Two Prolific Artists: O'Keeffe & Picasso

Pablo Picasso in his 20s in Montmartre, the golden age of his early years in Paris.

Corn, Dark I, by Georgia O'Keeffe

By Michael Hooper

Trying to stay warm this winter, I have sat by the fireplace reading biographies about two great artists: Georgia O'Keeffe A Life by Roxana Robinson, and Picasso Creator and Destroyer by Arianna Stassinopoulos Huffington. I couldn't have picked two more fascinating and independent people, O'Keeffe is escaping from patronizing men into an independent feminine mystique while Picasso the raging bull has extensive relationships with multiple women. Both artists lived into their 90s yet made their mark at various stages in their lives. 

Georgia O'Keeffe became known for a very distinctive style of color patterns of nature, especially in the Southwest where her views of the desert landscape and big sky were evocative and much loved. She was also known for her enlarged flowers that had a sexuality about them.

O'Keeffe was married to Alfred Stieglitz, the famed photographer and gallery promoter who sold her work. Some of her paintings sold for thousands of dollars in the 1930s. Stieglitz photographed O'Keeffe nude and exhibited the photographs as art. O'Keeffe painted leaves, branches or bones she found on walks. She worked in a studio that was a former shack on the Stieglitz family farm at Lake George, N.Y.

O'Keeffe moved out west for the back half of her life, settling at Ghost Ranch, New Mexico. Eventually one of her hired hands Juan Hamilton takes control with power of attorney over her finances and inherits most of her money through changes in her will. Her estate was worth $70 million. Her family sued and received a settlement.

At one time O'Keeffe had a chance to be introduced to Picasso but she declined the offer because she said they wouldn't be able to speak to one another, according to Robinson's book.

Pablo Picasso was a precocious child prodigy from Malaga, Spain, who could draw anything and excelled beyond his father who was an art teacher. When Picasso was almost 19 years old, he arrived in Paris speaking no French and having no place to stay but quickly found an art studio and fell into Parisian life of cafes and shows, artwork and brothels. He learned to speak French and lived in France most of his life. 

Picasso emulated multiple styles and was an inventor of styles like his African-influenced period and his cubism. He was good at every style he worked in. Picasso's Rose Period, his Blue Period and his Cubism all are so fascinating. I saw his Old Guitarist at the Guggenheim. Picasso was quick to draw and paint canvases; he produced tens of thousands of works of art, sculpture and drawings.

Yet Huffington spends much of her book on the woman's point of view, the day-to-day living with this insufferable man with a raging passion for sex. Picasso would find a model and then keep her around and sleep with her and sometimes marry her or just put her on the payroll. Dora Maar is a good example of a model with a sexual relationship with him while he was still attached to another woman. His infidelity would drive women crazy. Yet his life with them was often brilliant with encounters with Henri Matisse and Gertrude Stein and other interesting people of the day. Dora Maar was not the same person after Picasso got rid of her.

Huffington depends largely on the published works and interviews with Francois Gilot, Picasso's former former lover and mother of Claude Pierre. Gilot published a memoir, "Life With Picasso" in 1964 with author Carlton Lake.

I enjoyed reading about Pablo Picasso in his 20s in Montmartre, the golden age of his early years in Paris. Before long, he had met Gertrude Stein in Paris, and many other artists. Picasso had his gang of friends. They would go to bull fights. Somehow he became a member of the Communist Party. It's kind of a strange trip in the end, very sad when he shuns his children and grandchildren.

With the O'Keeffe book, I got a sense of O'Keeffe's feeling and intuition in art. The Picasso book was a very good book too, but felt it could have provided more discussions and photographs of his artworks and how Picasso was so influential with certain artworks. Both books are enriching and entertaining. Both Picasso and O'Keeffe led long and prolific lives.

