MIKE LARSONEditor

Energy Prices Surging! Interest Rates, Volatility on the March! Here’s What to Do ...

It was hot in Dallas last week. Abnormally hot. And I say this as someone who lives in Florida year-round.

I was there for the MoneyShow and the thermometer on my iPhone read 90 degrees at 5:30 p.m. Yikes! My Uber driver said something in the 70s was normal.

But the heat outside was no match for the “heat” in the markets! Take energy. Crude oil exploded above $76 a barrel, hitting a level not seen since November 2014. Heating oil also touched a four-year high.

Ironically, the last time I went to Dallas for work was in summer 2014. I was there to interview legendary oilman and billionaire T. Boone Pickens, and crude oil was just starting an epic plunge. It ultimately sank from more than $100 a barrel to $26-and-change in February 2016. Now more than four years later, we’re back in a powerful uptrend.

But oil wasn’t the only thing moving in big chunks. Interest rates also ripped higher, with the yield on the 30-year Treasury bond soaring to its highest level in four years. Meanwhile, the yield on the 10-year note surged to its highest since 2011 and the yield on the 5-year hit its highest since 2008!

What the heck is going on? Well, remember how I said we’ve seen a massive build-up in global debts, a massive surge in asset values and a massive bull market in complacency? Those forces left hidden “powder kegs” sprinkled throughout global markets – and now, those kegs are starting to explode!

We already saw it in foreign currencies, bonds and stocks. Now the domestic fixed-income and commodities markets are getting roiled.

Fortunately, there are ways to profit from the upside of all of this, along with ways to help reduce your exposure to the downside. This month’s issue will cover both.

Oil Soared in the Last ‘Late Cycle’ Environment, and it’s Happening Again!

I’m a follower of the economic and credit cycle for a very simple reason: Markets are constantly shifting from expansion to contraction, and from boom to bust. If you can catch those major turning points … and then ride the ensuing waves … you can make an absolute killing.

Late in the last cycle, for instance, crude oil prices went ballistic. U.S. crude oil prices soared from around $50 a barrel in January 2007 to a whopping $147 in July 2008. That’s a triple in just 18 months!

Table of ContentsWeiss Market Barometer . . . . . . . . . . . . . . . . . . . . . . . . Page 4

Bedrock Income Portfolio: This High-Yielding Permian Play Should Help Energize Your Portfolio . . . . . . . . . . . . . . Page 5

Dynamic Income Portfolio: As Rates Roil Markets, Make These Moves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 6

Q&A and Actions to Take . . . . . . . . . . . . . . . . . . . . . . . Page 9

Safe Money Report

© 2018 WEISS RATINGS. ALL RIGHTS RESERVED. 1-877-934-7778 WWW.WEISSRATINGS.COM

ISSUE 6 / OCTOBER 2018

continued on next page ...

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Now, as I noted earlier, we’re seeing oil prices perk up again. They’ve risen from lows in the mid-$20s all the way up to the mid-$70s.

That’s fueling incredible profit growth in the energy patch . S&P energy sector profits surged a whopping 124% in the second quarter, and they’re expected to soar another 94% in the third quarter, too, according to FactSet Research. That would be almost five times the S&P 500’s overall growth rate forecast.

What’s boosting energy prices and energy profits? Strong economic growth on the one hand, and concerns about Iranian supply on the other. Iran is the third-largest producer in OPEC, and it will fall under U.S. sanctions as of Nov. 4. Those restrictions could drain the world market of as many as 1.5 million barrels per day (bpd).

Saudi Arabia will likely help offset some of that supply deficit by increasing output. But many are skeptical the country has the will, or the spare capacity, to fully compensate.

All of this is great news for U.S. producers, who are churning out record amounts of oil . Led by fields in Texas and North Dakota, American output surged by 269,000 bpd to an all-time high of 10.964 million bpd in July. That puts our country just behind Russia, but slightly ahead of Saudi Arabia, in terms of global output.

Check out this chart my colleague Sean Brodrick made recently. It shows how not only has U.S. production surged 86% since early 2016, it’s also up 15% this year alone.

