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$VIX Limbo

Happy Friday folks! While the market might have earned you 1% over the last 5 days, we had one of our best weeks yet with multiple double-digit trade recommendations including 41% on AMC, and 23% on Lyft! Read on for this week’s long-term investment recommendation.


“The happiness of your life depends upon the quality of your thoughts: therefore, guard accordingly, and take care that you entertain no notions unsuitable to virtue and reasonable nature.” - Marcus Aurelius


Market Talk

Throughout the week the S&P 500 was largely flat with a gain of 69bps as the majority of markets remained uncertain of what comes next both at home and abroad. The Nasdaq jumped by 2.9% as tech names of all sizes saw a massive bullish rally throughout the week. Through all of this, the $VIX dropped further, grazing a min of 20.85 on Thursday; volatility hasn’t dropped into the teens for over a quarter since early April.


Long Term Pick: Capitalize on the Consolidation Play with Brookfield Infrastructure Partners ($BIP.UN-TSX)

Rising rates, ‘slow-growth’ fears and a geopolitical minefield have made cash trash and real assets king, as such a name that we’ve liked in the past and still do today is Brookfield Infrastructure Partners ($BIP.UN-TSX). As an infrastructure investment partnership, $BIP is the premier name to own in the space with a diversified real asset base within the utility, transport, midstream and data segments.

Further to this, Brookfield is a top name in private equity, competing with the likes of Blackstone and proving their acquisition and operational superiority time and time again; the fund’s Q2 report this week was the most recent example of this as management moonshotted consensus revenue expectations by 208%. Moreover, this was realized on a continued follow-through of their asset rotation strategy with proceeds from the sale of four assets totalling $900M just this quarter. This success was compounded by the partnership achieving a 30% increase in funds from operation (FFO) over the comparable period, bringing FFO to $513M for the quarter - this increase in cash flows was led by strong gains in their transport segment. To tie it all together, management has outlined that the strong quarter will likely lead to the partnership’s ability to beat last year’s capital deployment figures thus further supporting the narrative for today as a buying opportunity given that $BIP is still trading at a 6% discount to its all-time high.


Chart of the Day - Nonfarm Payrolls against the S&P 500

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