DC Today is a daily missive from the Dividend Cafe of The Bahnsen Group. While the Dividend Cafe’s weekly market commentary is meant to be long-form, macroeconomic, and principle-driven, the DC Today’s purpose is to provide a daily synopsis of markets, politics, and current events. It will be short, sweet, and hopefully, informative. Our goal is to bring you the latest and most relevant market information and insights, written only by us. Please feel free to share The DC Today with your friends and family. And of course, we always welcome your feedback as to how we can make it more relevant and practical for you!


Dear Valued Clients and Friends –

So the market went up again today, went negative in the middle of the day, then rallied back in the second half of the day (see chart below).  The FDIC is looking to move the cost of the recent bank failures to the banks that didn’t fail (read: to their customers), Sen. Joe Manchin has decided he regrets his support of the “Inflation Reduction Act” atrocity, I wrote of extraordinary bond market volatility two days ago, and then we went two days in a row with bonds frozen in time, and Dr. Anthony Fauci has himself a speaking gig (not sure if it will be virtual or not?).

I am writing this from Washington D.C. where I spoke at a summit this afternoon and where some tendency to read everything through a political lens is intensified.  It always feels a little dirty, to be honest.  But it is a gorgeous day and certainly a gorgeous time of the year, and my two recommendations for anyone visiting our nation’s capital are: (1) Come in the spring, and (2) Don’t come as a lobbyist, bureaucrat, or general political crony.  Enough said.

I remain convinced that the key issue adding to profitability in the energy sector going forward is constrained supply, much of which is a decision and some of which is circumstantially forced.  Sen. Manchin’s op-ed mentioned above may reflect a sitting U.S. Senator shocked – shocked! – to discover that many do not want to facilitate U.S. energy independence, but it is not a shock at all.  And what it does is make the sector even more attractive as it pertains to legacy and incumbent assets, pipelines, and producers.  The sector is capital constrained, which boosts expected rates of return for the capital that comes in.  It is supply constrained, which boosts prices and margins for the supply that comes online.  And it is sentiment constrained, which boosts risk premium around as a contrarian reality.  It will ebb and flow, no doubt, but what the opponents of our U.S. energy sector never understand is that all the bad things are actually good things for investors.

More here:

Market Action

*CNBC, DJIA, March 30, 2023

Dow: +141 points  (+0.43%)
S&P: +0.57%
Nasdaq: +0.73%
10-Year Treasury Yield: 3.55% (+/- basis points)
Top-performing sector: Real Estate (+1.22%)
Bottom-performing sector: Financials (-0.29%)
WTI Crude Oil: $74.38/barrel (+1.93%)

Ask David

Do the three ‘crypto’ bank closures reduce the potential supply of credit to, and therefore supply of, crypto currencies, thereby ‘explaining’ the recent crypto price rallies?
~ Julien

No.  The one correlation that has been impenetrable for years now is that crypto rallies with speculation and falls without it.  Nasdaq, tech, leverage, and such are the “beta” of crypto.  The LACK of credit to crypto for LEVERAGED crypto purchases added to its bloodbath late last year, but there is no change in the supply of crypto up or down when leverage is there or not there; it is a mirage.  Crypto has gone up this year with other speculation and may go up further, or down further, as any valueless speculative exercise may go – that is, at the discretion of its speculators.

Do you consider dividend growth investing more of a way for an investor to play offense or to play defense
~ Gavin

Yes.  Investing for cash flow growth is the best offense/defense blend I am aware of for a risk-taker.  Portfolio hedges will play defense but zap offense.  Using leverage or pursuing speculative growth or market timing or multiple expansion will play offense but lack defense.  We are looking for fundamental strength in the balance sheet, Free Cash Flow growth, and a defensible business model, which is the best defense there is.  But that high single-digit FCF growth resulting in a high single-digit total return between yield and re-pricing is a textbook offense as well, and not offsides to what investors can expect these well-run companies to deliver.

Send questions any time, and have a great night!

With regards,

David L. Bahnsen
Chief Investment Officer, Managing Partner

The Bahnsen Group

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About the Author


Founder, Managing Partner,
and Chief Investment Officer

David is a frequent guest on CNBC, Bloomberg, and Fox Business and is a regular contributor to National Review and Forbes. David serves on the Board of Directors for the National Review Institute and is a founding Trustee for Pacifica Christian High School of Orange County.

He is the author of the books, Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It (Post Hill Press), The Case for Dividend Growth: Investing in a Post-Crisis World (Post Hill Press) and his latest, Elizabeth Warren: How Her Presidency Would Destroy the Middle Class and the American Dream (2020).