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Monday, November 10, 2008

Down 125 on the down and 2 and change on the mlp index as we head into the last hour. The abyss awaits. ANYTHING that is percieved at risk for a distribution cut is being tossed out the window.
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5 comments:

Anonymous said...

I think it is completely assinine to sell mlps today based on perceived distribution cuts.

1. We just had earnings and distribution announcements within the last few weeks. So we will have no "news" on that front for 3 months.

2. Anything can happen in the next 3 months. If oil or natgas go up 20% from here, I doubt we'll hear anything about cuts.

3. This selling is nothing more the the hedge fund selling vortex which we have been living through for months now. Follow the volume and you'll see the hedge fund footprint.

4. Determine your investment horizon before entering a trade. Are you an investor or a trader?

5. Ignore the analysts. None of them have been ahead of the curve here. They had buys on everything 50% higher and now they are going to holds and sells. Ignore the noise. They are idiots.

11/10/2008 3:13 PM
Anonymous said...

AMEN!!!

Bruce

11/10/2008 3:17 PM
Anonymous said...

At what point are distribution cuts factored in? Take AHD as an example. Price 8.25 Dist $2.04 Yield 24.75%. If they cut the distribution 50% to $1.02 it would yield 12.36% in an environment of 1% fed funds and 2% CD yields. Would that be an unattractive investment?

At some point it will no longer pay for GP's to be public entities, as BGH has recently shown. I think most GPs will disappear within a year.

11/10/2008 3:19 PM
Anonymous said...

An interesting highlight from the APL call the other day was the CEO stated that raising the distribution made no sense at this point because the market didn't reward the stock price as a result. I agree completely. Might as well keep the capital in the bank.

11/10/2008 3:27 PM
joewxman said...

"At some point it will no longer pay for GP's to be public entities, as BGH has recently shown. I think most GPs will disappear within a year."


Assuming that they don't go to zero first!

11/10/2008 3:39 PM

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