Family Offices -- A Family Proposal -- May 8, 2023

For the archives.

Locator: 10001FAMARCH.

Family offices to keep investing. Link here. 

At a time when many investors are pulling back, family offices are moving into “risk on” mode, with plans to buy more stocks and alternative investments this year.

Nearly half (48%) of family offices plan to purchase stocks this year, according to the Goldman 2023 Family Office Investment Insight Report. The report, based on a survey of 166 family offices around the world with at least $500 million in assets, also found that family offices plan to put their large cash piles to work as inflation, rising rates and falling stocks create new opportunities.

“Family offices, for the most part, are really risk-on for the next 12 months,” said Meena Flynn, co-head of Global Private Wealth Management at Goldman. “They can ‘zig’ while others ‘zag.’ And they really try to prepare in terms of how they allocate their assets to be able to do that.”

I'll have to talk to my youngest sister about setting up our own "family office." I think we can do it for a lot less than wiki and Yahoo!Finance suggest. I'm thinking maybe $1,000 for the whole syndicate -- mostly to pay for arranging fishing trips.

Link here.

A family office is a privately held company that handles investment management and wealth management for a wealthy family, generally one with at least $50-$100 million in investable assets, with the goal being to effectively grow and transfer wealth across generations. The company's financial capital is the family's own wealth. Family offices also may handle tasks such as managing household staff, making travel arrangements, property management, day-to-day accounting and payroll activities, management of legal affairs, family management services, family governance, financial and investor education, coordination of philanthropy and private foundations, and succession planning. A family office can cost over $1 million a year to operate, so the family's net worth usually exceeds $50-$100 million in investable assets. Some family offices accept investments from people who are not members of the owning family.

Some firms that cater to multiple clients offer personality psychology services for family members to support better alignment and communications among members of the family. 

A family office either is, or operates just like, a corporation or limited liability company, with officers and a support staff. Officers are compensated per their arrangement with the family, usually with incentives based on the profits or capital gains generated by the office. Family offices are often built around core assets that are professionally managed. As profits are created, assets are deployed into investments. Family offices might invest in private equity, venture capital opportunities, hedge funds, and commercial real estate. Many family offices turn to hedge funds for alignment of interest based on risk and return assessment goals. Some family offices remain passive and just allocate funds to outside managers.

Proposed graphic:

Monday -- If I Get Around To It -- May 8, 2023

Locator: 44595ECON.

I don't know if I will get to any of these stories on the blog today, but these are the four stories that interest me most today:

The German recession, and cost of electricity.

AAPL and regional banks.

T and DIS and writers' strike.

Fracking, US oil production, days supply.  

Politics: polling on Biden. Does this change anything? 

BUD: "Houston, we have a problem." Tone-deaf and misunderstanding what this is all about.

• the damage was already done when the photo was releases, April 12/13, 2023
• the CEO's handling of the problem made it a thousand times worse
• we'll see that story reported in mainstream media sooner than later

If nothing else, I will provide the links later and let folks connect the dots themselves for all the stories above.

Miscellaneous:

• WTI: up 2.19%; up $.156; trading at $72.90.
• great day for DVN to post earnings
• DVN: up 1.33%; up 67 cents; trading at $51.04
• Gold: just shy of $2,000

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Beautiful, Beautiful Day On The Balcony

The wind has died down; the sun is now hidden by sparse clouds / clearing sky which makes the northeast-facing balcony so much more pleasurable. Now, thunder in the distance, far to the north/northwest.

I get my best blogging done at Starbucks but I elected to stay home this a.m. Prices are just too expensive at restaurants these days, not just Starbucks. I will spend the same amount but go less often.

I have come closer and closer to perfecting my waffles. And, yes, that was due to the Aunt Jemima

Of all things, my first thoughts went back to the summer of '71 when I met the first love of my life, when I worked in Westfield, New Jersey; and then, again, when we spent more time together during the summer of '73 and shared the experience of Secretariat's record-breaking Kentucky Derby win.

It's funny how the mind works. Perhaps the most important / memorable event that I watched this weekend -- even more so than the coronation and BRK's annual meeting -- was the Kentucky Derby Saturday evening. In the big scheme of things, the KD no longer interests me but perhaps the association with Linda had a subliminal and sublime effect. 

And when the KD was over Saturday night I forgot all about it. Until perhaps this morning before I thought of Westfield which then led me to that '73 KD. 

By the way, on a different note, my first choice in sandwich bread has increased from $1.29 to $1.89 a loaf in a matter of months, it seems. I generally have two slices per day, a really, really great egg sandwich or an equally great grilled cheese sandwich. But I'm betting I would enjoy a one-slice sandwich even better than a two-slice sandwich.

And, speaking of which, when my wife makes chicken and rice -- which again, we absolutely enjoy as a small side dish -- there is way too much chicken. We can easily cut back on chicken by half (or even more) and I will enjoy it even more.

90-second-brand-name rice must have very high margins. Now that I've switched from potatoes to rice (this will last for a year or so, the potato-to-rice switch) I've now gotten a rice cooker to replace the one we threw out years ago. 

So, yeah, the high cost of groceries has a silver lining. Speaking of which, I seldom buy potato chips any more simply because they are way too expensive.

By the way, back to KD and sports. I watched a little -- very, very little -- of the PGA golf tournament this weekend. The leader board -- with the exception of one golfer -- interested me not. 

And I watched no NASAR racing at all -- neither Saturday nor Sunday. I suppose it had more to do with being at the pool with Sophia than anything else.

