Down 8 and half points on the mlp index. Oil down 5.75. Nat gas tanking as well.
Ugly out there.
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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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22 comments:
No comments all day??? Has everyone killed themselves?
Not much too say...Have fundamentals in our sector changed so much as to warrant this destruction?
Dow now +95 and MLP's stuck in the dumps. Just horrible relative performance from the MLP's the last few weeks.
could be the only guys still breathing are out on the ledge and can post.
Only time will heal this mess. We WILL NOT have a V shaped recovery. This is going to be a long drawn out process. Its disgusting and we still have alot of jungle to chop through.
It is a shame that we cant get someone on this blog that is a large holder to give us his perspective. I would really enjoy hearing that. We need some old timers to weigh in.
I will give you a tip, had 750k in mlps, sold most in nov 2006.
its the credit / sub prime crisis
and mlps need credit to grow
old timer
$750K is not large...
i did not say it was LARGE but it not small for the average mlp investor or to have that sum in just one sector
if you think 750,000 is small,
what do you have in this rubble?
Is there any EVIDENCE that MLP's are unable to access credit? I have not read, heard or seen anything that says yes. There may be a perception, but it is not reality (yet).
The hysteria surrounding MLP's and the ability to raise capital is laughable. Doesn't every company in America need the ability to raise capital? I understand MLP structure (so lets put that aspect aside). Capital is the lifeblood of capitalism, why does everyone seem to think that the spigot will be turned off only for MLP's?
There has never been an MLP default which I am aware of. Even during the Enron meltdown MLP's paid increased distributions.
What we have is an old fashioned panic and in a panic distressed players sell everything, both good and bad.
The Fed will cut rates again tomorrow, by at least 50bps, maybe nobody cares that the average MLP yields over 8% now. At some point, real investors will step in and we'll find a bottom to build from. Right now it is just chaos.
ok its just panic seklling, not credit crisis
these mpls are rated by s& p just like other companies. do you thing they have aaa ratings
if you do, think again and call the companies you own and you will see they are not aaa. the market is looking for"safe" places to invest
These are still great long term investments. I'm not sure how many long term investors actually post here.
Well, I had 370k invested in an MLP hedge fund - quite a good sum to me.
I sold in November taking a 50k loss.
The fund has since dropped another 25%, so maybe I am lucky.
I still think the MLP sector is worthwhile, but will wait until the turn comes.
Any investor worth his salt, would think it tacky to say 750k is a small sum.
we have all taken hits in 2007/08, 350k is a fair sum, lucky you made the move and sold. it would take years to get that money back after this recent sell off.
i like mlps but there is a lack of confidence in general in mlps and in credit markets/investments at this time. add to that mlps trade very thinly with wide spreads. that makes it hard when more sellres are out there.
The access to credit has not been an issue for MLPs and is not an issue currently. EPB was able to raise $500mm in a difficult market in November 2007, and WMZ was able to price in the middle of the IPO range in late January 2008 (at a time when nobody else would have dared price equity). Last week OKS and DPM both issued equity.
The MLPs that rely on accessing public debt markets on a regular basis are the large cap "blue chip" MLPs like EPD, PAA, OKS, etc. Most of the mid-cap and small-cap MLPs rely on revolving credit facilities and term loans, which, once established with creditors, are not dependent on accessing public markets.
An important distinction to keep in mind that it may be perceived that the issues with the credit markets are affecting the MLPs, and this may be influencing possible MLP buyers and driving down stock prices. However, the ambitious capital programs announced by most MLPs (EPD-+$1.5bn in 2008, OKS-$+1bn/yr through 2009, KMP-+$3.3bn in 2008, to name a few) show that these MLPs are not concerned about liquidity.
The more likely scenario is that MLPs (or more broadly, small-cap relatively illiquid names across the stock market) are getting crushed right now as major institutional players and small individual investors alike flee from one investment to the other in a blind panic.
...great post, thanks.
ok mlps can get funding, that in itself is not the issue but going forward at "what cost" as credit risk spreads get wider by the second
IMO,Doesn't matter how much moncy a person has invested in MLP's. One persons opinion is just as good as another. Just take a look at the hedge funds blowing up to illustrate that point. I had $5M in MLP's last year. Dumped out last year near the peak and took a big hit trying to find a safe haven. Lessons learned? everything declines in a bear market and it teaches one to be humble. Anyway, I'm back in. At these prices, IMHO, they're a steal. One is well rewarded for waiting till prices recover
Funny, investors (like me) always willing to buy at the top but, not at the bottom.
...agreed, very good value here.
It's incredible that there are so many geniuses on this blog that managed to sell before the flop...
i did sell before the flop in dec 07 but still lost money in any event, just that it was less money then the steep drop of these past months in 08.
i bought muni bonds at that time, and they took a hit due to the hedge fund sell of.
what is safe, i dont know.
still hold the munis
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