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May 2026 Capitalist Times Live Chat

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Roger Conrad

3:02

Hi Aaron. Glad you're happy with the advisories.

As you know, I do hold a position in Newmont Corp (NYSE: NEM) in CUI Plus. It was a little larger, before I pared it back slightly in the 120s. But it's been a nice counter-cycle position in this dividend stock portfolio. And I intend to keep it, especially with all the free cash flow it can generate with gold over $3K an ounce, or really anything over $1,500. And if it comes back a bit more, I will probably top off the position again.

My personal view is that income investors are best off buying a gold stock like NEM--that offers a cash yield and especially leverage to gold prices that appear unlikely to come meaningfully lower anytime soon. Right now it's around 5% of the portfolio. So that would be about where I'd put gold exposure.

BKNC

3:11

Hi Roger, quick question about TU. It does not seem to be doing anything, and I was thinking about moving some of it over to T and/or ZV. I was just curious as to your thoughts. If it is dead money, I would rather try to get a little appreciation (but it does have a high dividend). I believe you said earlier TU had no reason to have nay upside for a while.

Roger Conrad

3:11

Telus Corp did not report Q1 results in time to make the May CUI. But when they did report about a week later, I thought the numbers were probably a little better than management had been guiding to, especially for customer acquisition, And I was pleased when management largely affirmed guidance, including for free cash flow generation and debt reduction.

Results for Canada's Big 4 of Telus, BCE, Rogers and Quebecor did demonstrate how four or more national competitors in communications networks tends to undermine sector margins and investment. And the contrast is stark compared to the very solid results of what's now a US Big 3--AT&T, T-Mobile and Verizon.

I think investors are too fixated on what SpaceX may do in the US market--I think not much--and as a result T, VZ and even TMUS are still cheap stocks even as their underlying businesses are on a roll. And I continue to recommend all three.

The Canadians like Telus are even cheaper on a valuation basis. The 4 competitors market will weigh on them.

Roger Conrad

3:12

But I'm not giving the advice to swap out of the Canadians into the US stocks at this time.

Doug W.

3:21

Gents, could you provide a high level perspective of what segments within the utilities and energy sectors should perform best over the rest of 2026?

Roger Conrad

3:21

HI Doug. In the utilities space, I've mainly focused on what I've considered to be "loaded laggards"--companies that for whatever reason have lagged sector performance the past few years but have upside catalysts to close the gap. Dominion Energy would be one example and I think it has a lot more to run. We've also gotten a nice return from Edison International (NYSE: EIX), as the utility has continued to resolve its wildfire concerns. Renewable energy stocks have been another focal point. And we've seen several big year to date winners like HA Sustainable (NYSE: HASI).

I think these are both very good themes in the utility and electricity sector. I am still very wary of nuclear power hype, despite being a big long-term believer. There's a lot of money including taxpayer dollars being shoveled at companies like NuScale and Oklo, despite not a dollar of real earnings. And I suspect we're going to see a number of Solyndras.

Roger Conrad

3:22

Brookfield Renewable owns 51% of Westinghouse--which is effectively the US nuclear national champion. If you want to bet nuclear, that would be my pick--and it's still a relatively cheap stock as well.

Guest

3:28

Hi Roger: Some time ago I believe you referenced the possibility that PAA could be acquired by another midstream. Could you please expand on that possibility and let us know timing, if any, and likelihood of such event happening? Would the acquiring party be another MLP or C Corp? Thaks. Barry

Roger Conrad

3:28

Hi Barry. I think a takeover of Plains is still a real possibility. And any play for PAA would have to start with PAGP. Market cap for all of Plains is just $16 bil even after the stock's recent run-up--compared to $121 bil for Enbridge Inc as the biggest liquids pipelines player in North America. Plains has also made itself more attractive by dramatically cutting debt and focusing operations on the most prolific basins. And its customer list is a who's who of energy.

Scale is a huge benefit in the midstream business and consolidation has been picking up steam the past few years. This would be one of the bigger deals. But there are multiple potential buyers.

A C-Corp suitor would mean some tax complications. So another MLP like Energy Transfer would probably be preferable on that score. But on the other hand, a high enough offer--such as OKE bid for Magellan a couple years ago--would take away that sting and then some. Still recommending PAGP at 26.50 or lower--as we have for many years.

3:30

Hi Elliott, can you share with us your thoughts on the consequences of how Kevin Warsh plans to run the fed? I have watched a number of videos analyzing his plans and how the bond market has started to position itself in anticipation of his actions.

