The article is pretty well written. However, I think most investors are betting on a spike in oil prices which the article does not address. The article is written as though it were in a vacuum and does not take into account global issues or trends which are likely (in my opinion) to affect the underlying value of the asset base on which the trust in formed.
I believe a spike in oil prices in the next few years is pretty likely; either from increased demand or from fear of, or actual, disruptions in the oil supply as the lunatic mullahs in Iran seek to prove they are not irrelavent in the course of human events.... Otherwise, the discussion below by captaincrunch is okay - but again - captaincrunch doesn't discuss much about possible global events in his analysis either.
Global events, by their very nature are difficult to predict, which is what adds the element of chance to the price of MVO units. It is unfortunate that we must, as investors in MVO hoping for the price to recover, also hope for severe global strife....
Its a game of musical chairs. People buy in thinking they will get out before the inevitable collapse. Just look at WHX as an example of what can happen. I think that MVO is still quite a few years away from the WHX type collapse in stock price, but I could be wrong.
Well, this trust has 9+ years to go before it is terminated, if it is earning $3.00/year till the end date for the trust, that gives you potential earnings of about $27. Given its present price of $25, in my opinion it is fairly priced. Of course, if the price of oil jumps up that would justify a higher price; BUT it is likely that oil production will go down as the trust winds down and we will have trouble getting a $3.00 dividend till the 2021 (end of MVO). I would say that it is time to sell!
The trust ends in 2026 or after production of 14.4 million barrels of oil, whichever happens LAST.
In effect, a share of MVO is a barrel of oil, paid out over 20 years. Figure out the NPV on the revenue stream of the remaining life of this trust and you have the value of MVO.
Middle East turmoil and China/India growing demand can suddenly boost the price of oil and the trusts will pay out more. Buying the trusts in a period of pessimism is a smart move as oil prices never stay low.