I recently came across a stock teaser pitch by Altimetry’s Joel Litman and decided to put this post together to share what I learned about his 2023 stock picks.
I’ve also written about his 2022 recommendations as well, so you might find that interesting if you want to know what some of his past stock picks are and how they’ve done.
In any case, this article will focus on Litman’s 2023 stocks, and I will strive to keep it updated as he releases new presentations discussing his predictions and picks.
So with that said, let’s dive right into it!
What Is Joel Litman Predicting for 2023?
Joel Litman’s latest 2023 prediction centers around two main things:
- First, he believes that Joe Biden will get re-elected (by a “landslide”).
- And second, he’s super bullish on natural gas, or more specifically, liquified natural gas (LNG).
There’s a lot to unpack within those two points, but I’ll do my best to summarise what I learned by going through the presentation where he explained his thesis.
Let’s start with his first prediction…
“I believe Joe Biden, despite that fact that he is now 80 years old, and has less than a 45% approval rating in 2023, will not only run again in 2024…
“But could win a second presidential term by a LANDSLIDE.
“Along the way, he’ll become one of the most powerful presidents in recent memory.”
Source: https://web.archive.org/web/20230301233802/https://secure.altimetry.com/?cid=MKT713649&eid=MKT719341&assetId=AST283792&page=2
As part of this prediction, Litman talked about how he believes a “little-known change” is underway in the U.S., which he says “became reality on July 25.”
What happened on July 25th?
From what I can gather, Litman’s talking about how the U.S. became the top LNG exporter on July 25, 2022.
“Get this: as recently as 2016, we were still IMPORTING massive amounts of natural gas. We basically weren’t exporting any natural gas at all.
“But on July 25, 2022, just six years later, the U.S. officially became the number one LNG exporter on the planet.”
According to Litman, this “new force” (he appears to be referring to LNG) will increase the wealth of the United States but, at the same time, give more power to the federal government. And he made several predictions as to the impact this could have.
This new force will increase the wealth of the United States and improve our standing in the world, but… in the process… will also empower the federal government… enabling terrifying and wasteful socialist policies.
And although I’m recording this in 2023… after the midterm elections, and after Donald Trump announced his 2024 campaign, I already see the path for Joe Biden’s LANDSLIDE reelection.
And in a second term, I believe the progressives, using their vast new powers could:
- Increase the Fed’s money printing, leading to higher inflation
- Seize control of the entire 401(k) retirement system, forcing us to buy risky government debt
- Implement vast new wealth taxes
- Continue to expand welfare rolls by record amounts
So to sum it up… Joel Litman seems to think that LNG will bring prosperity to the U.S. and that this, in turn, could see Joe Biden get re-elected because, as he puts it, “presidents who garner the most economic power end up achieving the most political power.”
“Whether you like it or not… presidents who garner the most economic power end up achieving the most political power. And… for the last 150 years… the root of modern economic power has come from the world’s oil fields.
“Today, Joe Biden is likely to do the same… but with natural gas instead of oil.”
Why is Litman so bullish on LNG, though?
According to Litman, “the oil and gasoline business is going extinct,” and despite advancements in solar and wind technology, he doesn’t believe that this technology will be enough to make up a “meaningful portion of the electric grid” for the next 20 or 30 years.
“Just like everyone else, I want a better and cleaner environment. And less pollution.
“And someday… at some point in the future… battery technology, wind power, and solar will probably become efficient enough to make up a meaningful portion of the electric grid – but not today.
“And not anytime soon – not in the next 20 or 30 years… at least.”
And according to Litman’s presentation, natural gas is the answer.
“The future for electricity, which will power our cars and homes in America and all over the world is natural gas.”
[…]
“In short, for many decades to come, natural gas will power the world’s electricity grids.”
The reason, from what I can gather, is because natural gas is abundant in the U.S., and he believes that America has the best natural gas export infrastructure on the planet. He also points out that LNG is a “clean” energy source and that it’s affordable.
