Haymaker Responses
Thank you for the questions and comments!
“If you ask me anything I don’t know, I’m not going to answer.” -Yogi Berra
First, everyone, I apologize for being so slow in responding to some of your feedback. The last two years have gone by in a blur between ramping up Haymaker and attending to my heavy commitments at Evergreen Gavekal.
Below you’ll see some replies I hope everyone will find helpful and informative.
To Joshua on U.S. refineries: Yes, it’s true that our refining complex is not well suited for the sweet/light crude produced by U.S. shale basins. In general, our complex refineries are much better at processing heavy crude.
Also to Joshua: Thanks for the list of the features you value from us: stock picks, macro outlook, guest experts, and my mea culpas. To paraphrase what Winston Churchill said about one of his political opponents, I have much to mea culpa about!
To Rex: Yes, you’re totally right the U.S. government has a funding crisis of the first order these days, especially on the long end. Well done on your patience with precious metals. Gold is rewarding that this year (presume you saw the front page of the WSJ’s second section yesterday).
To Charles C: Agree a 60% type market crash is unlikely, at least anytime soon. However, there is copious evidence that speculative spirits are out of control. For example, same-day (zero to expiration) options represent 40% of derivative volumes related to the S&P currently vs 5% in 2016. The crypto complex is clearly going bonkers right now with worthless Dogecoin (Jokecoin?) valued at close to $20 billion, monster valuations for countless companies (per this week’s Making Hay Monday), and the revival in SPACs, to name a few. Basically, the COPS — the Crazy Over-Priced Stocks — I was so critical of in the second half of 2021 are back in the limelight and cranking out big gains. Before long, I think those will turn in to big losses; they could easily go down 60%... or more. It does look like they are breaking down as they did in late 2021.
To Dan: Regarding Carrefour, we’ve checked with some of our numerous Europe-based team members and they don’t feel the stores are sub-par, at least in Western Europe. In their view, they are similar to Leclerc. Certainly, their same-store sales have been healthy lately. They did exit Poland, where it sounds like you had the most negative impression of their quality (maybe Spain, too). Carrefour is certainly no Costco; its valuation is just a fraction of the Washington juggernaut’s.
To Mike: Glad you like Haymaker and are making money with our ideas. As you may have noticed, I tend to highlight situations where I feel the downside is relatively modest.
To Gary J: Yes, I agree that those of us over 50 tend to have a more balanced approach to investing… and I’m way, way over 50! As Buffett has often quipped, in his book Rule #1 is don’t lose money, and Rule #2 is don’t forget Rule #1.
To EK: Thanks for these sentiments: “Your individual suggestions are among the best ever. Your willingness to be specific and timely puts you in a class by yourself.” EK, can we clone you? Seriously, thanks very much for your kind and encouraging words!
To Scott: Glad you want to learn more about what you describe, appropriately, as our common sense approach to investing. Unfortunately, in the financial markets, as in politics, common sense isn’t all that common. You may have noticed we try to balance momentum (stocks and commodities breaking out to multi-year new highs) with reasonable valuations.
The following are from over a year ago:
To Matt: You are, I believe, one of the few who acts on any of our Down For The Count ideas. I hope you are still finding value in some of those.
To Jeffrey G (who found my Green Energy negativity to be premature): Advantage Haymaker!
To Dan (who thought that natural gas transporting might be a better play than gas producers in early 2023): You were spot on. The natural gas pipelines have been outstanding performers while the producers have been pretty much flat. RE: LNG shippers, we did highlight the largest in the U.S. and it had a nice run before pulling back somewhat. SHEL is an interesting name in the LNG space (though it is highly diversified). You may want to look into it more closely. It does appear to be experiencing a major upside breakout. (A five-year new high.)
To Six Bravo: You have liked the royalty space and that makes sense. We did mention STR toward the end of last year as a candidate to bounce back from tax loss selling. It has had a nice return since then, especially including the distribution.
Thanks, everyone, and keep the feedback coming. I’ll do my best to respond in a much more timely manner.
-David “The Haymaker” Hay
IMPORTANT DISCLOSURES
This material has been distributed solely for informational and educational purposes only and is not a solicitation or an offer to buy any security or to participate in any trading strategy. All material presented is compiled from sources believed to be reliable, but accuracy, adequacy, or completeness cannot be guaranteed, and David Hay makes no representation as to its accuracy, adequacy, or completeness.
The information herein is based on David Hay’s beliefs, as well as certain assumptions regarding future events based on information available to David Hay on a formal and informal basis as of the date of this publication. The material may include projections or other forward-looking statements regarding future events, targets or expectations. Past performance is no guarantee of future results. There is no guarantee that any opinions, forecasts, projections, risk assumptions, or commentary discussed herein will be realized or that an investment strategy will be successful. Actual experience may not reflect all of these opinions, forecasts, projections, risk assumptions, or commentary.
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Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this material, will be profitable, equal any corresponding indicated performance level(s), or be suitable for your portfolio. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and other sources may be required to make informed investment decisions based on your individual investment objectives and suitability specifications. All expressions of opinions are subject to change without notice. Investors should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed in this presentation.
Thanks for the replies!
from Yra Harris----i didn't write a comment but I am old enough to forget