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Ship Finance International Limited Message Board

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  • marklibera marklibera Nov 21, 2011 2:54 PM Flag

    Mr. Stagg- EVEP still falling out of

    Susan, what you post is false concerning EVEP's earnings. Here is their latest report.

    As you can see, they earned $2.44 for the recent 9 months and paid out $2.283 in distributions. Those are the facts. But as I said, GAAP earnings do not matter with MLPs. Why distort the facts to try to prove your point? You have a habit of doing this which detracts from some of the other points that you make.

    Now on LINE. Here is a comparison of LINE and EVEP. As you can see, EVEP has kicked its butt, but as I said, past performance is not a guarantee of future performance.

    You say "why buy a stock yielding 4% when you can get double the % return on many others." The answer is that yield is only part of the story. The highest yielding stocks don't always do the best. IVR is one of the highest yielding stocks today, but it is extremely risky. You get that, but then you try to make these penny-wise, pound foolish comparisons to other MLP sectors. Was Apple a bad investment when it was under $200 and yielding 0?

    As I have said over and over, the play with EVEP is the monetization of the Utica. I understand your mistrust or distrust of any fundamental analysis. You believe that the whole system is rigged and the entire economy is going to collapse, or at least go back to S&P 400 before you buy. It could happen, but until it does, you can't say it is truth. You would be completely out of the market if you believed that was the case, or only buying puts instead of selling them as you do.

    EVEP sold off, but its potential is still large. Most other stocks are selling off now. When I entered my post, LINE was down more than EVEP. I made my post to prove that your posts are just snapshots in time and don't signify anything about the relative strengths in the stocks you compare. Your fallback argument is always about yield comparisons or switching gears, about option strategies that produce a better return compared to MLP yields. apples to oranges.

    As for selling EVEP or selling covered calls, hindsight is always 20/20. Those who invest in MLPs know that they are not made for trading because of the tax implications. Yes, selling covered calls can add to one's return, and I have done it on some positions, but it also can cap your return, and on a stock like EVEP with valuations exceeding $100, not to mention oil prices increasing, I didn't want to cap my potential return. However, I am warming up to your put selling strategy, but instead of executing like you suggested a few days ago (you do remember that you said to sell the Mar $55, which would be a losing trade now) I am waiting until this current downdraft ends.

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