Huge Opportunity in Coinbase Stock

By Michael Hooper

The opportunity to own stock in Coinbase Global Inc. is huge. The company plans a direct listing of shares on March 14 on the NASDAQ. Once shares begin trading I plan to buy them. This company is the leading trading platform for Bitcoin and other crypto currencies. I've used Coinbase successfully to buy and sell Bitcoin and ethereum since 2017.

The direct listing price of the stock will likely be very high. The trading ticker for Coinbase is (COIN). Anyone with an account at a stock brokerage can buy the stock after the direct listing. On Thursday Feb. 25, 2021, the company made a filing of S-1 Prospectus with the Securities and Exchange Commission.

There was a private sale of 127,000 shares at $373 per share which works out to a valuation of $100 billion, according to Axios.

Due to increasing popularity of Bitcoin and other cryptocurrencies, I expect the direct listing of Coinbase to generate huge support.

Coinbase states that it currently has about 43 million retail users, 7,000 institutions, and 115,000 ecosystem partners in over 100 countries.

As of Dec. 31, 2020, the platform had executed $456 billion in trading volume since its inception and stored over $90 billion worth of assets. In May 2020, the company with 1,200 employees became “a remote-first company,” which means they work remotely first with no headquarters yet maintain some physical offices.

Coinbase reported $322 million of profits on $1.28 billion in revenue for 2020, compared to a $30 million net loss on $534 million in revenue for 2019.

The largest single owner of Coinbase stock is Marc Andreessen at 24.6% of stock. Brian Armstrong, CEO, owns 21% of Coinbase stock.

Critics complain of Coinbase's high fees for transactions. There are other trading platforms like uniswap that may prove to be more competitive.

There are other risks. What if the crypto markets suffer a crash and a long bear market? There will be ebbs and flows of people in and out of it. But long term I think crypto is here to stay.

Kansas Gas Service Says Customers Can Expect Higher Bills

This chart from macrotrends shows the Henry Hub natural gas spot price rose from $2 to $23.86 on Feb. 17.

By Michael Hooper 

Natural gas prices soared to unprecedented levels during the extreme cold spell in February. Customers of Kansas Gas Service can expect their bills to be much higher than normal. The spot price of Henry Hub natural gas prices climbed from $2 per mcf to $23.86 by Feb. 17 during the cold weather event.

"Due to the historically low temperatures that remained below freezing over an extended period of time, we experienced much higher natural gas demand that resulted in a significant increase in natural gas market prices on a portion of the supply purchased during this period," said Dawn Tripp, manager of public relations for Kansas Gas Service. "Customers should prepare for higher natural gas bills because of the increased usage for home heating."

ONE Gas (OGS), of Tulsa, owns Kansas Gas Service and also serves customers in Texas and Oklahoma.

"Many of our service areas haven’t seen such low temperatures in more than 100 years," Tripp told Thoughtful Investor. "The higher amount of gas used will be reflected on customers’ bills. We do not set the price, nor mark up the price we pay for the gas. We purchase the gas from suppliers and then deliver it to customer homes. The price we pay the suppliers for gas is the price customers pay."

A review of natural gas prices show the price was for many years between $2 and $4 per million BTU. One million BTU is approximately equal to 1,000 cubic feet of natural gas. A unit of 1,000 cubic feet of natural gas is one mcf. It's not uncommon for a household to use 1 mcf in a single day of heating in the cold weather months. When the price of one mcf soared from $2 to $23.86 on Feb. 17 during the cold weather spell, companies that needed gas would have to pay the spot price on the open market and then pass it onto their customers.

It's difficult to speculate here, but it's possible customers will see their bills rise 3 to 10 times over their normal bills. That is quite a variance but Kansas Gas Service would not provide hard numbers.

Tripp said Kansas Gas Service is working with the Kansas Corporation Commission on "options related to the impact to customer bills associated with the significantly high natural gas market prices during the cold weather event."

She said the KCC had issued an order that authorizes natural gas and electric utilities to defer any extraordinary costs incurred associated with ensuring that customers continue to receive service during the cold weather event.

