A fast-moving story attracts traders, professionals who can sift through the noise for opportunities, and people with a high risk tolerance. Utility companies attract investors with low-risk tolerances eager for defensive positions and steady income.
So where does that leave Pacific General & Electric, PG&E (PCG)? Hard to say. With a potential bankruptcy looming, activist investors agitating against that, big outstanding liabilities related to 2017 and 2018 wildfires in California, and wild price swings in all directions, it's hard to keep ahead of the news. We break that down and look at what the broader lessons are for investors.
Topics covered:
Betting on and reacting to bad news - 3:00 How to factor in (or ignore) price action for fundamental strategies? - 8:00 The play-by-play on PG&E's current situation - 12:45 Blowing up the 'utilities are a safety play' cliche - 16:45 Breaking out the bankruptcy scenarios - 19:45 Blue Mountain's Case - 26:30 The fuzzy aspects of the law - 31:30 What about Baupost Group's position - 37:45