Elliott Gue

3:30

A few things he's said is that he wants to shrink the Fed's balance sheet, he favors a switch to the trimmed mean PCE to measure inflation, and he's talked about the potential deflationary AI trend. Shrinking the balance sheet immediately would be a big problem for stocks; I think this is more of a longer-term goal for him though, not something to worry about near term. The key has been/and will be to watch the level of Bank Reserves reported by the Fed every Thursday evening. As far as the key inflation metric, I doubt that's something he'll put in place immediately either. But trimmed mean PCE is actually a metric I've been watching for years (Dallas Fed publishes it). Basically the idea is that month-to-month swings in core PCE can be driven by a handful of outlier readings in certain parts of the economy. By using the trimmed mean, we filter out the biggest gainers and the biggest losers each month to give us a better idea of the path of inflation. Right now, trimmed mean PCE inflation is lower than core

Elliott Gue

3:30

PCE, though that hasn't been the case all of the time over the last 5 years or so. The Fed's preferred inflation metric also has no bearing on things like the inflation Index that underpins TIPs. I do have some sympathy for the view that Core PCE is deeply flawed though. The Fed has extreme control over certain parts of the economy (like housing) but very little or no influence over other sectors of the economy like energy prices or healthcare pricing. His comments around AI remind me of Greenspan's comments around technology and the Internet back in the 90s -- if AI boosts efficiency and labor productivity as the Internet did (a reasonable view) then that will tend to push down inflation over time. I really don't think Warsh is the main driver of the Treasury bond market though right now. I think what's more interesting is the action I discussed in my Sunday Deep Dive a couple of weeks ago

https://open.substack.com/pub/freemarketspeculator/p/beijing-disappoin...
Basically, we saw the 30-Year Treasury yield tough 5.20% intraday and it also closed at the highest levels since 2007 on May 19th. But, while yields were breaking out (bonds breaking down), what’s fascinating is that there was a record-setting speculator bond short position in place in Treasury Long Bond and Ultra futures. As I explained in that video, when speculators are so lopsided short bonds (betting on higher rates) and yields marginally break higher that’s a recipe for a failed breakout and sharp reversal lower.

3:31

And that’s exactly what we’ve seen -- 30-year yields have reversed below 5% again today. I think we could see further sharp moves lower in yields (higher in prices) as we get an added boost from Treasury short-covering.

Guest

3:34

Hello Roger, You have indicated that KMI other C Corp pipeline have become somewhat overpriced vs the MLPs. Does that also hold for PAGP?

Roger Conrad

3:34

Thanks for that question. I don't think so. Plains GP Holdings' only asset is shares of Plains All America Pipeline (NYSE: PAA). Lately, it's traded at a premium of around 5-7% to PAA. But PAA remains discounted yielding 7.7% and so arguably is PAGP yielding over 7%.

Just to be clear, if there is a major selloff in midstream C-Corps in response to "deescalation" investment themes in the Middle East, prices of MLPs would likely drop a little as well. What I'm saying is they'll hold value far better because (1) they're not heavily owned by institutions and (2) they're heavily discounted to the C-Corps that are dominated by institutions. They also yield more. And over time, the valuation discount of MLPs to C-Corps should narrow--just as the discount of C-Corps to MLPs did in the previous decade.

Guest

3:42

Hi Roger: Couple of questions on MLP's: 1. Is there any merit to increasing NOW MPLX's buy limit from $55/share? 2. If MPLX is intending to raise their dividend from $4.31/share to $4.83/share next year, would that justify increasing the buy limit NOW? 3. How is someone like MPLX able to increase their dividends more than 10+% last year with projections to increase 12.5% per year for the next 2 years and others like ET and EPD do it substantially less? Any clarification would be greatly appreciated especially for those of us who live off of these dividends. Thanks for all you do for so many of us subscribers/readers!!! Barry

Roger Conrad

3:42

Thanks Barry. Your comments are much appreciated.

I don't think we really get anywhere chasing stocks after they've gone up a lot--and that would include raising buy-in prices even for high quality energy midstream MLPs like MPLX (NYSE: MPLX). You could make a great case that MPLX is still heavily discounted yielding 8.5% and with big dividend growth plans. But a good bit of that discount/higher yield is due to the fact Marathon Petroleum (NYSE: MPC) is the controlling shareholder--at one time investors were worried it would take MPLX under.

