gue

4:12

Merry Christmas and Happy New Year to you as well! Definitely the Saudis don't want oil where it is over the long haul but they have the ability to weather low oil prices for a prolonged period. They might take steps to restrain exports should they see evidence of a major build in global inventories, but I think generally they're thinking about the long game. One of the biug catalysts I think will be the release of the OPEC Maximum Sustainable Capacity audits in the second half of 2026. This will underline the fact that OPEC spare capacity is far lower than most have thought. They pushed for the audit and I think that's why -- it will be a significant upside driver for oil prices in my view.

Lawman

4:17

Do y2ou expect AES to be acquired and, if so, when, by whom, and at what share price?

Roger Conrad

4:17

I don't have a seat on the board. But I think AES is most likely to stay independent. As you may know, there was rumored takeover interest this year from a private capital buyer. But they were trying to buy very cheap--the stock trades at just 6.3X the mid-point of 2025 earnings per share guidance, despite projected growth of 7-9% a year the next two years at least.

I think an offer of $20 per share right now would be too good for management to refuse. And I think it would still leave quite a bit of upside for the buyer to spin off the pieces. But I'm not expecting one. And I think as management proves it can keep growing after solar tax credits phase out, we'll see the stock move higher.

Another possible catalyst would be Congress restoring the tax credits--certainly possible in 2027 if the trends from 2025 elections hold. I think we need to be patient--we're getting a good dividend to be.

Lawman

4:26

Are you still bullish on gold? If so, what are your projections for the price of gold in 2026 and beyond? Same questions as to silver and platinum?

Roger Conrad

4:26

We've had a monster gain with Newmont Corp (NYSE: NEM) this year in CUI Plus/Dividends Premium. I've taken profits on a third of the initial position and am tempted to take another third off the table on a move over $100. The company's merger with Newcrest was clearly a stroke of genius. But they're mainly getting a ride on gold prices, which reflect elevated inflation expectations pure and simple. And I think those expectations are likely to deflate a little next year.

One reason is the primary impact of tariffs is to crimp investment, which I think is slowing the economy and inflation. And I think we're starting to see that confirmed in numbers, though thanks to the government shutdown those are behind. I think appointing a Fed Chairman Wall Street trusts to tackle inflation will further deflate inflation expectations next year.

I'm bullish on gold and Newmont longer-term. But the stock is up 171% year to date--I think we'll see a lower price in the not too distant future.

John P

4:31

The U.S. dollar seems to be losing value in todays world due to China and other countries bypassing the dollar trade. Should we invest more in physical gold, silver, miners and commodities as well as foreign stocks and bonds to compensate for this? Do you have any thoughts on what allocation would work? Thank you, John P.

Elliott Gue

4:31

The dollar index was sitting at elevated levels in early 2025 and it has come down though if you look at a long-term chart, the dollar index is still in the upper half of its long-term trading range (since the late 70s). So, I think there's more room for downside in the dollar this cycle though much like prior bear cycles for the $ there will be counter-trend rallies long the way.

I don't think this is about the dollar losing its reserve currency status -- there really is no credible alternative in terms of fiat currencies.

In my view, the downside in the dollar is part of what I like to call the "Great Cycle." Basically, there are prolonged periods, usually of 10+ years, where dollar-denominated assets like stocks dominate everything and the dollar is usually strong in these periods. Then, there are prolonged periods where the dollar is weak and commodities, foreign stocks outperform. the 90s were an example of a strong dollar/strong US assets period and the 00's were the opposite (weak dollar strong

Elliott Gue

4:31

commodities, EM stocks). Right now, I think we're transitioning from a strong dollar/weak commodities, low inflation, US asset hegemony period to a weaker dollar/stronger commodities/international outperformance cycle. This year in several of our services we've allocated more to commodities like gold and silver. In Creating Wealth/Free Market Speculator we've been long GLD/SLV and well as Wheaton Precious Metals (WPM) though, as I outlined earlier we booked some gains in precious metals on this big rally. Some of the best performers in that portfolio are also foreign stocks -- European Banks, UK-based Lloyd's Banking Group and even Mexican cement company Cemex are examples. While we may recommend booking gains on some of these stocks from time to time, I fully expect to be finding more and more opportunities outside the US in that service over the next few years with those assets benefiting from a weaker dollar and the turn of the Great Cycle. I also think a really overlooked area is something we've covered