Despite rising production, overall U.S. oil stockpiles have been falling. That’s because of strong demand and because we’re exporting more and more of our crude to foreign buyers. This chart shows the juxtaposition between inventories (in black) and exports (in blue) …

President Trump would certainly like to see more supply come on the market to dampen prices. He’s been tweeting that OPEC is making things worse by keeping production too lean.

The International Energy Agency, a group set up by Western oil-consuming nations during the 1970s-era energy crisis, also recently joined the chorus. IEA head Fatih Birol told the Financial Times earlier this month that:

“Some countries have been making efforts to increase production, but this is far from comforting the markets right now ... My expectation and hope is that all the producers are aware of the sensitive situation and make their best efforts.”

But again, it’s an open question how much more OPEC could produce even if it wanted to. Saudi output just hit its highest on record, and as this chart (again, hat-tip to Sean) shows, OPEC overall doesn’t have much leftover capacity …

That figure of 2.34 million bpd is just the “official” number, by the way. Some outside observers believe the real number is less than HALF that amount.

I don’t know if oil is going to hit $100 a barrel. Or if it’s going to really shift into hyperdrive like it did in 2007-’08. But I do know that it’s probably a good time to add some exposure to energy in the model portfolio. The underlying fundamental and technical backdrop looks solid, and there are some attractive, high-yielding plays in the sector. See your Bedrock Income Portfolio article on page 5 for more details.

Rising Rates Finally Triggering My “3 ‘F’ Rule”

Now let’s shift focus and talk interest rates. They’ve been steadily rising for a while. Our Federal Reserve just raised short-term rates for the eighth time to a range of 2% to 2.25%.

Foreign central banks in places like Canada and the U.K. are also following suit. And even those central banks that haven’t yet raised their benchmark rates are dialing back QE or laying the groundwork for their own hikes next

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© 2018 Weiss Ratings. All rights reserved. Weiss Ratings, LLC is located at 4400 Northcorp Parkway, Palm Beach Gardens, FL 33410; Sales/Customer Service: 1-877-934-7778 Subscription rate: $149 for 12 monthly issues. Single issue price: $12.42. Publisher: Martin D. Weiss. Editor: Mike Larson. POSTMASTER: Send address changes to Safe Money Report, 4400 Northcorp Parkway, Palm Beach Gardens, FL 33410. DISCLAIMER: Safe Money Report is strictly an informational publication and does not provide individual, customized investment or trading advice to its subscribers. The money you allocate to speculative trading should be strictly the money you can afford to risk. While every effort is made to simulate the actual experience of subscribers, all performance figures must be considered hypothetical. References to examples of past performance are not intended to provide a total picture of positions results, and past results are no guarantee of future performance.

year. The European Central Bank and Bank of Japan are two key examples.

That didn’t matter for the broader stock market averages for a while. But now, my “Three ‘F’ Rule” is being violated . Specifically, rates are rising Fast enough, Far enough, and For long enough to go from being a positive indicator of growth/force for risk-taking to a negative one.

You can see it in the fact that the S&P 500 has struggled to advance further after tagging its previous highs.

You can see it in the fact that the divergences between the averages and multiple sectors have increased.

And you can see it in the fact that the big spike in rates last week caused the Dow Industrials to drop a few hundred points in a quick span of time.

Indeed, the Russell 2000 Index of smaller-capitalization stocks has given up every penny of gains it made since the end of May. Financials never even got close to making new highs … not even as over-loved, over-hyped, over-owned tech stocks did. The Volatility Index never made new lows when the S&P made new highs, and credit spreads failed to “confirm” the S&P action, too.

Warning signs all around.

Tying it All Together When it Comes to Your Model Portfolio

Now let’s tie everything together. As you know, I turned more cautious on the markets back in February/March. I recommended in regular issues and Flash Alerts that you reduce your stock exposure, raise cash and start hedging. Then on Sept. 19, I sent another alert recommending you take gains and implement more stop-losses.

