Dear client or friend of Vailshire Partners LP,

Greetings from Colorado Springs! I hope this quarterly memo finds you well.

The State of the Economy

The health of the President, his administration, and the economy are at the forefront of our nation’s mind as we approach election Tuesday in early November. As uncertainty about election results and coronavirus containment/immunity persists, so does market volatility.

September and October are historically difficult (read: down) months for US equities and Bitcoin during election years, and this has again proven true in 2020.

Thankfully, the historical returns for both equities and Bitcoin once presidential election results are known are generally quite positive… sometimes surprisingly so! And for this, we are positioning Vailshire Partners LP accordingly.

For now, a Congressionally-approved fiscal stimulus looks increasingly unlikely, given the partisan bickering and game theory. My opinion is that if additional money is to be printed out of thin air, then the least our government can do is put it directly in the hands of Americans, many of whom are suffering greatly from the Covid-related business closures and Depression-level increased unemployment.

The Federal Reserve continues to “do its part” by maintaining ever-increasing supplies of money and securities (such as US Treasuries and other fixed income ETFs), as shown by the following charts:

M2 Money Stock (as of 21-September-2020)

Federal Reserve Bank Credit (as of 1-October-2020)

Federal Reserve: US Treasury Securities Held Outright (as of 1-October-2020)

Where Congressional fiscal policy is lacking, the Fed’s monetary policy is undeniably trying hard to pick up the slack!

Tumultuous times call for deft asset allocation and management. With this in mind, let’s see how Vailshire Partners LP has performed in 2020 relative to its peers.

Vailshire Partners LP Annual and Quarterly Performance

*(Starting date: 27-January-2014)

As the chart reveals, through 30-September-2020, Vailshire

A report said Goldman Sachs Group  (GS) – Get Report will name fewer new partners this year than any time since the investment bank went public in 1999.

Goldman shares recently traded at $205.37, up 1.77%, and have slumped 10% year to date. The stock has risen 10% since Sept. 23.

After earning the reputation as perhaps the strongest financial institution in the nation, Goldman has stumbled since the financial crisis of 2008. It has been done in by a difficult environment for banks and by its own missteps.

As for Goldman’s new partners, the number may slide below 60 this year from 84 in 2016, a source told Bloomberg.

Goldman plans to trim about 1% of its employees, or about 400 jobs, sources told Bloomberg last week.

Morningstar analyst Michael Wong has a positive view of Goldman Sachs beyond the immediate future.

“Given our forecast, we assess that Goldman Sachs should trade at or higher than book value,” he wrote in an August commentary.

“While the market is unlikely to give the company much credit for its new initiatives in the near term, we believe the company has already shown positive changes in its business mix and that the market will eventually value the company much higher than it had been over the previous several years.”

Wong likes Goldman Sachs’ investment management unit. “Investment management is a relatively stable, high-return-on-capital business that is well suited to the current regulatory environment,” he said.

Wong puts fair value at $239 for shares of Goldman Sachs.

Source Article

In a filing, Lyft (LYFT +0.7%) reveals expanding its insurance carrier partnerships to include Allstate, Liberty Mutual, and CSAA subsidiary Mobilitas.

Lyft plans to continue working with Progressive, AXA-XI, and Constitution State Services, which is Travelers’ third-party administrator.

The ride-hail company expects the changes to reduce potential volatility in its insurance costs for the policy year ending on September 30, 2021.

Lyft requires drivers to have personal auto insurance that meets the minimum state requirements, but notes that not all personal policies will cover accidents that happen while driving for the company.

For cases where personal coverage doesn’t apply, Lyft offers third-party liability coverage through its partner network.

Source Article

Co-produced with Long Player

The midstream sector is full of challenges, and the current uncertainties are very tough on this sector. There are many reasons for this which includes a rapidly slowing U.S. oil and gas production which could negatively impact many midstream companies. Therefore, in this sector, income investors are clearly best served by investing in the best company with the best management. Clearly the best-of-breed is Enterprise Products Partners (EPD). We explain later in this report on why EPD is one of the best high-yielding companies to buy and hold for the very long term.

Tax Note: EPD issues a K-1.

Recent Performance

The energy sector remains out of favor by investors. However, during the past several months, EPD has been a leader in the industry. It has strongly outperformed all the energy indexes including Energy Index (XLE) and the midstream index (AMLP) over the short-term and long-term periods. During the past six months, EPD has returned 20% including dividends.

ChartData by YCharts

Importantly for income investors, we are patient. We are happy to collect high income from super solid companies until Mr. Market realizes that this is one of the best companies to buy and hold for the long run.

For investors, the good news is that EPD trades at very cheap valuations. EPD shares still have a long way to go to approach historical valuations while still offering a sustainable and growing 11% yield. The appreciation potential for EPD is very rare for an income type investment. When one also considers that EPD traditionally grows at a decent pace, these shares could offer a retiree that unusual combination of appreciation and growing generous distributions for the foreseeable future.

Long-Term Debt

This company has felt the pressure to lower debt levels as have many competitors

NEW YORK, Sept. 30, 2020 /PRNewswire/ — BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners” or “BGC” or the “Company”), a leading global brokerage and financial technology company, today announced that it has updated its outlook for the quarter ending September 30, 2020.

Updated Outlook
Against a backdrop of lower industry volumes across rates, foreign exchange, and credit,1 BGC’s revenue and pre-tax Adjusted Earnings for the third quarter of 2020 are now expected to be between the mid-point and the low-end of the range of its previously stated outlook. The Company’s outlook was contained in BGC’s financial results press release issued on July 30, 2020, which can be found at http://ir.bgcpartners.com.

Non-GAAP Financial Measures
This document contains non-GAAP financial measures that differ from the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”). Non-GAAP financial measures used by the Company include “Adjusted Earnings before noncontrolling interests and taxes”, which is used interchangeably with “pre-tax Adjusted Earnings”; “Post-tax Adjusted Earnings to fully diluted shareholders”, which is used interchangeably with “post-tax Adjusted Earnings”; “Adjusted EBITDA”; and “Liquidity”. The definitions of these terms are below.

Adjusted Earnings Defined
BGC uses non-GAAP financial measures, including “Adjusted Earnings before noncontrolling interests and taxes” and “Post-tax Adjusted Earnings to fully diluted shareholders”, which are supplemental measures of operating results used by management to evaluate the financial performance of the Company and its consolidated subsidiaries. BGC believes that Adjusted Earnings best reflect the operating earnings generated by the Company on a consolidated basis and are the earnings which management considers when managing its business.

As compared with “Income (loss) from operations before income taxes” and “Net income (loss) for fully diluted shares”, both prepared in accordance with GAAP, Adjusted Earnings calculations primarily exclude certain