Hey Subscriber,

Hey let's start out with a blinding statement of the obvious-- earning upwards of 800% returns from April 6, 2020, to June 30 2021 will I pray never happen for us again in a 15 month period.

Why do I wish for lower rates of wealth building and income from our TR portfolios?

Because I can tell you from personal experience it is healthy for a DIY investor (or professional money manager as well) to anchor one's future market return expectations at the bottom level of our brain stems and not on the once-a-generation enormous wealth we created from April 6 2020 to June 30 2021.

We need to wipe our expectation screens clean or we will skew our long-term results and expectations as a DIY portfolio manager--in other words get greedy and sloppy.  Also obviously our $22 trillion US economy (not to mention the $82 trillion world economy) can not endure another global stock market crash due to putting the global economies into another medically induced coma. 

For example--today I was adding up our 2020/2021 Ultra Income and Ultra Growth individual portfolio returns today and all I could do is shake my head and hope our dear subscribers and managed account clients take their 15 months of brokerage statements in their hands, open a VERY fine adult beverage of choice, and then throw them into the recycling trashcan.

Exhibit A--USA Compression (USAC). At $16.80 today--and a $4.80 cost basis on our 4/6/2020 purchase, we now have a $12 per share profit. $10,000 in USAC (rounded up to 2200 shares) is now $36,900 (and I know a few All-Access members sitting on 10-20,000 shares). 

But with USAC we have also received like clockwork $2.62 of cash money dividends. 

Total return in 15 months 318% or about 30 years of stock market gains. 

But many All-Access members in our All Access trading room have sold the $10, $11, $12, $13, $14, and $15 put options for $1 or better (and we have sold the $15 Sept 17 USAC for our own accounts 3 TIMES since April 2021) and had ZERO USAC Shares "put to them" i.e. the price of the underlying USAC for a motley 477% return.

Why? Look at this chart--it is the mother of all put option selling that all us more advanced DIY investors dream of experiencing. And again--the first rule of put option selling--only do it on a stock that you would LOVE to buy more of (at a price minus the put premiums you have received.)


Key Point: For many of us counting cash money put option premium earned, we have a zero-cost basis in USAC and other Ultra Growth names and now our annual return on investment is infinity.

THAT my friends are once (or twice) in a lifetime results. The same math applies to OPM, DCP, AM, and others like NEWT that we "sold" for the portfolio but advised IF you owned in from $4/$12 after splitting NEVER EVER SELL it.  

The Second Half 2021 Game Plan--Wait for the Fat Pitches & Be A Sniper

Anyone who ever played baseball knows A) you wait for the pitch YOU like and B) you don’t take the pitcher's pitch unless you have two strikes on you. 

Stock picking in secular growth stocks with the market valuations at all-time highs (thanks to a 1.4% discount rate on future earnings vs. say the normal 3-4% based on 5 or 10-year risk-free returns on bonds) is a similar game:
1) WE ARE IN NO RUSH TO BUY STOCKS PER SE--the time to rush into stocks (and SPACS and options) was when the stock market was crushed to prices that indicated the world was ending. We bought (and traded) over 45 different securities between April 6 and June 30th, 2020--and 16 more October/January 2021.
2) You Just Earned 40-50 YEARS of Stock Market Gains in 15 months--your job now is to
a) KEEP that wealth growing higher (that means no big margin loans ok!)
b) reinvest or SPEND your sick level of dividends
c) be a "sniper" focused on long term targets and pull the trigger on Fed or inflation-induced 5% fear sell-off and
d) Use overbought or oversold RSI (i.e., relative strength >75 RSI reading or <40 or more) to milk 10-20% yield out of your high yield and no yield financial assets.
e) Use whatever amount of your liquid wealth to speculate on juicy stock option set-ups. For me that is 5%

Note to self: Why there is no market to sell covered put and call options on single-family homes and condos I will never know!