You should have pocketed profits of around 9.5%, including dividends, on your trade in WEC Energy Group (WEC, Rated “B+”). Then you should have put a stop under Extra Space Storage (EXR, Rated “B”) at $85, a level it tagged last week. I estimate you roughly broke even on the trade, after dividends. These moves raised the cash position in each of your two model portfolios by 5%.

Meanwhile, I recommended four positions overall in July and August. Three out of four of them are working, with

recent gains of more than 2% on Paychex (PAYX, Rated “B”), 10% on ONE Gas (OGS, Rated “B”) and a whopping 19%-plus on Israel Chemicals (ICL, Rated “B-”). The other was a leveraged long position in bonds as a hedge, the ProShares Ultra 20+ Year Treasury (UBT, Rated “D+”).

You’ve profited from this demand for riskier paper via the YieldShares High Income ETF (YYY, Rated “C”).It has delivered a slight gain, including dividends, in your Dynamic Income Portfolio. But I think it’s time to jump off this train simply because I expect volatility and risk to be priced back into many markets ... potentially in a very big way! Go ahead and sell YYY at the market .

Bottom line: Outside of a handful of higher-yielding, lower-volatility stocks … and a few select plays in sectors like energy or utilities … I don’t see a whole lot to like in this market. But I do see plenty of reasons to exercise caution and play defense.

3

Barometer: Tiptoe, Don’t Run, with the BullsRemember how your elementary school teachers would always warn you to walk, not run? Well, the Weiss Ratings Market Barometer is going a step further. It says you should only tiptoe with the bulls.

One caution sign comes from the “Stocks in Bear Territory” indicator. It deteriorated from the levels seen both one month and one year ago. Treasury rate spreads also contracted from where they stood 12 months ago, while the Institute for Supply Management’s manufacturing and new orders readings slipped from September.

At the same time, we saw continued improvement in high-yield bond spreads. Industrial production is also perking up, and unemployment is headed in the right direction. In fact, the nation’s unemployment rate just hit its lowest level since 1969!

But (isn’t there always a “but”?) something interesting happened with our Buy/Hold/Sell data …

• The percentage of “Buy”-rated stocks went nowhere, holding at 13.8%.

• But the percentage of “Sell”-rated names jumped to 54.8% from 54.1%.

That’s a fairly large move for this data series . And it’s interesting that it happened even as markets were flirting with new highs.

When you add it all up, the data confirms what I wrote at the outset. If you try to run with the bulls, you might get gored like one of those people in Pamplona. But if you tiptoe – with a lighter portfolio and a nice cash reserve in your back pocket – you’ll make it through just fine.

Weiss Market Barometer

Indicator Type Name Last 1M 12M

S&P 500 Index

VIX Volatility Index

Commodities Index

Stocks In Bear Territory

Weiss Buy/Sell Ratio

High Yield Spread

Treasury Spreads 2/10 Year

Treasury Spreads 3 Month/10 Year

AAII Investor Sentiment Ratio

GDP

Leading Economic Indicators Index

Retail Sales

ISM Manufacturing Index

ISM New Orders Index

ISM Services Index

Unemployment Rate

Average Weekly Hours

Non-Farm Payrolls

Consumer Confidence Index

Industrial Production Index

Capacity Utilization

Building Permits

Housing Starts

Financial

Credit

Economic

l

p

p

q

l

p

p

p

q

p

l

l

q

q

p

l

q

l

l

p

l

q

p

p

l

p

q

l

p

q

q

l

p

p

p

l

l

l

p

p

p

l

p

p

l

l

2,923

11.5

200.5

59.3%

0.25

0.02%

0.26%

0.87%

1.16

$20,412B

111.2

$509B

59.8

61.8

58.5

3.9%

42.2

201k

138.4

108

78.1%

1249k

1282k

Key: p Improving q Deteriorating l Neutral

1,314

2,980

5,201

13.8%

31.4%

54.8%

%

%

%

%

%

%

%

MILDLY

POSITIVE

4

Bedrock Income Portfolio: This High-Yielding Permian Play Should Help Energize Your Portfolio

When you invest with an eye toward dividend yields, you face one constant risk: interest rate “shocks.” If rates spike sharply, it almost always hurts the value of higher-yielding stocks in sectors like utilities, staples and real estate. But you CAN take steps to mitigate those risks. For instance, because I anticipated some more volatility in rates, I recommended you bank 9.5% profits on WEC Energy Group (WEC, Rated “B+”) in September. I also recommended you keep your cash holdings in a bond ETF with very low rate risk – the iShares Short Treasury Bond ETF (SHV, Rated “C”) .