“To put it as plainly and simply as possible:
“Without natural gas, no electrical grid anywhere in the world will continue to function at anywhere near capacity.
“And luckily for us, the U.S. is set up to completely dominate this space for many years to come.
“In fact, in a decade, no one will need Saudi Arabia.
“And this is all happening right now for two simple reasons:
- Because America has some of the best natural gas reserves in the world…
- Because America has the best natural gas export infrastructure on the planet (more details in just a second).”
[…]
“The simple truth is, American LNG is now, and will continue to be, the cleanest, cheapest, and most important energy resource in the world. And it will hold this position for many, many years to come.”
I have come across many different “pro-LNG” stock teasers over the past 12 months, even from some well-known tech investing gurus. So while I did find his take interesting, Litman’s LNG prediction didn’t really come as much of a surprise.
It seems many newsletter gurus are watching the LNG space closely.
What stocks is Litman bullish on?
The best way to find out what companies Joel Litman is recommending would be to join one of his newsletter services (like Hidden Alpha). But you can learn a lot just by researching the clues he shares in some of his presentations, which is what I’ve done.
And in the process, I have managed to uncover some of his picks.
So let’s discuss those now.
Joel Litman’s 2023 Stock Picks (Tickers Revealed)
Joel Litman teased several companies in his latest LNG-focused presentation, and in this section, I’ll show you what I have learned about them.
LNG Equipment Service Company
The first company Litman talked about was Baker Hughes (BKR), a Houston-based oil field services company that provides products and services for oil well drilling, formation evaluation, completion, production, and reservoir consulting.
I didn’t have to do any research to find this one because he gave it away for free in the presentation. Here’s a snippet of what Litman said about the company:
“The company I recommend you buy right now is called Baker Hughes and the stock symbol is BKR.”
[…]
“Today you can buy Baker Hughes, one of America’s best LNG equipment service companies, at a super-low price. We conservatively expect gains of 100% or more, plus huge dividends along the way.
“Again, the stock symbol is BKR, and we recommend you buy the company up to $40 per share.”
“The Perfect LNG Portfolio”
Joel Litman’s “Perfect LNG Portfolio” consists of an assortment of U.S. companies that he says “should provide extraordinary gains over the next few years and beyond.”
“The next step I strongly recommend you take is to build what we consider ‘The Perfect LNG Portfolio’ of U.S. firms that gush cash in this Shale Renaissance, and should provide extraordinary gains over the next few years and beyond.”
The full list of these stocks is listed in a report called The Perfect LNG Portfolio, which you can only access by joining his Hidden Alpha service.
I am a member of Hidden Alpha (and you can see my full review of it here), but out of respect for the fact that it’s a paid service, I have not (yet) read this report.
I have, however, looked into the clues he shared about two of these companies.
So let’s start with his clues about the first company:
“For example, one of the companies in our Perfect Portfolio is one of the biggest natural gas pipeline operators in the U.S. Get this: About 50% of America’s natural gas headed for export touches this firm’s pipeline.
“We expect the price of this company to soar in the years to come, and along the way, you should receive huge cash dividends, which are approximately 6% of the share price as I speak.
“One thing I love about this company is how management’s incentives are aligned directly with yours. The CEO earns a salary of just $1, so like you, he only makes money when the share price goes up and big dividends are paid.”
What could it be? My guess is that Litman’s teasing Kinder Morgan (KMI), a Texas-based natural gas pipeline company.
Here’s why I say that:
- For starters, the company website states that Kinder Morgan either own an interest in or operates the largest natural gas network in North America.
- Second, the dividend yield is sitting at just over 6.4% as of writing.
- And third, the CEO reportedly earned a salary of $1 in 2020.
As for Litman’s second “Perfect LNG Portfolio” pick, here are his clues:
“Another company in our Perfect Portfolio controls some of the best properties in the Marcellus and Utica developments. I mentioned earlier how these properties combined are the biggest energy reserve in the world.
“And I believe this firm is set to make a fortune in the years to come. One of the big reasons is because unlike so many other natural gas firms, this firm did not ‘hedge’ future earnings.
