From Beng L.: I dare you to publish this in your Palm Beach Daily…
I paid big bucks for the Wealth Builders Club and still can’t log in after five-plus attempts at resolution with customer service—getting at least one “standard response” email every day for the past two days, instead of a resolution!
Now, if PBRG can’t even get a login problem fixed, it makes one wonder, doesn’t it? On the other hand, when it comes to “soliciting,” you guys are simply incessant!
Reeves’ Comment: Beng, we’re sorry for the trouble. Please refer to the item above by our Quality Assurance Manager Amanda Carden. It should solve your problem and give you further options for assistance if needed.
From Denise W.: Teeka, if electric utilities are broke like you say, shouldn’t regulators be told? They can’t just let the lights go out if the utilities go broke.
How bad is it really?
Teeka’s Response: This is a great question because it gives me a chance to clarify my stance on utilities. A utility by itself is not a bad business. It all depends upon the utilities’ debt structure.
If they owe a lot of expensive debt that is due to be repaid over the short term, that makes them vulnerable to a rise in short-term interest rates. Unless they are highly indebted, it won’t necessarily put them out of business… but it could threaten the utilities’ dividend payment. And that would hurt some income investors.
So you could see a dividend cut or the elimination of dividend raises. This is a big problem because utility stocks are valued for their dividend. If you remove, cut, or curtail the dividend of a utility stock, the stock price will go down aggressively.
So, when looking at utilities in Mega Trends, I’ve focused on companies that have the following traits:
1. Utilities that have no need to fund a significant portion of their debt for at least 10 years
2. Utilities that have other businesses that provide enough cash flow to cover the dividend comfortably
3. Utilities that would pay less in borrowing costs on their short-term debt even if interest rates increased by 50% tomorrow.
These rules have given me the ability to carve out some potentially lucrative exemptions in the utility space.
Thanks for the great question! All the best to you and your family.