She said Kansas Gas Service will make a filing with the KCC which includes a plan to minimize the financial impact of the cold weather event on customers over a reasonable period of time.

The KCC on Feb. 15 issued on Emergency Order authorizing natural gas and electric utilities under KCC jurisdiction to defer any extraordinary costs they incurred associated with ensuring that customers continued to receive service during the cold weather event. The utilities are tracking those costs and are required to make a filing with the KCC. That filing must include a plan to minimize the financial impact of the cold weather event on customers over a reasonable period of time. There is no specific due date set for those filings yet, said Linda Berry, spokesperson for the KCC.

My 20-Stock Value Play

The U.S. stock market crashed in March 2020, but quickly recovered and then went onto to reach new all-time highs. The investment, SPDR S&P500 ETF Trust (SPY), is one of my core holdings.

By Michael Hooper

The secret to my portfolio is owning fairly conservative value-play stocks with strong balance sheets, along with index funds, ETFs and bonds. Diversification is important, especially during downturns and crashes.

I have averaged an 11.5% annual return on my investment portfolio since 2009, according to numbers generated by Charles Schwab's performance tab. I am happy with this return. I could have done better by putting the entire portfolio in the S&P 500 Index, which generated a 15.2% annual return since 2009, but that increases risk and volatility.

About 62% of my portfolio is invested in income producing securities such as dividend paying stocks, ETFs, bonds and mutual funds. My equities include a balance of railroads, consumer stocks like PepsiCo (PEP), and S&P 500 ETFs. When quarterly income flows into my investment accounts, I buy more stock.

Berkshire Hathaway (BRK/B) represents 38% of my portfolio, partly because I've been an investor since 1997 and our original investment is up more than 10 times. Berkshire Hathaway is like a mutual fund because the holding company owns over 100 great businesses, such as Geico and BNSF Railway. And it has over $145 billion in cash and a strong balance sheet. Warren Buffett, CEO, won't be around forever but I'm sure the company will continue to do well long after he's gone. He's set it up that way. Berkshire Hathaway is currently trading at 1.38 times book value, that's at the high end of a trend that began in spring 2020 when it bottomed around 1.2 times book value. When it was trading that low in 2020, the company bought stock back because management thought it was so cheap.

The S&P 500. I like SPDR S&P 500 ETF Trust (SPY). The S&P 500 index is the standard by which all large cap investors are measured. Most managers cannot beat the index so why not just own the index. Every investor should own some of the S&P 500. I used to put my entire 401K into the S&P 500 at my employer. This strategy worked out pretty well. Right now the S&P 500 represents about 9% of my portfolio. But another 6% of my portfolio is in a similar investment, The Proshares S&P 500 Dividend Aristocats ETF (NOBL) is an ETF that pays a quarterly dividend yielding more than 2%.

I like Union Pacific (UNP), Norfolk Southern (NSC) and Canadian National Railway (CNI). These three are domineering railroads in their regions. They represent about 10% of my portfolio.

I like Google (GOOG), Apple (AAPL). These two assets represent 2% of my portfolio.

I own United Airlines (UAL), Expedia (EXPE), and Southwest Airlines (LUV). These three assets represent less than 1% of my portfolio. I'm betting travel will come back some day after the Covid-19 crisis subsides. I already have big gains in these stocks, but I think they have more to go.

About 10% of my portfolio is in PepsiCo (PEP) Coca-Cola (KO), Church and Dwight (CHD), Hershey (HSY). I like these companies for their steady earnings and dividends. My favorite is Church and Dwight, the company produces baking soda, condoms, oral hygiene products and vitamins. Sales of its vitamins have boomed during the Covid-19 pandemic.

Another 3.6% of my portfolio is in utilities including Evergy (EVRG) and Dominion (D). The utilities have paid dividends but haven't grown in value for the past year.

I own quite a bit of ishares Core US Aggregate bond index (AGG). And I own some railroad bonds from BNSF Railway and Union Pacific Railway. In total, the bonds represent about 20% of the portfolio.