“You see, many companies like to ‘lock in’ future prices, so they know exactly how much money they’ll make. This company, however, has removed all hedges for 2023, so if LNG prices rise as we expect, their gains will soar.”
Those are very limited clues, so I’m not sure what this one is.
However, I did find an article on globaldata.com that lists almost a dozen “key players” in the Marcellus and Utica developments, so that may give you some ideas as to what it might be.
“U.S. Gov. Inc.”
The final company Joel Litman teased in his February 2023 presentation was one he referred to as “U.S. Gov. Inc.”
And from what I can gather, he calls it that because, according to Litman, “99% of this company’s revenues are in some way connected to the U.S. government.”
“You see, in addition to the LNG investments I’ve mentioned already, I strongly encourage you to immediately buy shares in a business I sometimes refer to as ‘U.S. Gov. Inc.’
“It’s a publicly traded firm that might be the best retirement stock in America. It’s so intricately tied to the growth of the U.S. government that it’s almost like an arm of the government- but one that pays you instead of the other way around!
“In fact, our forensic accounting shows that 99% of this company’s revenues are in some way connected to the U.S. government.
“I believe this is the perfect retirement stock right now because there is ZERO doubt in my mind the U.S. government will be much bigger in the future.”
He also dropped the following hints about its stock:
“Over the past five years, it’s up 30% more than the S&P 500. Over the past decade, it’s up almost 500% more than the overall stock market, outperforming even high-tech companies like Facebook, Google, and Intel!”
[…]
“And over the really long term… the past 30 years… it’s up more than 5,900% with dividends reinvested.
“That’s one thing I almost forgot to mention… it also pays huge dividends, which go up about 10% a year on average. So, you could collect fantastic cash distributions, while you watch the share price climb higher.”
What could this one be?
Honestly, I have no idea what this one is (at least, not with any level of certainty).
Basically, we’re looking for a company that:
- Has a large portion of its revenue coming from the U.S. government.
- Is up 30% more than the S&P 500 since 2018.
- Is up more than 5,900% with dividends reinvested since the early 1990s.
- Pays a “huge” dividend that rises about 10% a year on average.
Those are reasonably specific clues, but without more to go off, this is still a tough one. Based on what Litman said, the closest matches I found were Northrop Grumman, Raytheon Technologies, or Lockheed Martin.
But those are just wild guesses, really. It could be any of those or none of those. So if you have any guesses on what they might be, let me know in the comments below!
Recommended: Go here to see my #1 rated stock advisory of 2024
Is Hidden Alpha Legit and Worth It?
Hidden Alpha is a legitimate service, yes. I have personally subscribed to this service and published a detailed review of my experience.
So you might find that helpful if you want all the details.
But in short, Hidden Alpha is Litman’s flagship newsletter service, and it’s where he shares his market insights, and stock picks each month.
I wouldn’t expect to get rich overnight by joining, but I have found the insights Litman shares to be interesting, and he has recommended some great stocks.
Another thing I like about Litman’s approach is that it’s largely based on analyzing the numbers and getting the “true” picture of a given company.
In short, Litman is a forensic accountant, and he uses his skills to more or less “reassemble” a company’s financial data using Uniform Adjusted Financial Reporting Standards (UAFRS).
I’m not an accountant, so much of what he does is well beyond me. But based on what I do understand of his approach, it’s unique from most newsletters I’ve come across. And while not everything he’s recommended has worked out, some of his Hidden Alpha picks have done well.
As for whether or not it’s worth it, at the end of the day, that is something only you can decide. But for $49, I think the newsletter offers a lot of value for long-term investors who want to learn more from Joel Litman.
Bottom Line
Joel Litman’s latest 2023 prediction centers around his belief that LNG is (and will continue to be) the most important energy resource in the world.
And he teased a handful of LNG-related stocks. One he gave away for free (Baker Hughes), and another appears to be Kinder Morgan, based on my research of the clues he shared.