In our Smart Bonds service. Basically, these are global bond exchange-traded funds (ETFs) tracking everything from government bonds issued by emerging markets to investment grade and high yield bonds issued in currencies other than the US dollar. Thanks to the proliferation of ETFs traded right here in the US, individual investors can access these international bond markets quickly and inexpensively this cycle. I like the fact we’re getting non-dollar exposure, high yield usually paid via monthly distributions and capital gains as rates come down outside the US. Of course, we also think that energy will be a huge beneficiary of this turn in the Great Cycle as well – in commodity bull cycles you often see one category lead for a while and then leadership passes to a different commodity.

2025 has been the year of the precious metals but we think energy is due it’s time in the Sun – this is a major subject of our most recent issue of Energy & Income Advisor.

Lawman

4:32

What are your projections on the short, medium, and long term price of copper? Same questions as to uranium?

Roger Conrad

4:32

Long-term very bullish copper--BHP Group is a great way to play it now that the company is putting the Samarco dam lawsuit behind is and ramping up production. The Escondido mine is now performing and the Resolution mine in Arizona looks very promising with Trump Administration support. Copper is needed in everything to do with electricity and we're looking at an 80% global increase in demand according to ExxonMobil's projections--which are about as good as you'll find. Short and intermediate term are harder to forecast because Chinese imports often set the price. But any selloff is an opportunity to buy as the long-term upside is immense.

Uranium prices are sitting on a healthy dose of hype right now--we took a huge profit in leading non-Russian miner Cameco earlier this year for that reason. In reality, it takes a long time to build new nuclear capacity, so demand moves very slowly. It's resilient as plants stay operating for a long time once open. But the ongoing SMR stock crash warns profits can vanish.

4:36

Hi Elliott, will there be more new buy recommendations in the CW/FMS newsletter before the end of the year? Based on the last few issues, I was expecting to put more money to work, especially since we pulled back this week.

Elliott Gue

4:36

We did put more money to work last week in a regional bank. I have some more names on my radar screen as potential adds though year-end -- I am just not sure if I will add them this year or wait until we get a resurgence of trading volumes early in the New Year. The market has been a bit of a mess lately, which I suspect is related to year-end positioning rather than a profound change in fundamentals.

Lawman

4:38

BEP is trading much lower today than five years ago. Why do you think that is? Do you see any catalysts on the horizon for BEP?

Roger Conrad

4:38

Green energy stocks--including many without earnings--were huge winners during the first Trump Administration. Then during the Biden Administration, sector growing pains burst the bubble, with the result they were among the worst performers for four years. And as if on cue, the survivors of the bust have been among the market's top performers this year.

BEP and to a less extent BEPC have tracked that trajectory, despite consistently increasing earnings and dividends over that time. BEPC has outperformed BEP by a sizable margins, as investors have preferred to own the C-Corp to the tax advantaged partnership shares.

Upside catalysts for 2026 include- (1) proving to the public the company can grow with phased out solar and wind tax credits, (2) improved sentiment on renewables (3) new business for 51% owned Westinghouse--the leading US nuclear company, (4) lower long-term interest rates.

Roy

4:38

Hi Roger and Elliot,

Roger Conrad

4:38

Hi Roy. Happy Holidays!

Jack A.

4:41

Hi Elliott: What would be your 3 best energy picks for total return over the next 12 months, considering current prices? Thanks Jack (Almeleh)

Elliott Gue

4:41

Always tough to narrow down to just 3. I always like a major -- my favorite is XOM -- at this stage of the cycle. They're more resilient when we get downside volatility, offer something of a yield and I believe they're really well positioned to benefit from the next cycle given the assets they've assembled at attractive prices over the past few years. On the gas side, I think the recent weather-related selling pressure offers opportunity in EXE here. I also still like the refiners as they will benefit from ongoing tightness in refining capacity -- my top name there is VLO.

