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Kinder Morgan Energy Partners, L.P. Message Board

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  • lizahuang54321 lizahuang54321 Jan 30, 2013 6:24 PM Flag

    Thank you KMP for the COPANO acquisition

    KMP has a predictable rising distribution.
    CVRR will pay a high yield initially but is not sustainable long term. At some point the distribution will fall (can even go to zero for some quarters) and the unit price will likely crash.
    Many retired investors don't want that kind of investment, even if it pays well for the first year.
    Look at the history of refiners - they epitomize boom and bust. You are buying during the boom (when prices are high), the bust will come although maybe not this year.
    It's like buying internet stocks in 1999. They could go higher for a while but eventually they crash.

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    • "You were a Johnny come lately."
      Johnny come lately? If you think that, you are clearly the Johnny Come lately around here as I have been one of the most prolific posters on all the MLP boards for many years and just about everyone on the MLP boards knows it..
      I've been invested in MLPs for many years and have several million $ invested in the sector.
      I'd be willing to bet I have more knowledge on them than you.

      As for buying MLPs when they were disasters (assuming you mean 2008-9) you are really proving my point. That was a great time to buy when everything was collapsing (I was buying heavily then too). In contrast the refineries are at the top of their boom cycle and current distributions will not be sustained.
      In 2008-9, yields were high because the financial system was on the brink of collapse and everything was being liquidated indiscriminately. By contrast the current very high yields on the new refiner MLPs are due to current payouts being unsustainable and also to compensate for much higher risk than the traditional MLPs (these are single plant companies and one big fire - quite common in refineries - and the distribution gets cut to zero for an indefinite period and the unit price drops maybe 75%). That's why they have a very high yield.

    • "Last time I looked everyone needs energy."
      They do, but refiners do not always make a profit.
      Do yourself a favor and study the history of refiners.
      It's only a few years ago they were all disaster investments.
      It's a cyclical industry and they will bust again (for example if WTI oil price spikes).
      Right now they are in a boom, so buying here is buying at the top of the cycle (like buying internet stocks in 1998 - you got one more year of profits in 1999, but those who didn't cash out before 2000 got killed).

    • Funny, I bought all my MLP's initially when they were what you call "disasters," they were paying 22-25% distributions and the reason I bought ? " Everyone needs energy." You were a Johnny come lately. Maybe you should take your own advise and study up.

    • Apples and oranges. Buying internet stocks in 1999 with no sales, no product and no revenue is not the same as buying energy, Last time I looked everyone needs energy.

 
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