BTW I cannot tell you how many money managers I personally know or know of that are baseball junkies. They are the dudes and ladies who keep score and stay for the entire game—call it the Zen of money management

Anyhoo-with rates historically low UNTIL we hit the Fed’s employment rate (<4% unemployment for those seeking a job) — we want to own >10% yielding plays in Ultra Income and 5-year secular 20% recurring EPS growers + some early-stage emerging disrupters.

The Bull Market For Financial Assets Thesis is Still Alive and Very Well in 2021-2022
Most modern countries are at or close to herd immunity for Covid-19 (and yes there are parts of America that are third world countries when it comes to getting vaccinated--we all know who and why they are.)

With the caveat that the Covid variants continue to infect mostly fearless but healthy young people and old stubborn folks who (on a relative basis) don't add much to the overall economy, the bull market is still on like Donkey Kong because of the immutable laws of financial and $trillion pension plan gravity:
1) There are still WAY too many $trillions of newly created dollars/euros/yen aka "liquidity" chasing increasingly negative after inflation "safe" assets--there is an institutional bid for EVERYTHING with a yield or growth
2) For US pensions/endowments and other major owners of equities and bonds, 4% inflation means they are losing 3%+ every year after inflation on their "safe risk off US 10-Year bond" which does NOT MEET their $trillions in pension/safety-net payments due in the ever nearer future!
3) This unstoppable daily/weekly/monthly/yearly drive for overall after inflation asset growth to meet pension payment obligations (with higher payments = to annual price inflation rates)
4) This means that the game of chicken between the major Central Banks (sorry Brazil does not count) of holding interest rates at historic lows while printing historic amounts of cash to pump into their respective monetary systems never ends
5) Since the Fed just told us again they promise free money until 2023 or the workforce is back to 2019 levels--and that promise is about 120% baked into equity and bond valuations already
6) The Fed is boxed in by 2 more years of $trilion stimulus that begins to SLOWLY taper in December/Jan 2022 while
7) Biden administration has the votes for $trillion annual fiscal government deficits while
8) 10,000 Americans turn 65 every day until 2030 while the Federal Government does not collect enough Social Security and Medicare taxes to pay CURRENT beneficiaries without borrowing
9) 40 million new brokerage accounts have been opened in the last 15 months--the retail is BACK at higher than Dot Com days
10) The poor suffering "savers" in America and the rest of the modern world--you know those wonderful folks who have the discipline to EVERY month put savings away in risk-free assets for retirement--they now realize they HAVE TO buy equities (via ETFs and mutual funds) to have any chance of a comfortable retirement.

And sadly, unless they own a home in one of the 65 US counties that produce 72% of the ENTIRE $22 billion US GDP or in rural vacation type areas, they better own that home free-and-clear because cash and C.D.s and money market funds have been the road to working and retiring poverty for decades.

Why the Stagflation Bears Are Wrong For the 12th Year In a Row And Counting

Why aren't we all hiding in bomb shelters with shotguns and gold/silver bullion?

Because the Central Bank financial asset bubble has been blowing up larger and larger since 2010--and you could have made every one of those "sky is falling" arguments as soon as quantitative easing started--and many old-school "experts" have missed the greatest bull market in history because they got one thing terribly wrong: the runaway inflation they feared never arrived.

You know the drill by now. Runaway inflation and currency devaluations never arrived because it turned out they never factored in 1.2 billion new hands and eyes available to put stuff together at 60% lower prices (at the cost of 10 million low-skill jobs in America).

They never thought the Fed Funds rate would be zero to .25% for 10 years. They never thought consumer and commercial input goods would get Amazoned and cost 40% LESS in 2021 than in 2012. They could not imagine that just buying the QQQ with $100,000 in 2009 would double every 4.12 years.

Etc etc. etc.

1970 inflation never came. We had a 40-year bull market in bonds--they never saw that either. They did not see 5G wireless broadband phones and internet and Amazon and....ok you get it.

Conclusion: YES the likelihood of future political pressure on the Fed to create more borrowed money and keep the wealth effect including all the excesses (my neighbor refinanced an $800k HELOC loan in 10-minutes at a 2% LOWER rate!) looks endless.

