I follow two newsletters closely right now... one is "MLP Profits," written by Roger Conrad and Elliot Gue. Its focus is solely MLPs. the other is "Sound Advice," written by Emerson Gray Cardiff. His focus is broader, his analysis seems very sharp and his recommendations (F-S, HRP-D) have been very successful for me.
I also see "The 12% Letter" now and then. It's written by Tom Dyson, and several of his recommendations (OKS, O and IWA)have done very well for me.
It was in "The Oil Report," written by Mark Badiali, that I first learned of MWE and invested heavily at what turned out to be a good time.
Hope this helps.
I do not know if your question is directed to "lanewsboy" or me ("Sooner"). However, I will respond just in case your question was directed to me.
"What investing newsletters do you subscribe too?"
I do not subscribe to any newsletter. I bank with RBC Dain Rauscher. The RBC MLP analyst is Mark Easterbrook. I receive all of his communications. In addition, I periodically talk to him. Mr Easterbrook is very solid.
Also, I rely on my approx 30 year oilfield career (my life prior to becoming an investor and small businessman).
Thanks for the breakdown of MLP risk. Seems to make good sense to me.
Thanks also for your kind words, but I am not even in the same league with you or the other sage MLP investors whose posts I try to absorb. I have been mainly lucky in my investing.
When I retired 10 years ago, I shifted from being a decades-long mutual fund investor to an income-producing stock investor. It's been much more fun, and I have had good results.
I came to MWE, and MLPs, about 18 months ago thru several investing newsletters that I subscribe to. Two of them focused on MWE at the same time, their rationales made sense to me and I jumped in and bought in chunks for several months. It is by far my biggest single holding, at a low basis.
My MLP strategy is very similar to yours. I am trying to develop a portfolio that balances conservative holdings (e.g.,EPD, KMP, MMP, GEL, SXL, SEP, OKS, BWP) with more aggressive companies (MWE, NGLS, VNR, CPNO, LINE, LGCY, EVEP, ENP). In this way,I hope I can balance risk/reward.
You asked about propane and shipping. For propane exposure, I chose NRGP, the GP of Inergy, the No. 4 propane company; my shipping choice is TGP, which has long-term contracts for its ships. So far no coal for me. But who knows?
I don't have any independent knowledge of MLPs, or business, for that matter. And I don't have much of head for numbers, I've been a word guy my whole life, so financial analysis, past the very basics like DCF, is beyond my ken. I rely on advisors in my investing, and try to choose them carefully. So far, I've been lucky, both in my timing and my choices.
You asked about other stocks: over the last couple of years I bought REITs and REIT preferreds (HRP, Duke-O, O, O-D), banks (BAC-H) and financial services (AEH). And I took a flyer on a Ford convertible (F-S) that has been my biggest winner so far.
Thanks for your sharing all your knowledge, and apologies for my over-long reply.
Thanks for the kind words. I enjoy your posts also.
I own KMR instead of KMP. KMR has the same economic interest as KMP except KMR "pays" a dividend in additional shares instead of cash. KMR has been trading at a discount to KMP, and I am not aware of any reason for such discount. I am currently accumulating the "dividend" shares, but have sold such shares in some prior quarters.
I own NSH instead of NS. NSH is the GP of NS. NSH trades at a slightly lower yield. Owning NSH is just a way to own NS, but with slightly more risk, offset by a faster rate of distribution increases due to IDR's.
Good to see you here. I have been impressed by your posts here and on the IV board. It is encouraging to see smart investors like you investing in some of the same entities as me.
While I have 100% of by public investments in MLP's currently (about 67% of total assets), I have tried to invest in lower risk MLP's as somewhat of a counter balance to the lack of diversification risk.
I have banked with RBC for many years (back to the days when it was Rauscher Pierce). Mark Easterbrook is the pipeline MLP analyst at RBC and I have followed his work closely.
Mark rates MLP sub-sector risks from least risk to greatest risk as follows -
(1) NG pipeline, (2) crude oil/products pipeline, (3) shipping, (4) coal, (5) propane, (6) gatherer & processors, (7) upstream.
I support this generalization. It is noteworthy that it seems hedging increases as the MLP sub-sector risk profile increases. Coal is generally sold under long term contracts (a form of hedging), propane is a "margin" business, and the G&P's and upstream MLP's extensively hedge.
Naturally, the GP MLP's have a higher risk level than the underlying MLP.
I have never owned a shipper, but I am interested in learning more about then. My upstream exposure is limited to KMR, which is increasingly becoming an upstream MLP. My propane exposure is through ETP and ETE, but I have considered more propane exposure.
However, for me, the NG/NGL and crude/products (regulated) pipeline MLP's provide terrific risk/reward profiles. I especially like the NG/NGL pipelines.
On another note, the MLP's without GP's (no IDR's) have higher risk than those MLP's in the 50% IDR stage. Entities like PAA, BWP, KMP, WPZ, OKS, EPB, and NGLS have strong GP's that provide support when necessary or appropriate (I also should include EPD and EPE since Dan Duncan personally provides support).
Accordingly, MWE and CPNO are my two riskiest MLP's due to (1) no GP, and (2) operating in the gathering and processing space. While this places a high level of risk, it also means a high opportunity for return.
My current holdings are -
GP's - EPE, ETE , NSH, PVG
No GP's - MMP, MWE, CPNO
MLP's - EPD, ETP, KMR, OKS, EPB, BWP, PAA, WPZ, NGLS
I plan to hold substantially all positions through 2010 and probably 2011. I will seriously re-evaluate when the energy business is "hitting on all cylinders" again. I expect that even when the energy business hits a new cyclical high, I will stay substantially invested in pipeline MLP's
I am interested in your holdings and other asset classes (non MLP's) in which you are invested. I am particularly interested in your propane and shipping MLP's.
Jim aka Sooner
Hi there. I've enjoyed your MLP posts over the past couple of years and I wanted to ask about your perception of "risk" in MLPs. i own MWE and NGLS, too, as well as about 15 others, up-, mid- and downstream, propane, shippers.
What are the riskiest MLPs, in your view?
Thanks, Dick aka LANewsboy
SEC rules require they wait until market closes to announce equity offerings so there is time to properly determine the dilution and lower stock price rather than allowing investors to drive down stocks they think are collapsing for some reason.
There are plenty of hedge fund scumbags that would use the opportunity to gin up fear and drive the stock down quickly and scare investors out of the stock.
That is why such announcements are done after market closes.
This is the lowest cost of equity fund raising Targa has been able to do which is good news for everyone that bought their shares at much lower prices since it will fund growth.
The recent fractionation agreement with Oneok is a big accretive transaction on its own. The returns on this agreement are huge and Citi expects Targa and Oneok to leverage each other's operations by entering into future fractionation agreements because their mutual assets are in the same areas.