Investment Q&A

Both macro themes regarding the political landscape and the data center demand are legitimate. That being said, we think investors should pay more attention to the underlying businesses over the macro themes, which investors have limited control of. O&G names tend to do better in a healthy energy environment, but the businesses are much more cyclical than the midstream businesses. Midstream is much more stable, but the prospects for capital appreciation are very limited.

At the end of the day, it still depends on an investors’ strategy and preference. For example, If investors are willing to endure the cyclical downturn or are nimble enough to try and time the cycle (not many people can practice these successfully over time), then we think O&G is the one investors should allocate more towards. If investors need stability with less volatility and are willing to sacrifice some upside from capital appreciation, we think a heavy weight towards the midstream names would make more sense.