Well, we're getting a good soaking now -- very steady, straight-down rain. I'm under the pavilion at the pool so the rain doesn't bother me. It will end within the hour and then no more rain forecast for the day; the high is forecast to be 87°F at 4:00 p.m. esta tarde. The rain appears to have already quit.

Best Headline Of The Day -- May 8, 2023

Locator: 44594AAPL.

Best headline of the day: note -- the story came out at samee time as AAPL released earnings, last Friday.

Link here.

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BRK

Biggest story of the day: Geico's quick turnaround. Yes, I was surprised when I saw that over the weekend. Very surprised. BRK.B was up $3.88 at the close, Friday. This morning, BRK up $3.25 in pre-market trading.

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DIS

A lot of folks must not read the news.

DIS closed up nicely on Friday and is up again in pre-market trading.

Some see the writer's strike spreading, and lasting longer than expected.

Taking It Literally -- Leaving Their Hearts In San Francisco -- May 8, 2023

Locator: 44593SF.

Link here.

See how bad it is -- "do" a street view on Google maps, going down Market Street in San Francisco. I was shocked. This will come up again in a later blog.

For A Monday, This Is A Pleasant Surprise: WTI Up Almost 3%; Up Over $2 -- Trading At $73.38 -- May 8, 2023

Locator: 44592B.

DVN:

• at market open: up 2%;
• after-hours. Forecast: $1.38.

RIDE:

• a loss off 71 cents; misses by 51 cents;
  
• "embattled Lordstown Motors expected to end production of its EV pickup" 
• rating moved "suspended" at GS
  
• at market open: up 1 cent; uup 3%
  
• one day ago: Lordstown Motors founder sold off more stock
• Benzinga: Tesla done with price cuts; Lordstorn Endurance to drive into oblivion; Fisker Ocean makes waves; more here;

LCID:

• pending
• forecast:
• at market open: down 3%; down 26 cents;
  

PLUG:

• pending
• forecast: a loss of 26 cents
• wow, talk about a stock that gets a lot of attention; 
• traded over $63/share back in January/February, 2021; then fell; volatile
• now at $9 / share
• Motley Fool compares PLUG with XOM for long term investment 
• at market open: down 0.4%; down 1 cent;
  

Tyson: down almost 10% in pre-market trading;

• at market open: down 13%; down $7.76; trading at $53.
  
• Barron's: stock is tumbling; surprise loss is only one reason why
• AP Finance: 2Q23 earnings.
• earnings: a loss of almost $100 million; equates to 28 cents per share; adjusted: a loss of 4 cents per shar;
• forecast: earnings of 81 cents per share
• revenue:
• $13.13 billion vs $13.6 billion forecast
• it will be interesting to see how analysts got this one so wrong

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Back to the Bakken

Active rigs: 39.

Peter Zeihan newsletter.

WTI: $73.38.

Natural gas: $2.194.

Tuesday, May 9, 2023: 11 for the month; 63 for the quarter, 318 for the year
None.

Monday, May 8, 2023: 11 for the month; 63 for the quarter, 318 for the year 
None.

Sunday, May 7, 2023: 11 for the month; 63 for the quarter, 318 for the year
31210, conf, BR, Gladstone 8-1-13MBH,

Saturday, May 6, 2023: 10 for the month; 62 for the quarter, 317 for the year
None.

RBN Energy: Partners in clean ammonia projects eye billions in federal tax incentives, part 3.

Clean ammonia, produced by reacting either “blue” or “green” hydrogen with nitrogen, is emerging as one of the most highly touted low-carbon energy sources of the future, thanks largely to massive tax incentives provided by the Inflation Reduction Act (IRA). Skeptics may question the extent to which clean ammonia — and clean hydrogen, on which it’s based — can realistically take market share from natural gas and coal as leading power-plant fuels over the next 20 to 30 years, but there’s a lot to be said for them and, as wind- and solar-power developers have already come to appreciate, billions of dollars in governmental support can do wonders. In today’s RBN blog, we continue our look at the growing list of U.S. clean ammonia projects now under development.

This is the third episode in our clean ammonia blog series. In Part 1, we said that all the talk about the potential for clean ammonia is finally morphing into the reality of clean ammonia project announcements, engineering-procurement-construction (EPC) contracts and final investment decisions (FIDs). There are two primary drivers behind the shift from talk to action: (1) the supercharged tax credits for carbon capture and sequestration (CCS) in the IRA and (2) the expanding efforts by power generators in Japan and South Korea in particular to make clean ammonia an important part of their fuel mix going forward. A third impetus is growing interest by global shippers, who see clean ammonia — and the clean hydrogen packed in each molecule — as a low-carbon bunker fuel worth pursuing.

In Part 2, we discussed five of the 10 big-dollar ammonia projects being planned in the Lower 48, namely OCI’s 1.1-million-ton-per-annum (MMtpa) project in Beaumont, TX (scheduled to begin commercial operation in 2025); Air Products & Chemicals’ clean-hydrogen/clean-ammonia megaproject in Ascension Parish, LA (online in 2026); Adams Fork Energy’s project in West Virginia (the only one not sited along the Texas-Louisiana coast), which is planning a 2026-27 startup; Nutrien’s proposed 1.2-MMtpa clean ammonia facility in Geismar, LA (targeting a 2027 online date); and Ascension Clean Energy’s (ACE) potentially gargantuan project — up to 7.1 MMtpa of ammonia production — in Donaldson, LA, which could start up as soon as late 2027.