Some of the "better" looking charts. We should have sold our holdings last year and moved into Sunoco Logistics (SXL) and we would have actually made money! BTW i have noticed that a number of other mlps are on the verge of breaking out of 6 month base formations. It could be that we are setting up for that to happen in the next rotational correction of the overall market. Just a thought!
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I raised an issue on this blog well over a year ago. This issue was that MLP's are more like high yield credits and not equities at all. My hypothesis was that MLP's are hungry consumers of credit and need ready access to liquidity, similar to junk rated credits. While we focus on moves in the DJIA, Crude, NatGas, etc. we should focus on the high yield market and its impact.
http://finance.yahoo.com/q/bc?s=%5EAMZ&t=2y&l=on&z=m&q=l&c=hyg
That is supposed to be a chart comparing AMZ with HYG. The Alerian Index versus HYG (a high yield ETF) over a two year period. Very tight correlation.
Joe maybe you can recreate the chart and post it to help me make my point.
Thanks.
Not that I put much personal emphasis on technicals, but NRGY is again bound by an upward price of $22.30, the recent offering price and at the moment there is a large block for sale at that price. If I had to guess, I would guess that soon that block and others like it will taken out and the price will go higher.
steve
16000 SHARES sitting there are 22.30
Just another stray thought: If we get to the point where the credit markets allow MLPs to go to the well, will there be a steady stream of companies doing so? Will the prospect of industry-wide funding demands (and the resultant dilution) depress unit prices for the foreseeable future? For example, three majors, KMP, PAA and NRGY have recently been able to complete unit sales. The share prices of all three have been flat to down since. That is quite remarkable to me given that the fundings have already been completed and that the market has been up so much.
I hope everyone has a nice weekend, notwithstanding what seems like constant nitpicking on my part. I apologize for that and wish I didn't have to do it.
Thanks, Joe for all you hard work in running this blog. It is the best of several that I peruse.
steve
Steve i tend to think that yields are so out of whack still that the normalizing process of yield spreads could take a long time..perhaps a few years. Demand for shares will i think under those conditions causes unit prices to rise in spite of secondary share sales. Its a long way down from 10-15% to something resembling 3 points above treasuries.
Also remember that there are still alot of issues under 10 bucks that will probably avoid going to the well at any cost. Those companies at least won't be adding to supply.
Thanks for the compliment Steve. Its more fun to blog when shares are going up!!!
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