In case you missed my column from Thursday, let me give a recap: If you want to be bullish on big tech now, you merely need to believe the following:
Russian President Vladimir Putin is "just kidding" in Ukraine, and a peace deal is imminent.
Fed Chief Jerome Powell and his Fed cronies are "all over" the inflation problem with their massive quarter-point hike in the Fed Funds rate this week.
Not only is the 4.5 billion year-old Earth suddenly "melting," but gullible voters will keep electing politicians who push this unscientific nonsense.
Whew. That's a lot of air quotes. But it is 2022, and gullibility is all the rage, and the Nasdaq is flying this week. This is a quadruple-witching Friday, so the computers are in control, but humans will have to begin making investment decisions once again Monday.
So, you can either believe in a future of self-driving cars -- they may happen someday, but certainly not without a system for Light Detection and Ranging, or Lidar, which Tesla (TSLA) has never offered -- electric airplanes and some weird thing called the Metaverse. In that world, we hope, internet users are not subjected to the hate speech, promotion of terrorism and selective censorship that dominates Facebook (FB) and Twitter (TWTR) , but who knows.
It's really that simple, and it explains the extraordinary performance of my HOAX portfolio in the past 12 weeks, especially vs. its benchmark, Cathie Wood's Ark Innovation fund (ARKK) . HOAX has risen 29.8% since its inception date, while ARKK has fallen 33.7% in that time period
The key is that every one of the hydrocarbon names in HOAX pays a dividend, and none of Wood's portfolio of hopium names does. Why? Because it's not cool in the Valley? Apple (AAPL) pays a dividend, as does Microsoft (MSFT) .
No, it's because these companies don't generate cash flow sufficient enough to reward shareholders and grow their business. Or, in the case of Twitter, they don't generate any cash at all, as the company's cash flow return on assets has been negative for seven consecutive quarters.
So, I choose the live in the present, and to presently reward my investors from cash flows from the companies we own. While some investors choose to reside in some dystopian, "Blade Runner"-style future, in my world, humans are killing each other, not the planet, and the insane "green" strategies of its leaders, especially in Europe, serve to enrich the lunatic who is doing the killing.
So, it's bigger than dollars and cents. It's about avoiding Putin's rubles and applying common sense. The companies in HOAX have never killed anyone. To create an apocalyptic mythology to try and guilt people into avoiding investing in them is the height of stupidity.
I drew a line in the sand. I just said I am not going to participate in this lunatic groupthink that has gripped the investment world and, dammit, that sand line has increased 30% in less than a quarter.
That's real money for readers of Real Money and it is based on real common sense. To recap, here are the 10 names in HOAX:
Exxon Mobil (XOM)
Antero Midstream (AM)
Arch Resources (ARCH)
Peabody Energy (BTU)
Suburban Propane Partners (SPH)
Cheniere Energy (LNG)
Flex LNG (FLNG)
Tsakos Energy Navigation Series F (TNP/PRF)
The coal names have been bonkers, and I probably wouldn't buy Arch and Peabody at current levels, but I am actively reinvesting clients' divided payments into the other eight names. Antero Midstream is the safest of that cohort, and its 8.9% yield is not only incredibly attractive, but also incredibly safe based on the cash flows that AM generates. AM's revenues come, for the most part, from transporting natural gas produced by its corporate cousin Antero Resources. Where is the risk? There is none.
That's real. Reality is what makes HOAX so safe, not some kind of 1930s-style aggression from a madman. But that madman still has a Twitter account. Do you?