Lawman

4:42

What are your expectations for Pembina Pipeline? Do you favor Pembina over US based pipeline companies?

Roger Conrad

4:42

I favor Pembina in addition to US based pipeline companies. It's appealing because (1) it's priced in and pays dividends in Canadian dollars--which is now rising against the USD and is still very cheap, (2) it has a very long history of executing asset expansion on time and budget, (3) its take-or-pay capacity contracts ensure stable growing income and dividends and (4) it's ideally placed for business expansion from Canada's growing export boom--from an LNG export facility to extensive natural gas infrastructure to the premier oil sands pipeline gathering systems. It also has a safe high yield of 5.5%.

Roger Conrad

4:47

A bit more on Pembina--they issued 2026 EBITDA guidance with a 4% boost in "fee generated" income. It also announced a 12-year deal with natural gas producer Ovintiv--another EIA recommendation--to supply one-third of capacity at its Cedar LNG export facility in BC, set to enter service in 2028. And it approved another CAD200 mil expansion of its Peace Pipeline system in Alberta. This company works and the stock is quite cheap.

Roy

4:53

Hi Roger and Elliot, Thanks for your good advice this year. What are your thoughts on AR and VNOM?

Roger Conrad

4:53

Antero is on the move--This month, they announced a $3.9 bil of upstream and midstream assets from HG Energy in the Marcellus Shale. The deal is expected to be immediately accretive to both the producer AR and midstream company AM. And it will be partially funded by the $1.2 bil sale of upstream and midstream assets in the Utica shale. AM and AR sink or swim together. I think both are likely takeover targets eventually. We do track AM in our MLPs and Midstream coverage universe as a buy at 18 or lower.

VNOM is also tracked in MLPs and Midstream. it's tied to Diamondback (FANG) and the dividend is going to track realized selling prices for oil and gas, as well as FANG's output. We rate it a buy up to 40.

Lawman

5:00

Why do you think Vermillion has performed so poorly? What catalysts do you see on the horizon for Vermillion, and is it a buy, sell, or hold at this price?

Roger Conrad

5:00

Vermilion has been suffering from lower commodity prices this year, as have other producers of oil and gas. And there's also been a reaction fo the asset reshuffling, which has included the sale of assets in the US and Saskatchewan assets to fund previous acquisitions and "accelerate debt repayment."

Business results have been encouraging, including a reduction in 2025 cost guidance and a 4% dividend increase for 2026 announced in early November. The 5.75 dividend yield is well covered allowing room for debt reduction and stock buybacks in Q3. I think completing the strategic plan/asset rebalance and higher energy prices are legit potential upside catalysts in 2026. We track the stock in the Canada and Australia coverage universe and rate it a buy at 10 or less for more aggressive investors.

Susan P

5:07

Glancing thru the EIA released earlier today, I applaud and appreciate the way you succinctly recapped each of the portfolio's positions. And, thanks for the brave forecast specifics heading into 2026. Under the Midstream forecast section, EPD was mentioned: I am wondering if either of you have a preference for EPD over ET going forward. Or do you think its a coin toss as to which one might be best the second half of the decade? Thanks much,

Roger Conrad

5:07

Thanks Susan. I'm glad you found that useful. I think Enterprise probably carries slightly less risk and Energy Transfer has slightly more upside--which is reflected in the fact ET trades at a discount to EPD currently.

I think the whole midstream sector has labored under investor misperception of how vulnerable it might be to a dip in energy prices--with an unwritten narrative that we're setting up for a repeat of 2025-16. I think there multiple reasons why this won't be the case--starting with people being too bearish on oil but also that this industry is greatly consolidated and managed far more conservatively than 10 years ago with much less debt. It looks like these companies are going to have to keep proving resilience before buyers push them higher again. But it's also interesting how bearish people are on midstream and its "underperformance" when on the whole our picks have kept making money this year. ET is underwater. But it's hardly a disaster with a total return of -11%.

Roger Conrad

5:07

And ET is coming off several very big years.

Lawman

5:13

The share price of Nextera has done nothing for five years. Is this stock worth owning?

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