I also have small positions in Aphria (APHA), Casey's (CASY) and MGP Ingredients (MGPI). I think the cannabis industry has a lot of potential and Aphria is a good bet.

In March 2020, I wrote an article calling on all young people to invest in the stock market after it crashed 20% because of the Covid-19 pandemic. The stock market recovered quickly, so anyone who invested at the bottom made 20% to 70% returns. I bought Apple in March 2020, and it's up 121%.

Stock prices are at all time highs but they could still go higher before they fall again. I expect a 10% correction sometime. If the majority of people get vaccinated, and Covid-19 numbers continue to drop, then perhaps we will see a reviving economy and opportunities for more job growth.

Editors Note: The author owns shares in all the stocks mentioned in this article.

The Worst Days of Leonaye Bulger

By Michael Hooper

I was rummaging through old photographs the other day when I found one of Leonaye Bulger, a friend from Clarinda, Iowa, my hometown where I grew up. She and I belong to the same church, Trinity Presbyterian Church where her father was the pastor.

Leonaye died tragically of cancer at age 28, too young. She was a good person. She was funny and kind and she liked photography and printing, she worked in the printing industry in Omaha and had saved her money to buy a new car. She was a hard-working person with a sweet and warm personality.

Sometime in the late 1980s, Leonaye and I arranged to meet for a day of photography around Clarinda, we were both home for the holidays. I remember it was cold that day yet it was sunny with blue skies. We drove in my car and walked all over Clarinda taking pictures. I remember we walked around the Gun Town area of Clarinda and took some pictures of goats in someone's field. I took a picture of her standing on a sidewalk on the north side of the square in downtown Clarinda. There she is smiling with her camera around her neck, wearing a blue coat with gloves because it was a cold day in Iowa. You can just see her excitement at being alive. She is so pleasant and easy to be around; a delightful personality with a beautiful soul. We were not romantic but I did kiss her and hug her and we held each other for a moment, I could sense she was holding out for someone special.

At church, my parents and brothers and I would eat cookies and drink coffee in the after church social room. I often talked to Kathy Hunter and sometimes Leonaye Bulger. 

After finding this old photo of Leonaye, I decided to look her up on the Internet. I found that she was the co-author of a book called The Worst Days, the Journal of a Young Cancer Patient for Healthcare Professionals, by Leonaye Bulger and Judy Dierkhising. There was one left at Amazon and I purchased it. The book is only 32 pages and I quickly read it after it arrived.

There are many worst days in the final eight months of her life. The first is the realization of her illness. She has a vaginal discharge but is confident it's not a yeast infection. She insists her doctor check her again and they do a biopsy.  For the results, she goes to the medical office and her doctor tells her cancer had spread to the upper third of her vagina. She writes, "I have endocervical andenocarcinoma cancer. I am devastated! Once the appointment is over, I lose it, the tears roll nonstop. How could this be? I am only 27 years old I do not drink, smoke, do drugs or sleep around! Why me? I learned today the body is mortal."

The book documents some of the drama that she is experiencing with relationships, including her boyfriend Michael. She buys a rabbit for companionship, and enjoys talking late into the night with her sister.

It's interesting her boyfriend's name is Michael, same as mine, but of course it's not me. I married my wife in 1993. Leonaye Bulger was born May 10th, 1966, and died May 29th, 1994. She left behind her sister and parents.

Among her worst days was the doctors' inspections of her pelvic region, it was embarrassing lying on a table where doctors, nurses and image specialists inspected her.

In her final days, the cancer destroys tissue in her uterus and this causes infection and swelling and she balloons to looking like seven months pregnant. She experiences very severe pain. I feel so sad for her, she was given morphine and was throwing up and unable to write in the end so she dictated her last words to her mother.

'Mom do something, the pain is too much," she said. The nurse prepares to inject more sleeping medicine. But Leonaye dies. She had just turned 28 years old.