The music will eventually stop. The most at-risk households (you know the 65% of American households living in actual poverty or working poverty not able to pay the 10 monthly bills of a lower-middle-income lifestyle) will live less-than-optimal lives and unfortunately, live 22% shorter lives on average.

Fact: In our beloved upscale Scottsdale 85858 zip code, the average life expectancy is 85 (for us 63-65 ages--92 for women/88 for men). Yet the folks who live in Phoenix’s 85004 zip code just 12 miles away, for example, have an average life expectancy of 71, according to a new study.

You want to know what happens when 65% ish of Americans get left out of the wealth we enjoy? Read that paragraph on life expectancy again.

But I promise you only one thing as a Tranformity Research subscriber/wealth management client: Just as we did in March 2000/June 2008 and February 2020, you and I will be long gone from the equity markets BEFORE the music stops.

Our MacroMarket Timing Index has been absolutely perfect on calling out bear markets since 1989 actually. And at 20.1 today--our Recession/Bear Market Coming (i.e, a reading under 15) is at another record.

By the time we get the next REAL economic recession (not a medically induced economic coma) you and I will have 5-10X more financial wealth than we ever imagined and picking up amazing yields and bargains--once again.

Finally--Let Me Wake Up Anyone Who is Cowering In The Corner of Their Beautiful Home Worried about "The Coming Killer Stagflation" in America and The World.

2021 Inflation is NOT 70's runaway inflation, ok?

Jay Powell has gotten the >2% inflation he wanted (after inflation has been <2% for 20 years.)
But the usual suspects are now screaming again “ OMG we are back into 70’s stagflation!!!”

I can read the Weiss Financial Publishing headlines "The 4 Horseman of the Economic Apocolypse" now.

OY! It appears that it has been SO LONG since the modern world has had actual real runaway inflation—the 70’s and early 80’s — some investors today don’t know what the heck runaway inflation actually IS.

Let me be clear: Runaway i.e., self-fulfilling prophecy inflation happens when buyers and sellers EXPECT higher prices in the near and distant future so they hoard input materials. This activity makes sense in the short run.

But the hoarding (think empty aisles of flour and toilet paper circa pandemic 2020) in turn creates a negative feedback loop of not enough supply and too much demand. This feedback is self-fulfilling in that it of course inflects higher ask and bid for input prices for goods and some services and commodities. Those higher-for-longer input prices get passed on to consumers.

But the HUGE differences between today vs. ’70s start with the fact that 28% of the labor force in those days were unionized with AUTOMATIC contractual annual wage increases tied to CPI (BTW Social Security payments today are now indexed to CPI increases, too--did ya know that? Where we gonna get the money to pay 5% increases in SS? LOL of course--we just borrow it!).

Thus, labor costs—70% of service and 30%ish of manufactured/processed input costs—spiraled higher in a negative feedback loop at the same time.

In addition, let us not forget the whole 70's US runaway inflation spiral started when we had this little oil crisis aka our “friends” the Saudi's and other Arab oil producers cut off their crude oil exports to the US aka The Oil Embargo in 1973 caused by the Arab/Israeli War.

That jacked up US petroleum input costs 3x-4X (most directly gasoline prices) and created the Great US Oil E&P cycle that lasted until 1989. I bet it would surprise most Americans today if they read that “oil prices were raised 3x-4x 1972 prices—but they were.

Remember waiting in 2-hour lines to get gas?

If you remember, during the 1973 Arab-Israeli War, Arab members OPEC all imposed an embargo against the United States (and other pro-Israel countries) in retaliation for the U.S. decision to re-supply the Israeli military and to gain leverage in the post-war peace negotiations.

The embargo both banned petroleum exports to the targeted nations and introduced cuts in oil production--remember that double whammy?

But there was more!

The price of oil per barrel first doubled, then quadrupled, imposing skyrocketing costs on consumers and structural challenges to the stability of whole national economies.Since the embargo coincided with a devaluation of the dollar, a global recession seemed imminent

To complicate matters, the embargo’s organizers linked its end to successful U.S. efforts to bring about peace between Israel and its Arab neighbors.