I like the company and agree with you on its strengths. And the dividend growth is at least for now aligned with Marathon's desire to get cash. But if/when deescalation become the dominant theme in the energy sector, we're likely to see a price for MPLX below 55 in short order. And unlike MPLX, ET and EPD have no uber owner whose interests may diverge from other shareholders at some point. I like owning all three.

Denisimo

3:45

E & R:

With all that's gone on in the world, you guys are hot on Baker Hughes (NYSE: BKR) and SLB (NYSE: SLB).

How high do you think they could go ?

Always appreciate your insight and wise thoughts.

Denisimo

Elliott Gue

3:45

Yes, we definitely like both names and believe they'll both benefit from billions of contracts to repair damage to Middle Eastern facilities and oil/gas fields over the next few years. Even without that, SLB's ChampionX unit looks like a brilliant acquisition for them given the exposure to production recovery and mature field redevelopment. BKR has direct exposure to growth in global LNG exports, which I think will remain a powerful tailwind for years to come as countries look to diversify their supply. Longer-term, we think BKR can move significantly higher as it's only really approaching the highest of the last big upcycle right now. Generally, during supercycles, highe -quality names like BKR will make significant new highs above prior cycle peaks. Short term, BKR has had quite a run and is over our buy price. SLB traded over $110 at the highs of the last cycle and over $60 as recently as 2023. And, we believe it's a higher quality company today than it was at the peak of the last cycle. I see no reason

Elliott Gue

3:45

to believe that SLB won't trade well over $100 before this cycle is over.

3:48

BEP is approacing a 5 year high with the run up in the past week. Comments on this stock. How high would it go before you might recommend taking profits?

Roger Conrad

3:48

First, I think Brookfield is a far more valuable company than it was five years ago, when the renewable energy investment boom began to go bust. It's now able to bring 10 GW of new generation on line globally every year. Quarterly results are no at the mercy of water and wind conditions in North America. It owns 51% of Westinghouse. And the dividend is about 30% higher as well.

I think the stock should go quite a bit higher and I'd be comfortable holding either BEP or BEPC in the 50s--though my highest buy in price remains 40.

That said, I do recommend profit taking for every stock I cover when certain prices are reached. And for Brookfield BEP or BEPC, that would be 60.

Guest

3:53

Hello Elliot, Could you touch upon the rationale for holding on to 50% of VLO?

Elliott Gue

3:53

VLO is the highest-quality pure play refiner in the US with some of the best assets (complex refineries) on the US Gulf Coast. The world was already short of refining capacity before the Iranian conflict and now, with key Middle Eastern refined products exporters offline crack spreads have spiked. Even after the war is over and the Strait of Hormuz reopens, it'll take time to repair damaged facilities and resume exports. And even with exports back to normal, this conflict underlines the importance of energy security and the reliability of supply. In the end, I think you're going to see more exports out of the US serving markets like Europe which has (sadly) become so import dependent in recent years. Bottom line: We see elevated crack spreads over the next few years and if VLO were to trade back to similar valuations we saw back in the last supercycle it's not hard to derive a valuation target of $350+. The stock ran up a little too far too fast, so we thought it prudent to take some profits off the table.

Elliott Gue

3:53

But we still think there's significant upside over the intermediate to long-term and we wish to maintain some portfolio exposure to refiners.

Hans

3:55

Elliott, What is happening to CRK, the stock (with the high oil prices now) is almost 40% down from last year.

Elliott Gue

3:55

CRK is a Haynesville focused gas producer and for the stock to really work, we need calendar gas strips in the $4.00/MMBtu region. We're significantly below that right now. CRK will always underperform when gas prices are low (relative to a low-cost producer like EQT), but is a go-to pick when prices rise towards that $4.00 area.

Jimmy

3:57

Quite a few years (decades) back I bought some double eagles. They were advertised as two time the then current value. I was expecting a cost of about $40.00 each but the price paid was twice the value of the gold. Seems like I paid about $100 each for the coins. That should date the purchase. Now I have given them to a grown child. Will they have any problem from a cost basis if he goes to sell them. I have no paperwork regarding the purchase.

Roger Conrad

3:57

Hi Jimmy. That sounds like it would be a pretty hefty capital gain were the sale declared in a way that was taxable--given what's happened with gold prices. And the default cost basis when there's no paperwork is usually zero, kind of like when you lose your ticket and still have to pay to get out of the parking garage.

I'm really out of my depth as far as advising you on this. But one reason a lot of people own physical gold like bullion coins--rather than hold the metal at a depository or owning gold stocks--is the privacy factor.

susan p

4:08

Question for Roger: Does Ford's suggested pivot from a battery focus on large-scale EVs into stationary battery energy storage for utilities, data centers, and the commercial grid have enough merit & impact on the company to make Ford an interesting investment? Thanks for your thoughts.