Now it’s time to energize your portfolio with an oil stock that’s leveraged to the U.S. production boom – Viper Energy Partners LP (VNOM, Rated “A-”) .

Viper owns oil and natural gas interests in the Permian Basin in western Texas. It leases that land to drillers who are responsible for getting resources out of the ground and to the market. The income this generates is used to fund generous dividends for its unitholders.

Right now, Permian production is booming thanks to new “fracking” technology. Just look at this chart from the Railroad Commission of Texas. It shows how we’ve gone from production of only 710,000 barrels per day of oil in 2008 to a whopping 2.09 million bpd this summer.

That growth is helping drive profits nicely higher. In the second quarter, net income came in at $99.4 million, or $1.35 per unit. That was up more than four-fold from $22.1 million, or 23 cents per unit, a year earlier.

It netted a price of $50.10 per boe/d of output. That was up from $37.64 a year earlier. Oil made up 71% of total production.

The combination of higher acreage, higher output and higher prices has resulted in much-higher distributions for income-seeking investors . Viper paid out 60 cents per share for Q2, a whopping 81% year-over-year increase.

That’s good for an indicated yield of around 5.7% at recent prices, and I have every reason to expect that payout to keep growing given trends in the Permian and the state of the energy market overall.

Finally, due to some tax law changes, Viper decided to convert from a traditional Master Limited Partnership to a corporate structure earlier this year. That means you don’t have to worry about complicated K-1 forms when it comes time to file your taxes.

My recommendation: Add a 5% position in VNOM at the market and hold all remaining positions . Or if you’re just coming on board, use the table below for guidance about what to do with previously recommended investments.

Bedrock Income PortfolioImage credit: Railroad Commission of Texas

ž

PositionTicker

SymbolWeiss Rating

Initial Reco Date

Purchase Price

Recent Price (as of 10/8/18)

Indicated Dividend

YieldTotal Return (incl. dvds.) Current Recos

Viper Energy Partners LP VNOM A- 10/12/18 TBD $41.92 5.7% BUY 5% position

Paychex PAYX B 8/10/18 $71.02 $72.84 3.1% +2.6% BUY 5% position

One Gas OGS B 7/13/18 $75.24 $82.55 2.2% +10.4% BUY 5% position

Pinnacle Foods PF A- 6/8/18 $64.49 $64.86 2% +1.6% BUY 10% position

ProShares UltraShort Financials SKF D 4/13/18 $19.58 $19.22 N/A -1.8% BUY 10% position

iShares Short Treasury Bond ETF SHV C 3/9/18 $110.25 $110.31 1.9% +1% Buy 25% position

5

Dynamic Income Portfolio: As Rates Roil Markets, Make These Moves Interest rates are roiling markets like we haven’t seen in ages, and that’s impacting several of your positions. So, here are the moves I recommend you make in your Dynamic Income Portfolio ...

1. In my Flash Alert from Sept. 19, I recommended you put a stop under Extra Space Storage (EXR, Rated “B”) at $85. The shares subsequently traded below that level, which should have triggered an exit. I tracked a roughly breakeven result.

2. The YieldShares High Income ETF (YYY, Rated “C”) was a nice dividend play for a while. But it’s now getting caught up in the bond market turmoil. I recommend you go ahead and close out this position as well at a modest gain.

3. You should have raised your stop on CorEnergy Infrastructure Trust (CORR, Rated “B-”) to $35.50 last month. It came very, very close to triggering that stop – but as of press time, it hadn’t officially done so. You have a nice double-digit profit on this one. But if it trades below $35.50, make sure you bank that gain and move to the sidelines.

