Hey There Income Hunter,
Well, it appears we found one politician who can’t make money trading.
How about the Biden report stating the administration is willing to pay $80 for oil today …
But Democrats passed on buying it at $24 when Trump proposed building reserves at that price.
You know what’s going to happen next is the price will go to $120 just when they need to restock.
The energy companies rallied yesterday with Energy Select Sector SPDR Fund (Ticker: XLE) +2.8%, nat gas futures +10% and US Natural Gas Fund, LP (Ticker: UNG) +8%.
Energy continues to be the hot sector … and it has a long way to go after the sharp correction we have seen over the past couple of months.
Today we’ll take a look at radical moves Europe announced that may end up adding fuel to the energy crisis.
Windfall
Europe has proposed a $25 billion windfall tax on oil and gas producers to help offset the energy crisis
– One-off tax to target surplus oil, gas and coal profits in 2022
– Minimum excess tax rate of 33% proposed
– EU oil industry flags concerns over the tax calculation
So, let’s put this in perspective.
Europe needs companies to invest, service and expand production. However, they will take all the investment money from them so they are unable to expand production.
Sounds like a well thought out plan!
How about this one …
German gas importer Uniper is in nationalization talks with the German government. This is what can happen when you are at the mercy of an unfriendly nation for your energy needs …
The US Is the Big Winner
We may have our internal conflicts and division in government, but at least we are self-reliant.
Throughout it all, the private sector of the US has built a foundation for energy and food that is the most solid in the world.
Once we can get through the transition to a new monetary system and we can hit the restart button for our economy, no one will be able to compete with us.
That is why now is the time to invest in solid energy companies that are already very profitable and are part of a network that can build the entire supply chain within US borders.
That is our advantage.
Here is a good way to play it …
Alerian MLP ETF (AMLP)
AMLP provides a great vehicle for investing in Master Limited Partnerships (MLPs) …
AMLP-s holdings include some of the highest-quality energy infrastructure companies in the US …
It has over $6 billion in assets and yields a 7% dividend, with risk diversified across 15 companies, including:
AMLP has outperformed the markets this year and I think they can continue to provide investors with capital appreciation and investment income for years to come.
As you can see in the chart below, AMLP recently broke a long-term downtrend and is poised to break out to new highs.
Notice the recent 50/200 cross, which provides excellent support below. The ETF has very liquid options and can be a great trading vehicle around a core position.
Bring It Home
The stocks held in the ETF are profitable solid companies that will survive any further decline in the price of oil and gas.
We are likely to see significantly higher oil and gas prices for an extended period of time.
Frank Gregory, Andrew Giovanazi and I will share thoughts on the Washington, Treasury and Fed policies that will impact the markets as we head into the mid-terms and beyond.
Plus, you’ll receive a special report on the energy crisis just for registering
I look forward to seeing you, and until then …
Live and Trade With Passion My Friend,
Griff