Nobody knows what the future of energy will look like, much less which stocks are going to be the biggest winners. So I wouldn’t rush into anything thinking it’s a “sure thing.” As you know, there are no guarantees when it comes to investing.
But I hope you found the research I’ve shared on Litman’s stock picks interesting, and I will endeavor to keep this post updated as he releases new teasers throughout the year.
Thanks for reading!
The emergence of the natural gas industry in the US in 2016 is a major new profit center for our nation, and to the extent nations of the world want to have cleaner
sources of energy, they will turn to natural gas. However, 2023 is the all time record
year for global coal consumption, led by unabashed coal consumers China and India.
Apparently, they are uninformed about the risk of Climate Change, or they don’t believe it, or they don’t care. Coal supply in 2022-23 has declined sharply as the world has shunned Russian coal, and now Germany and Japan are importing their non inconsiderable demand for coal from the Assusies and Americans. When LNG
becomes too expensive relative to coal, foreigners will still buy coal.
Also, an estimated 8 new LNG plants will double the number of operating LNG
plants in the US in 2024-2025 and an additional 15 plants on the drawing board may never be built,
Kinder Morgan has constructed a 48″ diameter pipeline to bring natural gas from the Permian Basin but investors must remember that the Permian mainly produces
natural gas as an incidental product to oil production. If oil production goes down,
natural gas production from the Permian will drop dramatically.
The Marcellus-Utica Shale Basin contains more natural gas than all the other natural gas basins of our nation combined and most of this natural gas is found a shallow depths at a cost of production at or less than $1/mcf. This gives natural gas tremendous pricing leverage when the price of natural gas in the summer of 2022
reached about $9/mcf when the Europeans were frantically buying LNG to survive the next winter. The winter of 2021-22, Germans were in the woods chopping firewood largely consider their much heralded wind turbines experienced a wind
lull beginning in the summer 2021 and lasting most of the next 12 months. Angela
Merkl has shut down the last of Germany’s 17 nuclear power plants because they distrust nuclear (carbon free) power as much as they believe Climate Change doctine. Germans have a penchant for believing extreme ideologies.
Joel Litman is pitching his corporate bond service arguing rightly that in a stock
market crash, corporate bonds will fall and many of them will recover, while others
fail. He argues that hedge fund managers and other institutions have paid them as
much as $100000 per month for his bond research. I do not doubt this. But in a
stock market crash, there is invariably the flight to the safety of long US Zero Coupon bonds. I think the average investor is safer invested for a market
crash in US Treasury Zero Coupon bonds. If a market crash occurred now with the
long bond yielding 4.75% and yields fell (easily) to 3%, the US Treasury Zero Coupon
bond will appreciate about 40%. However, I believe long US bond yields are going to pass short rates coming down in 2024, and go over 5% maybe close to 6% in 2024
as the Chinese repatriate their wealth in the form of US Treasuries to pay their bills
during their deepening economic crisis. As stocks go higher, the S&P 500 yield will
approach 1%. THE YIELD SPREAD BETWEEN US GOVERNMENT BOND AND STOCKS WILL APPROACH A HISTORIC EXTREMITY not seen since August, 1987 when the spread between US bond yields and stocks was the widest in 100 years, the same
year the US reached its first $1 trillion national debt. Two months later, the market
corrected the abnormaly, some folks remember.
timing and price also are very important, if too many follow a recommendation,
the price whizzes up, it becomes overbought, it corrects. its not enough for a company to be great, but the share price needs to be undervalued relative to the future. Thus with recommendation services, its best to delay buying in and watch the share price develop. This also evades pump and dump. With graphs shown in many advisories advert videos, there are plenty of buying opportunities long after the recommendation!
I agree with you–only GOD CAN BE SURE OF THE FUTURE–and most stock analysis
that tell you to buy certain stocks in a SECTOR —HAVE A BIAS–And they are right
about 50% of time and wrong about 50% of the time. NOT TOO GOOD–for an investor to put his money on —and have a 50% chance to lose.
I think you always have a clear view of what we can expect in the world today. Only God knows for sure.