4. The ProShares Ultra 20+ Year Treasury (UBT, Rated “D+”) clearly hasn’t worked out yet. Implement that “do or die” stop I mentioned in the main article at $65. In other words, if it trades below that level, exit.

5. Invest in two ETFs that are designed to make you money as interest rates go up. Specifically, add a 5% position in the iShares Floating Rate Bond ETF (FLOT, Rated “C”) and a

5% position in the WisdomTree Floating Rate Treasury Fund (USFR, Rated “C”), both at the market.

Just what exactly is a “floating rate” bond? Like the name suggests, it’s a bond whose yield rises along with market interest rates. That means every time the Federal Reserve hikes interest rates, the yields on these ETFs will rise by a roughly equivalent amount, with a slight time lag.

FLOT invests in U.S.-dollar-denominated securities issued by investment-grade corporations, with banks making up the largest group. That means there is some modest credit risk in the ETF, and why it sports a 30-day SEC yield of around 2.6%. USFR invests solely in floating-rate U.S. Treasuries, which Uncle Sam began issuing in 2014. That’s why the yield is somewhat lower at 1.8%.

Both ETFs feature rock-bottom expense ratios (0.2% for FLOT and 0.15% for USFR). Both offer sufficient liquidity and monthly distributions. And again, both will see their payouts rise along with each and every Fed hike that comes down the pike.

Once the interest rate situation calms down, I’ll look at some even-higher-yielding ETFs and individual stocks to help you profit. But in the interim, more tumultuous period, these are the kinds of investments that should deliver both a modest amount of profit AND protection against volatility.

Dynamic Income Portfolio

PositionTicker

SymbolWeiss Rating

Initial Reco Date

Purchase Price

Recent Price (as of

10/8/18)

Indicated Dividend

Yield

Total Return (incl. dvds.) Current Recos

iShares Floating Rate Bond ETF FLOT C 10/12/18 TBD $50.96 2.6% BUY 5% position

WisdomTree Floating Rate Treasury Fund USFR C 10/12/18 TBD $25.09 1.8% BUY 5% position

Old Republic International ORI A- 9/14/18 $22.82 $21.53 3.6% -5.7% BUY 5% position

Israel Chemicals ICL B- 8/10/18 $5.13 $6.10 2.8% +19.9% BUY 5% position, STOP at $5.10

ProShares Ultra 20+ Year Treasury UBT D+ 7/13/18 $78.05 $66.26 1.8% -14.8% BUY 5% position, Place STOP at $65

Getty Realty GTY B 6/8/18 $26.61 $27.63 4.6% +6.3% BUY 5% position

YieldShares High Income ETF YYY C 2/14/18 $18.77 $17.97 8.7% +1.3% SELL 5% position

CorEnergy Infrastructure CORR B- 6/14/17 $35.11 $35.84 8.3% +13.3% BUY 5% position, STOP at $35.50

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CHOLDiShares Floating Rate Bond ETFFLOT - BATSNAV Total Assets Dividend Yield Turnover Ratio Expense Ratio Closing Price Oct 05, 2018-- 11.24B 2.00% 21.00% 0.20% $50.96