Fed Chairman Paul Volker to the Rescue!

Given out an out-of-control spiraling price and input goods feedback loop, Fed Chair Paul Volker CRUSHED the demand side of the business cycle to create a recession with a 15% Fed Fund RATE!! PS--This is time you forward this newsletter to your kids and grandkids and tell them "My first mortgage in 1978 was 14%!!"

Key Point: The way you break ANY feedback loop in to break one its main links…and boy did 15% interest rates break excess demand for goods and inputs which, in turn, eventually cut the price spiral.

Now Let's Look at Today

The Covid medically induced coma from the pandemic lockdowns crushed the economy without raising interest rates—THAT IS the crucial difference that most fail to get.

You can’t compare the 70’s runaway inflation today (and let’s not forget that in 72 Nixon took the dollar off the gold standard since the US only had about 25% of outstanding dollars back by physical gold) so we had runaway currency inflation too for things priced in dollars.

After Powell's testimony today, here is what I find to be the REAL actual big picture for building more wealth by investing in secular transformational economic sectors.

Big picture—1) Fed on hold till late 2022 at earliest based on their self-imposed mandate for the US to return to 2019 unemployment rates (with fewer people in the available workforce after 7 million retirements/permanent dropouts of the workforce)

2) input price inflation DOES reduce in everything (see lumber prices) EXCEPT for minimum wage and low skill hourly work and yes, those prices get passed through to consumers.

3) That means that 2022 sets the new "base rate" for labor cost inflation--so 2023 is the year that all the disinflationary forces that have held PCE inflation flat for 30 years KICK IN and return core PCE inflation back around 2%.

That environment AGAIN makes 3–5-year 20% secular EPS growth stocks (that are also buying back $100 billion of their stock) — our FB MSFT ADBE GOOGL AMZN APPL remain the simplest way to make money in this long-in-the-tooth bull market.

We will post charts and new buy under points by week's end--needed to get through Fed testimony today. Here is the current Ultra Growth portfolio

On the fiscal side, odds are now great that Biden’s $3.7 trillion budget will get passed in the reconciliation process—paid for by raised taxes corporate and >$450,000 (sorry Mr. Turbin) and borrowing another $1 trillion and the expansion of the safety net for the bottom 60% of American households.

This fiscal stimulus is a tailwind for major infrastructure general contractors and literal infrastructure materials but those stocks are pretty well priced already (we are working our sources for a few under followed plays).

But the biggest commercial and socioeconomic transformation in many generations—the 250 million global Hybrid Knowledge Work transformation—is permanent (with a few exceptions) and has many investment opportunities.

This means more than ever that cloud-based 24/7 100% secured digital work platforms with dozens of vertical APIs (application programming interfaces that deliver cloud-based SaaS functionality like Twilio sending you 6 digits you enter to open your brokerage account from a new device) are only going UP in value in many cases.

Action to Take: WE BUY ON 5% DIPS!

The reason is simple: in a return to a 2% GDP growth world, the subscription revenues at such high net profit margins and low capex requirements are the winning combination to make a company (and their stock) rise in value. That also means a lot of M&A in the hybrid knowledge economy digital SaaS infrastructure spaces.

New UG buys in the New HybridWork economy out shortly. Again...there is NO RUSH to add more risk to our portfolios...squeeze those humungous dividend checks tight!

We will ALSO be looking at special situations and corporate transformation opportunities that have not been priced to insane levels.

IN Summary:

We put the US economy and the world into a medically induced coma to save millions of lives…and that has never happened before in a $22 trillion annual economy let alone a world with $80+ trillion-dollar annual turnover.

We moved heaven and earth to come up with never seen mRNA vaccinations that save the world--by an immigrant to the United States by the way.

By definition, all kinds of kinks and system SNAFUs have happened and will happen and are now in the process of getting fixed BECAUSE in capitalism the fixers can charge premium prices--for now!