Roger Conrad

4:08

Hi Susan. Thanks for your question.

The stationary battery energy storage market certainly looks like a higher percentage bet than EVs right now. Is it really for Ford?

In the state of Michigan alone, utilities CMS Energy (NYSE: CMS) and DTE Energy (NYSE: DTE) have massive plans. But DTE appears to be going with LG Energy Solutions as the primary supplier.

I have to confess I'm skeptical when a company like Ford--with a history of being perpetually behind the curve--advertises a big strategic "pivot" and then writes off $19.5 bil. The global EV market was tough enough even with generous tax credits. But EVs are also getting cheaper and taking an increasing share of global markets. And it's hard to see Ford having a competitive advantage in batteries long-term, any more than it was able to achieve in EVs even behind tariff walls.

Ford is getting a little attention now. And it's not the only auto company retrenching. But I prefer Honda--which is gaining ground on hybrids and motorcycles.

Roger Conrad

4:08

Yields more too.

Guest

4:14

Hi Elliot, Would be very interested in hearing your thoughts on the highly touted SpaceX IPO ... just your thoughts as a long term knowledgeable observer of the market. Thanks

Elliott Gue

4:14

I must confess I don't know a huge amount about the stock fundamentally. I generally like to give IPOs some months to "settle down" before buying or recommending them. What I would say is that SPCX is a HUGE IPO -- this company could attain a market value of around $2 trillion when it goes public next month. I think back to all the highly anticipated US IPOs of my career and none even approach that size. Back in August 2004, when Google went public it was worth less than $30 billion (now worth almost $5 trillion). On top of that, we have Anthropic likely to come out in October with a valuation near $1 trillion. So, one thing I am watching is to see if people sell down some of their other tech exposure or speculative growth exposure to buy SPCE. I certainly think some of these speculative "space" stocks like AST SpaceMobile that have been soaring could see some pressure after that IPO. That didn't really happen with Google back in '04 but again it was nothing like this size at the time. In contrast, If the

Elliott Gue

4:14

market absorbs this stock without a significant hiccup, I'd tend to regard that as bullish as it would mean the speculative "animal spirits" are alive and well.

susan p

4:23

Question for Elliott: Your past Sunday FMS video diving into the intersection of global energy and the food on our plates was superb. I am wondering about specific investment opportunities to capitialize on the current prevailing winds? As an FYI, I saw Elliott reference his substack content on the 200-day moving average: If anyone is interested, I have never read a better explanation and context for this RSI indicator.

Elliott Gue

4:23

Thank you for the kind comments! Two stocks I am looking at are Corteva (CTVA) which I recommended a little over a year ago and then recommended selling for a small profit last summer. I was worried about corn prices at the time and CTVA did dip into October-November but has since taken off. They're actually splitting into two companies Vylor (seeds and genetics) and Corteva (crop protection). Both companies would benefit from a longer term bull market in grains and splits like this have a tendency to unlock value for shareholders. They have an investor day scheduled for mid-September. I am also looking at CF Industries (CF), which produces nitrogen fertilizer using US natural gas. They also make "blue ammonia," which is basically just regular ammonia except they capture and store the carbon dioxide emissions (Exxon is doing that bit), which allows them to sell it to Europe and Japan at a premium price.

Elliott Gue

4:29

Question from my E-mail: I was just looking over EOG and don't own any. But the PE is 8? Is that for real? And aside from that quick peak in March, it looks like it has been trading sideways for about 4 years now. Earnings look like they are improving year over year, looks like a good amount of share buy backs, so what give with the price?

4:34

Answer: EOG Resources is a shale E&P (Exploration and Production company aka a producer). Like most stocks in the group, it's cheap -- I show it trading around trailing earnings and 9x 2026 earnings. That said, I don't really use earnings to value E&Ps, I use free cash flow, which is a purer measure of actual cash flow they can use to buy back stock, pay dividends, etc. EOG is actually valued pretty close to peers like Devon (DVN). As for performance, it's all about oil. Oil prices ran up from 2020 lows to 2022 and then pulled back to the $50s late last year. So, EOG, like most oil-focused E&Ps, saw tremendous gains in 2020 to 2022 and then hit the proverbial wall, trading in a range until this year when oil prices broke higher. Our view is that sustained oil prices of around $80/bbl or higher will lead to a valuation re-rating for EOG.

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