Tag Archives: Southwest Showcase

Drink from a Fire Hydrant of CEO’s and Company Executives – Friday

We were happy to receive our invitation to a local gathering co-sponsored by the CFA Organization (Chartered Financial Analyst) – an organization that I was president of a few years ago and maintain contacts and membership.

Wednesday and Thursday of this week, in rapid fire form, over 100 CEO’s and C level executives from all over the country, presented their company to groups of folks for a better understanding and possible investment.img_5476

We cherish this event every year, as it gives us a great candid feel for what’s going on in the economy and we get to meet a wide variety managers in different industries…..

So here’s a quick review:

 

The energy companies that we sat in on where mellow, but longer-term positive,  and much discussion about lower debt, and future higher prices, with lots of hedging as topics. Overall the energy executives felt good long-term but we’re less certain in the very shorter term. Cautiously positive, but managing very well.

Listening to a insurance company that deals with high risk properties – high risk because they’re on one of the eastern shores that is the recipient of bad weather, tactics for maximizing revenues, without passing higher expenses on to their customers, due to inelastic customers, were the topic as well as  fingers crossed for no major bad weather.

The first days keynote speaker for lunch was fantastic:img_5467

“How Government Policy Drives Stock Market Returns” was the title of his presentation.

His conclusion, Politics affect Capital Markets but it’s not sustaining,  what truly affects Capital Markets longer term is policy. We could not agree more … when new rules are instituted, that’s when talk becomes action and you have a definitive line in the sand.

Maybe something we should all remember as we enter a Presidential Election in the coming year!

On Thursday a delightful visit with the CEO of a local steel company, her thoughts on policies, tariffs which surprisingly were somewhat muted. Tariffs did not seem to bother her, but a recession would not be welcomed. Cyclical concerns in a very cyclical industry and defense of such cycles were very well presented.

The lunch speaker of the second day was also very interesting and had two main points:

Jerome Powell and China

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This chart was interesting and may make future discussions, the gist is that when rates have been lowered while an inverted yield curve occurs, it deters the recession… the recession occurs when raising DURING the inversion ….. Hmmmmm ….first time we have heard this, but it peaked our interest….

Regarding China… In a nutshell he felt like China would agree to a multiple part Tariff contract and this was someway a necessity due to China’s current economic situation, and also most politicians stance against China and their tariffs, offering no option for relief.

In conclusion, from a very high-level, everyone was well aware that this economy is not growing extremely fast, but it’s still growing. Many shared our thoughts that we may have a soft recession but a very hard recession is likely not in the cards. Very few touch the political landscape and for the most part we’re generally positive.

Ahhhh…. a HEAVY Friday for you huh ?

Apologies, but we have a short week next week and wanted to get this to you as we know you were hanging on the edge of your chair waiting…. HAHA … kidding of course, recall this is a working Diary for us as well….

Have a Great “Executive Updated” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

A Positive, but Pausing, Theme Has Been Formed – Company Blast Update

In our last post I mentioned that in addition to learning about new companies and meeting various managers, I would keep a watchful eye for a theme that might shed light on the US Economy.  After a looooong first day, reviewing my multiple pages of company notes, comments, key phrases, and forecasts, I feel comfortable with the delivery of a theme that emerged, even with another day to go.  

Company managers have the thirst, confidence, and ability to grow, but they are starved for capital. Said another way “Getting access to capital is still not easy!” While many of the companies I visited with were small, even the multi-billion dollar company managers mentioned capital is still not moving freely.   

Here is our opinion on this matter:

  • It is frustrating that capital is not moving freely YET.
  • Proving the horse to water, but not drink fable, no matter what pressures government officials put on the banking system, they will begin moving when they are ready.
  • When capital does begin moving, (imagine the first dance finally happens at the prom), a cascade of confidence and movement may begin.
  • Tossing our banker hat on, new rules (Dodd Frank) and recent bad experiences are natural inhibitors to money flow, we can’t blame them for being cautious. 

Lastly, as mentioned yesterday, former Fed Reserve Board Member, Robert McTeer was the lunch guest, and spoke for an extended period of time (actually well over his alloted time.)  After scribbling multiple pages of notes, I will leave you with one teaser comment, “Like a Coiled Spring” and save the remainder of my comments for our Zig of positives tomorrow.

Bottom line, a positive feeling from most managers which bodes well for us as investors! Now, back to work, I will duck back into meetings for the duration of the day!

Have a Great One!

JK

214-706-4300

PS  A special Happy Seventh Birthday to my daughter Sophia, today!