To the Editor:
Although energy pipelines were mentioned in this article, I think the more traditional energy-sector companies are a safer high-yield area of the market (“Best Income Investments for 2022,” Cover Story, Dec. 29). The energy giants will continue to reap the benefits of an undersupplied oil market, while also transforming to the more environmentally conscious companies of the future. Oil has an important role in the continuing development of Western societies and the development of emerging markets. The drastic divestment and regulation of the Western oil industry has shown its consequences in the European energy crisis early in 2021. This crisis will probably be revived if Russian tensions increase. The Energy Select Sector SPDR exchange-traded fund currently yields 4% and offers broad exposure to the energy sector.
Demetrius Pyo, Pittsburgh
To the Editor:
As someone who has researched, reviewed, and invested in energy infrastructure for many years, I offer suggestions regarding “energy pipelines.”
First, since crude oil, on the one hand, and natural gas and its derivatives, on the other, differ greatly in function and in their economic futures, it would be helpful to indicate which commodity is prevalent in the operation of the entities named in the article.
For example, Williams Cos. is natural-gas oriented, and Magellan Midstream Partners is crude-oil oriented. Natural gas needs gathering and processing, compression, and, if it is rich gas, fractionation, all of which are midstream functions. These functions are provided by the midstream energy infrastructure companies, which the article refers to as pipelines.
There are two midstream natural-gas-oriented infrastructure companies that are fiscally solid and yield about 9.5%. Both are undertaking meaningful transactions that will close in the first quarter of 2022. One is the acquisition by Crestwood Energy Partners of Oasis Midstream Partners, which will greatly enhance Crestwood’s posture as a dominant midstream natural-gas-oriented infrastructure partnership in the Bakken/Williston basins. The other is the transaction between Altus Midstream and the parent of Blackstone Energy Partners and I Squared Capital–owned EagleClaw Midstream, which will create the largest midstream company in the Delaware Basin and the third-largest in the Permian Basin.
Elliot Miller, Naples, Fla.
The Great Resignation
To the Editor:
Your interview with professor Anthony Klotz of Texas A&M was very insightful (“Covid Drove Workers to Quit. Here’s Why From the Person Who Saw It Coming,” Dec. 30). He hits on some great points, but missed on a couple of key ones. What about the benefits to both employees and employers of collaboration and teamwork that are fostered by being in the office? Also, who is going to run all of these virtual organizations as the workforce continues to age and shrink? It’s pretty hard to learn the necessary skills/lessons or get noticed if you’re working from home in your pajamas. If you’re a millennial or Gen Zer and aspire to lead, get dressed and go to the office.
Mike Flaherty, Naples, Fla.
Graham Buybacks
To the Editor:
Andrew Bary presents an excellent case for the undervaluation of Graham Holdings (“This Mini Berkshire Hathaway Flies Under the Radar. And Its Stock Is Cheap,” Dec. 30). However, I disagree with his suggestion that stock buybacks should be given a higher priority than purchasing additional businesses. Presumably, Graham’s recent acquisitions of a consumer internet company and a Virginia Ford dealership represent opportunities for the company to earn an expected rate of return on invested capital that exceeds its cost of capital. These acquisitions would then be expected to add to shareholder value. A company should buy back its shares only when value-enhancing investments are unavailable and its shares are trading below intrinsic value. This is the same approach being followed by its role model, Warren Buffett’s Berkshire Hathaway.
David I. Kass, University of Maryland, College Park, Md.
New Chips
To the Editor:
Micron Technology looks like it might be working with Taiwan Semiconductor and possibly Google on new types of artificial-intelligence/machine-learning chips that use inference and layering for in-memory computing to achieve some staggering results (“Chip Stocks Are Booming. Where to Find Bargains Now,” Dec. 27). Applied Materials will provide some of the equipment. If this takes place, it will be a game-changing advance in AI/ML.
Arthur Hansom, on Barrons.com
Sunshine State
To the Editor:
Florida is a great state with low taxes and great people in business and government (“Everyone Is Moving to Florida. What That Means for Financial Advisors and Their Clients,” Dec. 30). Florida’s low taxes, limited government regulation, and excellent university system is the formula driving business to the state. I think that it will continue to thrive at the expense of other states and that Raymond James Financial is an interesting way to play the strong growth in Florida’s financial services.
Sonya March, on Barrons.com
To the Editor:
My wife is a medical professional. We lived in a fine New England state with many good medical schools. The problem is that the state population is not growing and competition for positions is high. Our move to Florida was made mostly because of the many medical jobs in the state. I like the warm climate, but housing costs are high in urban areas.
George Piazza, on Barrons.com
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