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- joewxman
- a meteorologist with a knack for trading and investing in MLPS! I also like horse racing, enjoy cigars and a good port wine.
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3 comments:
There was some debate about the merits of HY over MLP's. I reposted this to try to keep the discussion lively and to see if anyone else had anything of value to contribute to the discussion.
High yield is a very attractive option for institutions. The poster obviously doesn't understand the nature of asset allocation. If an institutional investor can lock in 10% or more in a BBB or BB credit, they will take that over an MLP in my opinion (less volatility). See Citibank's research on the subject, there is a large correlation between High Yield spreads and MLP underperformance. The greater the spread on HY over Treasuries the greater the underperformance of MLP's. MLP's will suffer until this period of fixed income dislocation ends.
As always, just my 2 cents.
Fire away!
DS
Junk bonds are not an attractive option here.
MLP's are junk credit.Lless than BBB rated. Buying MLPs = buying junk.
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