RATING

Reward C Fair

Risk C+ Fair

NAV

1-Month Low $50.88

1-Month High $50.98

52-Week Low 12/21/2017 $50.82

52-Week High 8/31/2018 $51.00

PERFORMANCE

1-Month Total Return 0.19%

3-Month Total Return 0.70%

6-Month Total Return 1.34%

Year to Date Total Return 1.80%

1-Year Total Return 2.18%

3-Year Total Return 5.37%

5-Year Total Return 5.91%

Last Bull Market Total Return 1.80%

Last Bear Market Total Return --

Forward Dividend Yield --

BETA / STANDARD DEVIATION

Beta 1.06

Standard Deviation 0.30

ASSET ALLOCATION

Cash 4.89%

Stock 0.00%

U.S. Stock 0.00%

Non-U.S. Stock 0.00%

Bond 94.13%

U.S. Bond 94.13%

Non-U.S. Bond 40.24%

Other 0.00%

Preferred 0.00%

Convertible 0.98%ASSETS MAY NOT TOTAL 100%

Data is provided by Morningstar Inc. The information and statistical data contained herein have been obtained from sources we believe to be reliable. All research issued by Weiss Ratings, LLC is basedon public information. However, this information is provided to you on an “as-is” basis. Weiss Ratings, LLC, its parent company Weiss Group, LLC and all affiliates, officers, and directors make norepresentations or warranties of any kind, express or implied regarding merchantability, fitness for any particular purpose, accuracy, completeness or timeliness. This is not a solicitation to buy or sell anysecurity. Weiss Ratings, LLC, our parent company, affiliates, officers, directors, stockholder and any members of their families may purchase or sell any of the above-mentioned or related securities fromtime to time. Copyright© 2018 Weiss Ratings, LLC, all rights reserved.

COMPANY INFORMATIONProvider: iSharesManager/Tenure (Years): James Mauro (7), Scott Radell (7)Address: iShares, 400 Howard Street, San Francisco, CA 94105Phone: 800-474-2737 Website: http://www.ishares.com

INVESTMENT STRATEGYThe investment seeks to track the investment results of the Bloomberg Barclays US Floating RateNote < 5 Years Index (the "underlying index"), which measures the performance of U.S. dollar-denominated, investment-grade floating rate notes. The fund generally will invest at least 90% of itsassets in the component securities of the underlying index and may invest up to 10% of its assets incertain futures, options and swap contracts, cash and cash equivalents, as well as in securities notincluded in the underlying index, but which BFA believes will help the fund track the underlying index.

FUND INFORMATIONFund Type: ETFCategory: Ultrashort BondSub-Category: US Fixed IncomeProspectus Objective: Worldwide BondInception Date: Jun 14, 2011Open/Closed to New Investors: OpenMin. Initial / Subsequent Investment: None / NoneFront End / Back End Fee: None / None

SERVICES OFFEREDNone

TOP HOLDINGS

Ticker Rating Name Weight Market Value-- -- Morgan Stanley 3.12% 0.73% 82.24M-- -- Morgan Stanley 3.53% 0.63% 70.71M-- -- International Finance Corporation 2.4% 0.60% 67.06M-- -- Inter-American Development Bank 2.54% 0.57% 63.52M-- -- Goldman Sachs Group, Inc. 3.06% 0.55% 62.01M

PERFORMANCE

10/4/186/19/183/11/1812/1/178/23/175/15/172/4/1710/27/160.0%

2.0%

4.0%

6.0%

RATINGS DEFINITIONSC - Fair. In the trade-off between performance and risk, the fund has a track record which is about average. It isneither significantly better nor significantly worse than most other funds. With some funds in this category, the totalreturn may be better than average, but this can be misleading if the higher return was achieved with higher thanaverage risk. With other funds, the risk may be lower than average, but the returns are also lower. Although funds canbe driven higher or lower by general market trends, our "C" rating can generally be considered the equivalent of a"Hold" or "Avoid." A + or - sign is an indication that the fund is at the upper or lower third of the letter grade.Reward Rating - Based on the fund's total return over the last trailing five years and its prospects for future returnsbased on performance trends and economic factors.Risk Rating - Based on the level of volatility in the fund's daily and monthly returns and on the underlying stability, aswell as economic factors.

7

NASDAQ GSViper Energy Partners LP BUY A-VNOMMarket Capitalization Enterprise Value Dividend Yield Dividend Rate (TTM) 52-Week Range Price as of 10/05/20185.27B 6.16B 4.42% $1.88 $18.02 - $44.00 $42.50