In comparison to her worst days, Leonaye and I shared one of her best days, when she was happy, she was excited about shooting photos of buildings, animals and nature with me. We had great conversations. I think we were together maybe three or four hours. I remember leaving the Bulger house that day feeling a sense of contentment and hope. The Rev. Charles Bulger is a kind and warm soul. He always is so encouraging, and supported my family and my career in newspapers. These people are the kind of people who make a community stronger and better, more loving and full of hope. I'm sorry Leonaye did not live any longer. The world could have used her bright and shining spirit. May God give her the highest joys in heaven for all The Worst Days on Earth.

Evergy Hires Texan as New CEO

Evergy  (NYSE: EVRG) has hired a new president and CEO.

The company said today its board of directors has unanimously appointed David A. Campbell as President and Chief Executive Officer and a Director of Evergy, effective Jan. 4, 2021.

Campbell succeeds Terry Bassham, who previously announced his intention to retire from the Company. Bassham will remain Evergy’s President, CEO and member of the board until Campbell joins the Company.

“David is a proven leader with a track record of operational and financial success. His deep understanding of our industry and his ability to work with and balance the interests of all stakeholders, makes him our first and best choice to lead Evergy at this pivotal time,” said Mark Ruelle, Evergy Board Chair and Chair of the Search Committee. “David’s appointment is the culmination of a comprehensive national search that included many highly qualified internal and external candidates. The Search Committee focused on identifying a proven leader with deep industry experience, who has a strong reputation for having led value-building transformations and one who understands Evergy and its importance to the communities we serve. In David, we have found that leader.”

Campbell, 52, has served as Executive Vice President and Chief Financial Officer of Vistra Corporation, a multi-state electricity generation and retail electric provider headquartered in Dallas, Texas. Campbell’s focus at Vistra has included the company’s portfolio transformation, the announcement of the company’s greenhouse gas reduction targets, and the articulation of the company’s capital allocation strategy and long-term fundamental outlook. During his tenure, the Vistra team delivered at the high-end of its 2019 guidance and recently raised its 2020 outlook to the top end of the prior guidance range.

In addition to his strong performance at Vistra, Campbell has been successful in multiple leadership roles. As CEO of Sharyland, Campbell successfully navigated complex regulatory dynamics and won support for an asset swap with Oncor that resulted in a rate reduction for Sharyland’s customers, who otherwise faced higher rates due to Sharyland’s rural service territory. Prior to that, as CEO of Luminant, the largest power generator in Texas, Campbell oversaw coal and nuclear operations that consistently achieved top decile performance in capacity factors and top quartile or top decile performance in costs relative to industry benchmarks. As CFO of TXU Corp., Campbell was part of the senior leadership team that led the company’s financial and operational turnaround from 2004-2007, achieving the top performance in the S&P 500 Utilities Index.

“Evergy has a talented and capable leadership team, a steadfast commitment to serving customers and communities, and a strong track record as an emissions-free energy supplier,” said Campbell. “Evergy’s Board and management team have carefully developed and embarked on a high-performance strategic plan that contains the right elements to accelerate growth and provide tangible benefits for all the Company’s stakeholders. I join Evergy with a shared drive and commitment to provide customers with clean, affordable, reliable and secure energy to power their lives, while driving sustainable, superior value for shareholders. I look forward to working alongside the team to ensure that together we realize the potential Evergy has for continued success and growth.”

In August 2020, Evergy announced it was not going to seek a merger, but instead would pursue its Sustainability Transformation Plan (STP), a five-year strategic plan to deliver increased value for Evergy shareholders and benefit Evergy customers through additional cost reductions, improved grid reliability and security, enhanced customer experience and further accelerate Evergy’s transition to clean energy. The STP is expected to move Evergy to a top-quartile electric utility with 6% to 8% growth in earnings per share through 2024, and without dilution from having to issue additional equity, the company said.

