Miller/Howard Investments
Miller/Howard Commentary
Trump's Impact on Financial Policy: How does "America First" impact your portfolio?
Part 1: A Review of the Markets Since Election Day
Michael Roomberg, CFA, Portfolio Manager/Research Analyst
Part 1: A Review of the Markets Since Election Day
Part 2: Our Views on Oil and Gas Industry Regulation
Part 3: Coal Will Continue to Decline, Regardless of Politics
Part 4: LNG Exports Provide Trade and Job Growth Opportunities
Part 5: Outlook on Automation, Geopolitics, and Energy

Transcript:

Nathan Dean: So Michael Roomberg is the co-lead portfolio manager for Drill Bit to Burner Tip. As the mouthful of the name implies, the portfolio makes equity investments across the entirety of the entire energy value chain. The portfolio has a particular emphasis on natural gas. We'll talk about that a little bit. He's with Miller/Howard. In addition to more of the traditional energy companies, which Michael believes provides the opportunity and to manage more effectively through what seems like shorter and shorter energy cycles, the portfolio is purely North American focused. Prior to joining Miller/Howard, he counted Miller/Howard as a client, as a sell-side at various banks and covered various sectors including industrials, energy, and water. He is a CFA and has earned his MBA Georgetown with honors.

Now what I first wanted to start off with was just some general thoughts about President Trump, and his impact so far. You know, you both have different sectors, different portfolios to manage, but any thoughts for our audience today right now on the market since Donald Trump's inauguration? The Dow Jones in November 2016 was like 17898, the day of the election. As of this morning, it was 21136. Any surprises, anything that you thought was going to happen, or not happen, but just could you give us a four month look-back?

Michael Roomberg: We had kind of a junk-led beta rally in the wake of the election, the energy sector jumped, through the next six weeks following the election, about 15%, and since then it's down about 20% from the high-water mark. Obviously that's much more crude and macro-driven than it is policy-driven, there really hasn't been much of a change with respect to policies, and legislation’s been stagnating.

One of the sectors that really we saw as a firm, a lot of investor interest, was the engineering construction sector, on the premise that all of these companies were going to build a 2,000 mile wall, and wouldn't have to pay any taxes on the earnings that they generated from that. Some of those companies were the highest fliers towards the end of the year. And now, having just checked this morning, have mostly pretty much retraced all the gains post-election.

So I think we're kind of back to where we started, in a way, of two candidates, one of whom was known, the other of whom was not known, and probably is still not known. And I think that's what markets are figuring out, both on the energy side, and on the broader.

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