Key Point: Give a few years and dynamics of capitalism of higher prices will bring new supply to America and the world and will be the cure for higher prices—and transportation SNAFUs too. Let's use lumber prices crashing 40% as the poster child of how the short supply/hoarding/price spikes/prices too high/new supply comes on the market and prices crash matrix.

Jay Powell is making sure the slow tapering of the $125 billion a month bonds and mortgage backs beginning in December or January 2022 IS priced into the market—he is doing everything to NOT have a 2013 Bernanke temper tantrum.

Action Points: 1) We should USE Fed or inflation jitters in the markets to BUY FAAAMG and selected Hybrid Economy Dominant API players and special situations to hit the FAT pitches.

2) We will HEDGE Energy MLPs with XOP Puts if Oil Does Not Get back over key support.

3) Natural Gas prices are soaring as we forecast--we will sell puts on AM USAC DPC and other MLPs opportunistically

4) TIME to SELL some FAAAMG puts and buy some 2022 calls—will post as the opportunities come

5) Update on Lomiko Metals--CEO Gills told me this morning about the game-changing PEA--"Anyday Toby--any day!" Action to take--IF you can get shares under .10-.11--they are a STEAL right now

Cheers--now that I know I am going to live to 88--I need a cocktail!
Toby




Transformity Investing Rule #2: We are long financial assets for as LONG as the Federal Reserve makes financial assets the only wealth-building game in town.
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Our Q3-Q4 Sector and Stock Picking Thesis

1) Macroeconomic Phase: Inflation Headlines Runs Hot But the Reopening Trade Will Not
We downgraded Ultra Income to a 50% allocation simply because we need to have some cash to invest in the biggest global socioeconomic transformation in a generation: the white-collar post-pandemic hybrid office/home office work from anywhere economy.

For a long time, the easy money has been made by focusing on the macro backdrop and the beneficiaries of it— and throwing darts at the lockdown winners, the reopening beneficiaries, the easy-money beneficiaries, and those who can withstand tighter policy from the Fed.

Those macro forces, however, are waning as a driver of stocks. During the past year, the portion of the S&P 500 movements that can be explained by macro forces fell from 90% to 38% by mid-July, according to a statistical analysis by Evercore ISI.

Still, with our outlook for actual price inflation to peak with growth peaking in Q3/Q4, to continue to make 5X-10X SP 500 index returns, we have to look deeper into the secular transformity and specific businesses to see which ones have the ability to thrive in a more complex and lower growth environment.

A focus on 3-5 year secular growth rates and margin expansion/pricing power/subscription revenues is how we do that. Our thesis also includes money manager muscle memory--with so many macroeconomic uncertainties, our thesis in mid-May was "looking a year ahead, the "game-over digital platform dominators will have higher, not lower sales and profit margins. And no one ever got fired for buying and owning our FAAAMG apex digital predators."

Right on cue, Facebook/Apple/Adobe/Amazon/Microsoft/Google and Taiwan Semiconductor bottomed mid-May and have been rallying (ex-TSM) ever since.

Companies that have the ability to raise prices as their costs increase should be able to withstand the downward overall GDP forces—even if the Fed hikes rates sooner rather than later to limit inflation and slow an overheating economy (which we would worry about if Jerome stumbles and bumbles tomorrow at his Congressional hearing--but he knows his Federal Reserve game face and schtick so not worried.)

Key Point to Stock Picking in 2H 2021: Pricing power and the ability to maintain profits in secular growth sectors will continue to be increasingly important for big-money institutional investors who are, with nearly $400 billion of new ETF/Mutual fund deposits the marginal buyer of non-FOMO/Reddit Raider stocks.

Action to take: Let's A) Lower our second-half performance expectations just a wee bit and B) Take our portfolio allocation to 50%/45%/5% Ultra Income/Ultra Growth/5% Crypto.  

The Transformity MacroMarket Timing Index: 18.1 is an all-time high score going into the Q2 GDP report out July 30. The risk of an economic recession in the next 4-6 months with 60% of the population vaccinated/post-infection antibodies is less than 1%.

In other words, the risk of a recession anticipating bear market for stocks (i.e., 20%+ downdraft) in the next 4-6 months is virtually nil.  

