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Tyson Halsey, CFA profile picture
Dear Skih20 and P Haye,
I had a California software entrepreneur with $2mm ask me the same question. He contacted me through my website. Since I like to be compensated for my work, I will answer the question generally as if I were answering for $2mm investor. This person wanted 5% income.

I would put 50% in income securities:
4 MLPs EPD ET MMP and MPLX average yield 7.99%
AM Antero Midstream 8.9%
GGN Gabelli Gold, Natural Resources & income Trust- a covered writing closed 10.3%
TELZ ? a tellurian convertible stock 9% and TELL
TEI Templeton Emergin Market Income? 14%

On the equity side:
I don't use ETFs much, but XLE and XOP would be attractive energy proxies.
I would want industrial exposure and Precious metals.

I tend to look for big return opportunities:
-TELL is aggressive, but it is my largest position personally and for my clients. I think Souki founded and made Cheniere and will turn this into a 20 bagger like Cheniere.
-AR is my second largest position. I initially bought it a $1/share in March 2020 and it got to $48/share. Smart former Lehman energy investment bankers run the company. They have been buying in their own stock and debt since March 2020. There are 29 other energy names that are retiring debt and stock.
-AM is my third largest.
-covered writing ETFs and closed end funds make sense.
-Gold and PMs. GLD GDX and SLV. I would own and would slowly scale out of TELL as it moves to its FID and dollar starts to rollover in next 6 months.
Individual names in the PM space: GOLD and SBSW and BLAGF (courtesy of Crescat.
-I own HCC and HNRG two coal stocks
-TFFP- is an interesting alza like drug delivery platform company about to hit milestone payments
-BMA- Banco Macro and YPF- Sociedad Anonima two dirt cheap Argentinian companies

There is an element of uncertainty here where when the VIX is low you could have 20-40% cash and then use spikes in Vol to add to longs. That depends on client preference for active management and client's risk tolerance.

Clients with low-cost basis stocks should write calls against those position.

I would consider some short positions through ETFs including SH, SQQQ, SARX when this rally runs out.

This notional $2mm portfolio should yield $80,000/yr.
My fee is typically 1.3% so $70,000 net.
Sign up on calendly on www.incomegrowthadvisors.com $250,000 minimum.


I prefer smart wealthy investors who give me discretion Interactive Brokers but check in every 3-6 months to understand what we own and why.
winthorp profile picture
@Tyson Halsey, CFA I like tell quite a bit- I did very well with LNG (Cheniere) when it was $5 sold too soon- Souki is a visionary and pioneer of US LNG. Also COP, Xom, chevron and Oxy will do well- Buffett got permission today to buy up to 50% of Oxy what is that saying about energy! Epd solid choice great yield. I too believe the earnings of tech still need to come down and as rates rise their DCf’s are worth less in rising rate environment. Recent legislation the Inflation Reduction Act is anything but inflation reducing. The fourth quarter will be tough in market as Putin chokes Europe’s energy supplies on and off. The Germans and Italians better start chopping firewood. Powell will keep raising rates and force unemployment higher- we are in a recession NOW denying it because of distorted labor statistics is ludicrous.
Energy stocks are already moving smartly from recent bottoms and I believe new highs will print- also still believe Buffett’s creeping takeover of OXY continues possibly to an outright purchase with a vertical integration into Berkshire Energy. IPO’s are virtually non-existent- the tax in buybacks is counterproductive. Energy companies will continue shareholder returns via dividends, variable dividends and buybacks. They will only modestly increase capex as DC’s hostility and green boondoggle strategy proves catostrophic. Bad fiscal and monetary policy replays the torturous Jimmy Carter era until inflation subsides substantially.
Lewis Winthorp
Astutely contrarian, thank you sir.
Quickbuck01 profile picture
I agree with pretty much everything in the articule. BUT ... retail investors LOVE tech stocks, and are willing to give multiples that are much higher than in other industries. Thre is a bias toward buying the stocks more because the investor love the product (like Tesla or Apple) rather than for its future cash flows. We can see today oil heading south and the Nasdaq up... This behaviour makes me doubt about following the recomendations of the article.
As it relates to your strategy, let’s assume that I have $100,000, and I want to invest the whole amount into stocks or ETFs. Please provide an investment list (and percentages) that would fit the vision you laid out. Thanks!
Spot on
Thanks for the good read. But as for your outlook for the dollar (and indirectly thereby, the PM's), might your analysis fall short by not taking into account the other principal Forex components of the DXY, and their potential further weakness? In this respect the current inflationary environment is decidedly DIFFERENT than the two previous inflationary phases you cite (1971-82 and 2001-08). For much of this year the big money trading computers seem to have been arbitrarily programmed to buy/sell gold according to changes in the DXY, this having driven down the price of gold in a big way despite the obvious inflationary loss of the dollar's purchasing power. Could your positive outlook on gold/silver blow up, if Italy and then the EU unravel and the Euro crashes? And what if the mad money printers at the BOJ do not blink? What if we see both? Are you prepared to merely assume that big money's trading computers will simply be re-programmed to decouple with the DXY at some point well before gold is destroyed, and then stay decoupled?
I agree inflation will persist longer than anticipated (already has) but the upcoming recession will tame the inflation beast.

Your thesis is good for a portion of one’s portfolio, not the whole thing.

Your bearishness on tech will reduce your returns, but will also reduce your risk, so I understand why you’re bearish based on your age
bluescorpion0 profile picture
I would say it is not the timid investors that will suffer but the insufficiently timid ones.
Amen and thanks
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