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Friday, August 22, 2008

Yesterday's correct MLP index close is 268.37 or thereabouts...a 264 quote appeared @ 5:30pm last night which accounts for showing a 4 point gain (if only). Instead we opened up 1 point and pulled back a touch from there. Still a good showing with crude falling. Looks like the overall market tape will be the tail wind today.

9 comments:

Anonymous said...

Anyone notice that GPs are doing worse--on a relative basis--than their respective LPs? The spread in yield between them looks to me to be about as close as it gets. Yet some of the GPs have distribution growth rates which are DOUBLE that of their respective LPs. They also have more leverage which is probably why the spread is so narrow.

Bruce Sherman
Oakland, Oregon

Anonymous said...

Bruce,

GP spreads are at all time highs and it makes no sense at all. We just have to keep weathering the forced selling storm. I have been a buyer of ETE on pullbacks. GP's are clearly misunderstood by the "average" investor.

Mr. Pipes

Anonymous said...

Hi, Mr. Pipes,

I have also been buying ETE on pullbacks as well as MGG.

When the market starts to value distribution growth--rather than simply current yield--these should pop back nicely. I plan to hold these for a loooooong time to fully take advantage of the income growth.

Bruce

Anonymous said...

With both EPD/EPE and NS/NSH you could have the GP yielding more than the MLP by the end of next year. Its a strange world...

Anonymous said...

We should be aware of the continuing Lehmann effect on MLPs. The fact that some kind of deal is in the works with a Korean Bank may account for some of the better action in MLPs the last few days. But, if that deal falls through and Lehmann has to continue liquidating to stay afloat, we should not be surprised by that. A pox on Lehmann's house.

Steve

Anonymous said...

Here is some data on MLP's vs. GP's(courtesy of Merrill Lynch)

1 Year Total return

BPL -16.2% BGH -42.0%
ETP -19.1% ETE -19.7%
EPD + 2.0% EPE -27.4%
MMP -15.0% MGG -23.6%
NS -15.9% NSH -40.9%

Shockingly bad performance by GP's

Mr. Pipes

Anonymous said...

Will Fannie and Freddie survive until Monday?

joewxman said...

Lehman's got to go. I think you are correct on the better MLP action this week just as the lehman story on a possible takeover begins to hit the press. These guys really have no choice here. Its either get something or let the fed do it and get nothing much.

Anonymous said...

I thought falling crude was good for NS?