MASTER LIMITED PARTNERSHIPS

Tuesday, August 05, 2008

Approaching a 5 point loss on the MLP index.

6 comments:

Anonymous said...: and the dow pushes for a 300 point gain...wonderfuckingful...; 8/05/2008 2:50 PM
Anonymous said...: There is just no floor under these pieces of shit.; 8/05/2008 2:51 PM
Anonymous said...: Maybe we can find some buyers at a 20% yield!!!; 8/05/2008 2:53 PM
Anonymous said...: MLP's are just financial sinkholes or stinkholes, if you prefer...; 8/05/2008 2:56 PM
Anonymous said...: Cramer on TheStreet.com...

Does it even matter to the sellers that Freeport-McMoRan (FCX) has lost 25% of its value in a week? Does it matter? Is the chart more important, say, than the earnings power? Than the possibility that the company could make a lot of money? Do the sellers at this point even care? Are they so motivated to get into Procter & Gamble (PG) and JPMorgan Chase (JPM) that there is no price they wouldn't sell at?

I am aghast at this price decline, all based, of course, on the endless cliche of demand destruction. But does it make sense, in a world where copper production is declining faster than oil worldwide, that this company loses a quarter of its value overnight? Did someone expropriate its mine? Did it preannounce a terrible quarter just now, and no one told me? Is it a bank stock with lots of home-equity loans? Is there a price where it represents some value? Was FCX just one big short squeeze?

I have to wonder about this incredible decline, because the company now sells at 7 times next year's earnings and, no doubt, judging by the sellers, is going to 6 times in a hurry. It is certainly possible that the earnings estimates are too high, given a worldwide recession, but 30% of the world's copper goes to China, and unless you think that China is going into a recession, it is hard to fathom the 25% decline in a week's time.

In fact, it is more likely that the owners were looking at the chart, and the chart says top, and that's enough for them. Maybe that's enough.

Doesn't matter that Chile is producing less. Doesn't matter that the African copper mines are producing less. All that matters is that chart.

And the chart says lower

Sounds like MLP's also...; 8/05/2008 3:23 PM
joewxman said...: Cramer really has sized it up perfectly. And there are no buyers. People right now see the word energy or commodities and it translates to sell no matter if earnings are up..no matter if distributions are getting raised quarter after quarter. Nothing matters.

Down 5 plus on the mlp index.; 8/05/2008 3:26 PM

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