The Atlanta Fed's GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2021 is 8.3 percent on June 25, down from 9.7 percent on June 24. After this morning’s releases from the Bureau of Economic Analysis, the nowcast of second-quarter real gross private domestic investment growth decreased from 13.1 percent to 6.8 percent.

Yet the New York Fed Staff GDP Nowcast stands at just 3.4% for 2021:Q2 and 4.1% for 2021:​Q3.

Why the massive confusion?

Because no macroeconomic model has ever modeled a post-pandemic economic recovery in the modern era before--that's why.

There has been no established playbook on how to trade the 2020 Covid-19 pandemic--so everyone found a narrative that was working (Work from Home/Enterprise Digital Transformation/Energy Demand Recovery/Pimp My House/Prison Covid Lockdown Beneficiaries and of course SPACMania etc.) and just throwing darts made money IF you stepped into the teeth of the pandemic lockdowns. 

We all had to make it up as we saw the data and the investable narratives and I am proud to say we got a lot more right than wrong. 

The Known Knowns Second Half 2021 And Our Strategy to Profit From Them

1) We probably will now hit PEAK PENT UP GDP rebound in late Q3-early Q4 according to our model and others we trust and follow. September means paying better to stay home ends and school begins (I can hear the screams of exstacy now in families with many small children!)

But what peak GDP growth means to stocks is the re-opening surge in GDP and cyclical stocks is peaking--which in stock land means the "cyclical/value trade" as in buying the business cycle sensitive companies with the most operating leverage (where higher sales revenues from the upturning business cycle go right to the bottom line with little incremental additional costs to produce another widget or sale) should be peaking in value this summer. 

It also means our move BACK INTO the dominant secular growth technology names in mid-May was almost the bottom of the QQQ to the day (better to be lucky sometimes than good!).  The reason is simple: a slower-growing economy makes the highly reliable/high margin and largely subscription-based or global recovery juiced ad-based revenues of digital tech platform companies MORE attractive than the cyclical plays that have had a very nice 9-month run. 

Facebook winning their monopoly case does not hurt our mega-cap dominators, either (although a part of our thesis for owning these global digital dominators is that they are worth 30% to 50% MORE broken up into 2-3 $500 billion stand-alone pure plays). 

In addition, our higher Ultra Growth portfolio weighing recognizes that about $800 BILLION in stock buybacks have already been approved--with more on the way. This tailwind for stocks is up 40% from 2020.

And...capital spending (non-aircraft/non-defense) is ramping up 25% from 2020 levels and are near levels not seen since the early 1990s. We and Morgan Stanley have U.S. capital spending rising to 116% of prerecession levels. By comparison, it took capital investment took 10 years to reach the levels of the 2007-2008 recession. 

Let's face it: between 7 million more retirements than normal, 9 million jobs to fill, 80 million white collar workers now in "hybrid" work environments and 20-30% higher blue-collar/service salaries in 2021 than 2020, owners and managers have NO OTHER OPTION than to add automation and reduce headcounts when possible.   

Key point: All of the above makes THIS the most important chart in the stock market today: the QQQ. It shows the divergence in secular growth and "value" stocks that started in mid-May and has the Value Index $MUV poised to break support while the QQQ breaks out! 

$MUV Value Index topped out near to the DAY May 12 that the QQQ bottomed--gee I guess markets really DO look 4-6 months ahead and discount that value back! 

Here is the 3rd most important chart: The Dow Software Index IGV--which is overbought as we type (and needs a healthy pullback AFTER the money managers who are piling in for window dressing for first half close tomorrow.) 

Ultra Income Portfolio

Our amazing proxy on Energy Midstream Transportation AMZA is correcting after a mind-blowing move off the $4.50 March 2020 lows to $31.50 a few weeks ago. We should look for support at the 100-day moving average (but bear in mind the near 10% yield today for those who scooped up AMZA under $5 in March 2020 is nearly a 50% annual yield--you would be INSANE to sell it EVER). 

