Kinder Morgan Energy Partners, L.P. Message Board
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diversification
I have a general question that I would like to hear some opinions on from this board. How important is it really to hold several MLPs to be "diversified." It seems to me that you could just hold one MLP like KMP or EDP and be totally safe for the long term. KMP and EDP have such a large role in the pipeline business, I just can't see any real investment risk. Am I missing something? I would like to hear any opinions or thoughts on this. Thanks.
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The gain does not have as much upside but your risk is spread out
- 1 Reply to lavierc
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Look into TYG which is a CEF of MLP stock. Many MLP'S in this fund will diversify you in the energy sector of MLP'S. I'm long KMR and TYG and TPZ, which pays monthly. Good luck.
Sentiment: Strong Buy
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People might have said the same about Enron.
Not saying KMP or EPD are like Enron but the answer to your question should be obvious.
"I just can't see any real investment risk."
There are huge number of risk factors, many of which are not even company specific (for example changes in tax law).- 1 Reply to lizahuang54321
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There would not even be a KMP if Kinder had not left Enron.
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I meant EPD, not EDP.
- 1 Reply to tomcypert
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Diversification requires uncorrelated assets, no matter how they are held. Why not KMR instead of KMP?
Sentiment: Buy
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