What Did You Buy Today?

[Otter]

(09-13-2018, 09:30 AM)fenders53 Wrote: Sold a covered MO put with a great premium close to the money today so I should be long MO soon.  I am VERY tempted to add some more SO today.  SO seems to have a lot of support just south of current price.  Close enough anyway for a longterm hold.  I have been bitten by DIV yield traps in the past but never by a utility company.  They always get the BIZ figured out eventually and get by with it in the meantime because they have no competition.

There is competition on the long-term horizon. Locally-generated renewables that don't depend on the grid, like rooftop solar, will (in the long term) put a lot of pressure on the capital-intensive business model of traditional utilities. I don't see it significantly impacting earnings, or the ability to raise rates, in the short-term. But it is a systemic risk to the business model on the horizon. 

There will always be a place for traditional utilities, as heavy industry needs a steady supply of lots of power. The overall market may shrink though, as residential and light commercial development increasingly power themselves.