RATINGReward A+ Excellent

Risk B Good

FACTORGrowth Good

Efficiency Excellent

Solvency Excellent

Total Return Excellent

Price Volatility Good

Dividend Good

PERFORMANCE 10/05/2018 Q2-17

3 Months 33.68% -11.21%

1 Year 135.29% -12.62%

3 Years 199.49% -43.61%

INCOME STATEMENT Q2-18 Q2-17

Sales 75.35M 36.62M

EBIT 54.87M 22.48M

Net Income 99.40M 22.15M

BALANCE SHEET Q2-18 Q2-17

Total Assets 1.32B 771.28M

Liabilities 353.06M 83.20M

Shareholders Equity 387.80M 688.08M

PROFITABILITY Q2-18 Q2-17

Gross Profit Margin 93.35% 92.03%

Profit Margin 131.92% 60.48%

Operating Margin 72.81% 61.38%

DEBT Q2-18 Q2-17

Current Ratio 23.68 9.50

Debt / Capital 0.27 0.11

Interest Expense -3.25 -0.64

CASH FLOW Q2-18 Q2-17

Net Cash Flow 14.74M -26.95M

Free Cash Flow -92.49% -245.81%

ST Debt Cove. Ratio -- --

Data is provided by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., as well as other third party data providers. The information and statistical data contained herein have beenobtained from sources we believe to be reliable. All research issued by Weiss Ratings, LLC is based on public information. However, this information is provided to you on an “as-is” basis. Weiss Ratings,LLC, its parent company Weiss Group, LLC and all affiliates, officers, and directors make no representations or warranties of any kind, express or implied regarding merchantability, fitness for any particularpurpose, accuracy, completeness or timeliness. This is not a solicitation to buy or sell any security. Weiss Ratings, LLC, our parent company, affiliates, officers, directors, stockholder and any members oftheir families may purchase or sell any of the above-mentioned or related securities from time to time. Copyright © 2018 Weiss Ratings, LLC, all rights reserved.

Sector: EnergySub-Industry: Energy

Viper Energy Partners LP owns, acquires, and exploits oil and natural gasproperties in North America. The company holds mineral interests covering anarea of approximately 43,843 net acres in the Permian Basin, West Texas. Asof December 31, 2017, its estimated proved oil and natural gas reservesconsisted of 38,246 thousand barrels of crude oil equivalent.

PeriodEnd Price P/E P/B EPS ROE

Revenueper

Equity

Debtto

Equity

Cashand

Equiv.Q2-18 $29.54 12.65 8.68 1.35 29.07 1.03 90.25 32.89MQ1-18 $24.29 20.05 3.12 0.38 16.94 0.55 27.11 18.15MQ4-17 $23.61 22.44 2.94 0.37 15.25 0.52 10.23 24.20MQ3-17 $18.05 20.80 2.26 0.24 11.74 0.39 3.90 4.44MQ2-17 $15.41 20.61 2.19 0.23 12.39 0.37 11.84 1.61MQ1-17 $17.75 52.08 2.50 0.22 5.77 0.35 0.00 28.56MQ4-16 $16.49 -- 2.64 0.18 -- 0.32 21.99 9.21MQ3-16 $15.88 -- 2.54 0.12 -- 0.24 9.92 7.76M

Oct '16 Feb '17 Jun '17 Oct '17 Feb '18 Jun '18 Oct '18$10

$15

$20

$25

$30

$35

$40

$45

VNOM

Q4 14 Q2 Q3 Q4 15 Q2 Q3 Q4 16 Q2 Q3 Q4 17 Q2 Q3 Q4 18 Q20M

10M20M30M40M50M60M70M80M

-200%-150%-100%-50%0%50%100%150%

Sales and Profit Margin

Sales Profit MarginRATINGS DEFINITIONS

A - Excellent. The company's stock has an excellent track record for providing strong performance withlower-than-average risk, and it is trading at a price that represents good value relative to the company'searnings prospects. While past performance is no guarantee of future results, our opinion is that thisstock is among the most likely to deliver superior performance relative to risk in the future. Of course, eventhe best stocks can decline in a down market. But our "A" rating can generally be considered theequivalent of a "Strong Buy". A + or - sign is an indication that the stock is at the upper or lower third of theletter grade.Reward Rating - Based on its total return to shareholders over the last trailing five years and its prospectsfor future returns based on sales, net income, earnings trends and economic factors.Risk Rating - Based on the level of volatility in the stock's daily and monthly returns and on the underlyingcompany's financial stability, as well as economic factors.