Ruelle concluded, “Terry’s leadership and the culture he built have put the company on a strong, sustainable track for continued success. Terry has had a long and distinguished career as a utility executive, board member and colleague. We are grateful for his commitment to ensure a seamless transition and wish him well in his well-deserved retirement.”

Evergy also today reaffirmed its previously announced 2020 earnings guidance. As disclosed in its third quarter 2020 earnings results, Evergy narrowed 2020 GAAP EPS guidance to the upper end of the range of $2.58 to $2.73 and adjusted EPS guidance of $2.95 to $3.10.

Evergy, Inc. (NYSE: EVRG) serves approximately 1.6 million customers in Kansas and Missouri. Evergy was formed in 2018 when KCP&L and Westar Energy merged. 

Disclosure: The editor of this blog owns shares of Evergy.

CapFed Stock Climbs 13% after joining index but still down 21% YTD

By Michael Hooper

Capitol Federal Financial (CFFN) stock jumped 13% on Friday after it was announced the company would join the S&P SmallCap 600. The stock had hit a recent low of $8.75, but closed Friday at $10.60 per share.

Topeka-based Capitol Federal Financial (CFFN) is down 21% year-to-date compared with a 4% positive return of the S&P 500 through Oct. 2, 2020. The general stock market fell 30% in March during the Covid-19 crisis, but recovered over the spring and summer.

Evergy (EVRG) -- which is a combination of Westar Energy and Great Plains Energy -- is down 19% year-to-date.

Both Evergy and Capitol Federal are conservative retirement stocks that pay nice dividends but are not growth stocks. Mega cap growth stocks like Apple and and Google are winning in the market this year. Any stock that benefits from the home consumer is doing well. Amazon, Facebook, Zoom are all up gigantic. Banks, oil and utility stocks all have performed poorly this year. They are out of favor.

Evergy stock fell from $65 per share to $50 per share after the company announced in early August it was not going to seek a merger or sale as recommended by hedge fund Elliott Management. Investors, thinking there is not going to be a potential upside in a merger or acquisition, dumped the stock. Evergy earnings have been a little weak in the last three quarters yet Evergy is earning respectable money and able to pay its dividend, currently yielding 3.82%. Evergy management sees opportunities to reduce operating costs through its strategic plan by finding synergies between the Missouri and Kansas utilities and eliminating waste. Evergy is stepping up its capital improvement plan, to generate more returns in the future. EVRG stock closed Friday at $51.97

Capitol Federal Financial has fallen from $14 per share in January to $8.75 per share in mid-September. Then recovered 13% in one day after being appointed to replace Neogen (NEOG) in the S&P SmallCap 600 upon Neogen's move into the S&P MidCap 400.

Banks tend to perform better with higher interest rates, this gives them more flexibility in their net interest margin, but interest rates have fallen dramatically this year. The 10-year Treasury only yields 0.69%. People will see almost no returns on their savings accounts. Earnings at CapFed have been OK, but it's possible it may see some benefit in the third quarter from the uptick in demand for housing in Kansas. A few years ago, the company purchased Capital City Bank; this has added new services to the CapFed menu, including commercial loans and trust services. These areas of business will see growth as the bank scales out its commercial and trust services to all of its locations.

On August 6th, Michel' Phillip Cole, a member of the board of directors of Capitol Federal Financial, filed Form 4 with the Securities and Exchange commission saying she had purchased 7,040 shares on August 6th at 9.9459 per share. She listed the purchase as an open market or private purchase of stock. The form says she owns 19,411 shares of Capitol Federal. 

Perhaps the CapFed board member's recent purchase of stock may indicate she thinks there is value in the company and shares are under priced. The bank pays board members $66,000 a year for serving on the board.

CapFed stock is trading near book value. Before Covid-19, CFFN stock traded at 1.4 times book value in the previous three years compared to the current 1.12 ratio.

Disclosure: The author owns shares of Evergy (EVRG), but owns no shares of Capitol Federal.