PS--if you are a holder of our Ultra Income stocks, feel free to join us in All-Access Trading Room and learn how we are now SELLING AMZA $30 call options and USAC and DCP and now OMP to earn extra yield!

If you have a large stake in Ultra Income, it's time for you to manage your Ultra Income investments like a pro--get your one-year All-Access privileges here and scroll down to the All-Access membership. 

Action to Take: BUY Chesapeake Granite Wash Trust (CHKR) under .75 for near 30% annual yield + 50% Upside. 

One of the ways we are going to keep crushing the SP 500 index is to constantly find and take advantage of high yield securities that got insanely crushed by the energy price meltdown of May-November 2020.  This is how we found Oasis Midstream (OMP) at such a screwed-up valuation (more on OMP in a bit). 

Chesapeake Granite Wash Trust, like any natural gas or oil trust, simply collects royalty checks from energy wells it owns in the Granite Wash region of Oklahoma that they lease to energy drillers and operators who produce oil/nat gas/NGLs. Those royalty checks are 100% correlated to the "wellhead" price the operator gets in the free market. 

When CHKR cut its dividend to almost nothing ($0.0063) because many of their wells were stopped from production by their operators as uneconomic, the shares got priced as if they were out of business. To add injury to insult, the NYSE notified the trust of potential delisting in February 2021. 

WE have been waiting patiently on CHKR to raise its quarterly dividend and buy it while the world ignores the stock (it's a $26M market cap) and sure enough, its Q2 dividend went from the $0.0063 nothing burger to a 641% increase to $0.0467 quarterly distribution. 

With third-quarter oil/gas/NGL prices 10-20%+ higher than Q2, our back-of-the-envelope math says 5-6 cents a share Q3 dividend, and forward, is a virtual lock. 

Those of you from my ChangeWave Research days know we LOVE these forgotten energy trusts that are too small to have ANY Wall Street coverage. We made a fortune in energy trusts in the 2000s. And yes, with Transformity Research initiating coverage, the hedge funds that subscribe to us and the coverage we get on social media will amp this miss-priced trust to $1 or more easily. 

SO--you want to be into CHKR early before the sleepy heads and office-bound subscribers get into this 30%+ yielder with 30% upside too. 

OMP--You Get Another Chance to Buy It UNDER $26! 

Oasis Midstream (OMP now owned 71% by Oasis Petroleum, Inc. OAS) sold about 4 million limited partnership units at $24 last Thursday and used that cash to redeem the same number of common interests owned by OAS before the transaction.

The $24 price from the underwriter Morgan Stanley was essentially the 70-day moving average price (which is common in MLP secondaries)--especially since OMP, which we have owned from November 2020, skyrocketed from $9.56 to $35.70 early last week (and congrats to those who sold into the melt-up--I noted a number of All-Access members talking about sell stops around $32-$33--I hope you love your new Porche SUVs--it's the SUV of choice in Scottsdale AZ!.   

Has anything changed with OMP?

Nothing except OAS owns less common units and some else owns more. There is no equity dilution and OMP the business is hitting on all cylinders with new natural gas and oil pipelines coming on stream later this year. OPM generates about 140% of the cash flow they need to keep their dividend near 10% and has PLENTY of cash flow to raise the dividend. 

The deals management has made in 2021 have just been very smart financial moves utilizing their strong financial position to deliver meaningful and tangible benefits to their unitholders.

I love it when we get a second shot at a superb operating company--do NOT miss this opportunity!

OK...we are just getting started. If you need to trim some Ultra Income positions to build some in Ultra Growth, that's fine. We have been trimming DCP, USAC, AMZA, and OMP for the last month simply because they become WAY overweight in our portfolio--that is simply called prudent portfolio management. 

Part II and Part III are ALL about secular growth Ultra Growth sectors and stocks. We will be taking advantage of the up to 50% shake-outs in Green Energy sectors, semiconductors/equipment (finally on track again), and other 3-5 year locked in secular growth segments and sectors.

Don't leave your laptop at home if you are making a July 4th getaway somewhere--our new picks will definitely pay for quite a few vacations!