8

Q&A

Actions To Take

Question: I missed your Flash Alert when it came out. Can you recap your instructions for me?Answer: Sure. I recommended in the Sept. 19 alert that you bank gains on the remainder of your shares in WEC Energy Group (WEC, Rated “B+”), as well as put stops under Extra Space Storage (EXR, Rated “B”) at $85 and Israel Chemicals (ICL, Rated “B-”) at $5.10.

You should have pocketed profits of around 9.5%, including dividends, on WEC. Your stop on EXR was triggered, while your stop on ICL was not.

Meanwhile, we’ve just upgraded our systems to ensure you receive your issues in the timeliest manner possible. We’ve taken care of all the details on our end. But it would help if you bookmark a new email address just to ensure nothing gets blocked as “spam”: safemoneyreport@eml.weissratings.com.

Question: What will the Fed rate hikes mean for my personal finances?Answer: In this newsletter, I focus mostly on the investing implications of key market developments. That includes Federal Reserve interest-rate hikes. But clearly the Fed’s rate moves are having, and will continue to have, an impact on all kinds of other financial products.

When the Fed hikes rates, for instance, it causes the prime rate to move higher in lockstep. Some business loans – and most credit cards and home equity lines of credit – are tied directly to prime.

So, if you have variable-rate cards or a HELOC, expect the cost of carrying balances to keep rising. Rates on longer-term loans like 30-year mortgages follow yields on longer-term bonds.

Rates on longer-term loans like 30-year mortgages follow yields on longer-term bonds. They haven’t moved higher as much as short-term rates (the “flattening yield curve” phenomenon I’ve talked about before). As long as that’s the case, it’s not like every quarter-point hike from the Fed will instantaneously translate into a quarter-point move higher in 30-year rates. But upward pressure will remain unless bonds can find their footing.

Question: Are there any more upcoming events where we can meet up?

Answer: Yes! I recently confirmed my appearance at the New Orleans Investment Conference that’s being held in that city Nov. 1-4. This is a dynamite show that attracts premium talent.

Action #1: Buy a 5% position in Viper En-ergy Partners LP (VNOM, Rated “A-”) for your Bedrock Income Portfolio at the market. Action #2: Sell your 5% position in the Yield-Shares High Income ETF (YYY, Rated “C”) in your Dynamic Income Portfolio at the market. Action #3: Buy a 5% position in the iShares Floating Rate Bond ETF (FLOT, Rated “C”) in your Dynamic Income Portfolio at the market. Action #4: Buy a 5% position in the WisdomTree Floating Rate Treasury Fund (USFR, Rated “C”) in your Dynamic Income Portfolio at the market.

This year, the speakers list includes “Rich Dad Poor Dad” author Robert Kiyosaki, world-renowned market commentator James Grant, influential market economist Peter Boockvar, and many others – Dennis Gartman, Peter Schiff, Guy Adami, Nick Hodge, Robert Prechter and my colleague Sean Brodrick, our resident natural-resources expert, among them.

Personally, I’m participating in a Global Investing Panel that’s scheduled for 11:15 a.m. to 11:55 a.m. Central time on Saturday, Nov. 3. I will also deliver a solo presentation from 8:10 a.m. to 8:35 a.m. Central on Sunday, Nov. 4, and meet with attendees for a “Gold Club Q&A” afterwards. Finally, I’ll take part in a “Booms, Busts & Bubbles” Panel on Sunday from 10:35 a.m. to 11:15 a.m.

You can find out much more about the event, and register to attend, by pointing your web browser here: https://bit.ly/2Qr32vO. Or, you can call 800-648-8411 for more details.

I’m also excited to announce that I’ll be participating in the 2019 Money, Metals & Mining Cruise! The cruise sails from Ft. Lauderdale to San Juan. It’s scheduled for December 6 through December 14, 2019 on board the Crystal Serenity.

This event isn’t for some time, so I don’t have all the details for you yet. But I wanted to provide an early heads up so you could keep this travel opportunity in mind.

You can indicate your potential interest by calling the MoneyShow Cruise team at 1-800-435-4534.

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