6MCF=1BOE

[6MCF=1BOE @6mcf_1boe]

@cap_zay Link to podcast?

[6MCF=1BOE @6mcf_1boe]

@JesseJenkins Actually people prefer living next to gas than most other power sources

[6MCF=1BOE @6mcf_1boe]

@JigarShahDC I mean it’s the same for renewables, they’ve signed countless more renewable PPAs and will be forced to pay for all that power even if AI demand doesn’t show up, renewables also likely to produce more in zero price hours so those contracts potentially even more underwater

[6MCF=1BOE @6mcf_1boe]

@moneyfetishist This is super helpful, thank you so much!!!

[fj @fjzeit]

@PeterDiamandis over 25 years ago we gave almost every human on earth instant access to almost all human knowledge, and the ability for rapid collaboration. the only thing that stuck amongst the masses was 15 second videos of people doing the same dance routine to the same music.

[6MCF=1BOE @6mcf_1boe]

@FundamentEdge Will it be possible to buy that manual?

[6MCF=1BOE @6mcf_1boe]

@christiantfong @forrest_f_ no worries at all man, I've learned a lot from your posts so wanted to chime in when the topic (ROE) covered something I am somewhat informed about haha

[6MCF=1BOE @6mcf_1boe]

@christiantfong YTM is literally the coupon rate for an investor buying the hybrids today. Coupon rates are normally outdated due to changes in market since time of issuance where as YTM represents current market view of risk-adj. return

[6MCF=1BOE @6mcf_1boe]

@christiantfong Puget has a 50% equity ratio so in-line with most utilities

[6MCF=1BOE @6mcf_1boe]

@christiantfong @forrest_f_ well hybrids are a market view of cost of an instrument in between debt and equity that looks more like debt so if market is pricing in a ~7.2% YTM then we can say with high certainty that cost of equity would be higher than that probably by ~150 bps

[6MCF=1BOE @6mcf_1boe]

@christiantfong Puget hybrids currently at YTM of 7.2%, and hybrids look more like Debt then equity so would think equity cost of capital relative to hybrids would be +150 bps

[6MCF=1BOE @6mcf_1boe]

@christiantfong Again I’d lean to your comments where your math says COE should be 7.5% but that is where hybrids for mid cap utilities currently trade at, implying that true COW would be above that and ironically around where ROE set today

[6MCF=1BOE @6mcf_1boe]

@Kevin_AGraham Thanks man did not see the Pembina Saturn name so was a bit confused but checks out

[6MCF=1BOE @6mcf_1boe]

@christiantfong Also targeting M/B =1 implicitly means that you’re targeting that utility create now equity value, stocks trading at 1x book means that value creation has been zero relative to capital invested, feels nuts to expect that from publicly listed stocks, create no value for investors

[6MCF=1BOE @6mcf_1boe]

@christiantfong This feels very wrong, for example Puget emergy hybrids trade at 7.2% YTM, so a 7.5% cost of equity for an average utility would be unrealistic when market pricing the hybrid debt of a mid cap vertically integrated utility at 7.5%

[Jane Flegal @JaneAFlegal]

This is a very good piece on utilities and ROE: https://t.co/x0ncYwDgs7

[6MCF=1BOE @6mcf_1boe]

@ShanuMathew93 @GavinSBaker Shanu do you mind elaborating on this point, not super familiar with CDS so hoping to learn more and underhand its use as a signal for credit risk

[6MCF=1BOE @6mcf_1boe]

@malinvested @SouthernValue95 @realKunalAShah Better said than me haha