• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing

The Only Stocks to Buy Now Are Energy Stocks

What's not to like about US Tech stocks? Everything. Deal with it.
By JIM COLLINS
Sep 09, 2022 | 01:15 PM EDT
Stocks quotes in this article: AAPL, XOM, ARKK, BTU, TSLA

And you misinterpret this how? That nugget of wisdom was uttered by Jerry Seinfeld to George Costanza in the 13th episode of Season Eight of Seinfeld. It really sums up this week's market action. I just don't see how anyone could possibly take recent economic developments, positively, but, hey, I don't watch much FinTV.

It's just a vast conspiracy out there to get people to think things are okay with the global economy, and therefore somehow stocks are attractive. They're not. By any measure. With one exception: energy stocks. As oil prices jump in today's trading, we are revisiting - like Jerry and George (in a different episode) going back to their favorite pizza place to play Frogger - the existential truth that has made my HOAX portfolio strategy such a winner.

ESG-mania has produced an environment in which a massive hoax - that the planet is melting - is used to excuse the overvaluation of companies that burn cash at the expense of companies that produce it. It's not just energy, as Apple (AAPL) produces copious amounts of free cash flow, pays a dividend and buys back stock. So does Exxon (XOM) . Why on earth are you invested in companies that don't?

The proof is in the returns. So, HOAX - including reinvestment (trades only available to my subscribers) has posted the flowing performance versus its benchmark since inception on 12/23/2021

HOAX +47.1%

(ARKK) -55.4%

The score: Jim: 1, Cathie: 0.

And that is all that matters. Because cash flow is all that matters. But there is such a parade of nitwits in the financial media telling you otherwise. I have been overwhelmed by the incredible response to my spreadsheets as Real Money features the links to them, with thousands of share requests.

As those share requests turn into subscriptions to my other products, I am momentarily overwhelmed by my offer to REPAY subscriptions to other newsletter publishers. That's right, I am throwing my 2022 down the drain, just to build my base. In the short term that sucks, but the positive feedback from satisfied customers makes it all worthwhile.

Smart people read Real Money and with bright lights like the Rev Shark, Peter Tchir and Chris Versace contributing to the platform, I can say that smart people write for Real Money as well.

2022 has been the year of real defeating fantasy. Feel free to try and obfuscate about the future - ARK Invest actually just retitled their Head of Research as Chief Futurist... I couldn't possibly make that up - and excuse performance. Peabody Coal (BTU) is up 103.9% year-to-date, Tesla (TSLA) is down 25.6%.

And if anyone (whose newsletter subscription I have not yet refunded) is telling you "Oh, don't worry about underperformance, investing is long-term," then you have my permission to ignore that person. We are in the mid-part of September and approaching the nine month anniversary of HOAX. That is enough time to make judgements as it's a valid sample size.

The World Has Turned Because Money Is No Longer Free

Even the ECB removed its final 0% lending facility yesterday. The game has changed. The 12-month UST is yielding 3.58% as of this writing. In contrast, according to multpl.com, the S&P 500 is yielding 1.58%, and the Nasdaq yields less than half of that.

Not to get into CAPM or the equity risk premium or all those nerdy CFA constructs, but the cost of capital is higher now, so your returns need to be higher to reflect the greater opportunity cost of holding equities. That's why - for my asset management clients, my readers, my subscribers, anyone unfortunate enough to occupy the barstool next to mine - I continue to preach the wisdom of income investing.

Every long-only portfolio I have ever created is yielding much more than the 3.58% yield of the 12-month UST. We have a cushion, even if it is marginally reduced. But if you buy Cathie Wood's leaky ARKK, you have no cushion. You are entirely dependent on what other people will pay for those assets, and usually negative, cash flows.

That's not how I roll. Bear market bounces come and go, but I called this bear market (I referred to it as Tech Bubble 2.0 in my Real Money column of February 18th, 2022) and I have yet to see any indications that we are inflecting. Interest rates are rising, the global economy is slowing, and so what's not to like about US Tech stocks? Everything. Deal with it.

Excuse one final Seinfeld reference, but the only way to find serenity now is to invest in securities that pay you for the privilege of doing so. It feels good. 

(Apple is a holding in the Action Alerts PLUS member club. Want to be alerted before AAP buys or sells AAPL? Learn more now.)

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Jim Collins' firm owned BTU and XOM, and owned puts on TSLA.

TAGS: Economy | Investing | Stocks | Trading | Energy

More from Investing

The Bears Just Moved Into Wall Street

James "Rev Shark" DePorre
Sep 22, 2023 4:26 PM EDT

Technically, the bears are in control of this market now.

3 Overlooked Mid-Cap Stocks With High Dividend Yields

Bob Ciura
Sep 22, 2023 3:00 PM EDT

There are strong dividend stocks in this 'middle' category worthy of consideration for income investors.

Don't Be a Sap and Step Into a Value Trap

Bret Jensen
Sep 22, 2023 12:30 PM EDT

There are plenty of stocks that look like value plays but aren't as the market continues to drag more share prices down.

My Stock Pick for the Rest of 2023? The Big 'B'

Stephen Guilfoyle
Sep 22, 2023 11:17 AM EDT

Here's why I'm going with a diversified value name.

IBM Knocks on the Door of Its 52-Week High, But Nobody Answers

Bruce Kamich
Sep 22, 2023 10:45 AM EDT

Let's drill down to see the risk/reward conditions of the stock and why it may no longer be a 'Best Idea.'

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:20 PM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Trading in Multiple Time Frames
  • 10:24 AM EDT BRUCE KAMICH

    This Could Get Messy

    A number of key stocks are getting close to import...
  • 01:41 PM EDT CHRIS VERSACE

    Latest AAP Podcast With Helene Meisler!

    Listen in as the Action Alerts PLUS podcast talks ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2023 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login