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I want to respect the opinion of others about investing in Kinder Morgan partnerships ... but ... it still escapes why one would invest in KM stuff that yields 7% to 8% and has a strong sell rating and stern warning from one of the very best independent O&G analysts of the past 30 years (Kurt Wulff), versus owning Canroys where you can earn 11% to 14% or buying SJT (before this recent runup) where the yield is 10%+ --- and neither SJT nor Canroys have UBTI probelms when held in an IRA.
Speaking of Canroys, I am trying to buy NAV Energy today (NVGUF), a 57% NG Canroy, their major hedges expired in Dec, right now yields 14%+ for American investors.
Since I predicted SJT would trade in a range of $27 - $33 in 2005, anything I predict from now on has dubious credibility since SJT broke above $34 today.
My revised best guess is that investors will bid up SJT to a price that supports an 8% distribution level. Assuming SJT distributions the next forward 12 months are $2.80, that's $2.80/.08 = $35. I am probably wrong (maybe $35 is too low?), which would be great for me and the rest of us.
There is probably no poster on this board who is entitled to more respect than ic4x. His credibility is at the top of my list.
I understand his distrust or disinterest in MLPs, and it is certainly justified in many instances. On the other hand, my investments in MLPs have been driven primarily by tax benefits, increasing distributions, and stable cash flows. I hold KMR in an IRA for diversification, and because it beats bond funds for growth and income.
And, I still do not know why McDep even bothers to do any reporting on only one pipeline company and ignores every other MLP in the natural resources sector.
It's not really that I have anything against KM, it's much more the fact that you can buy high quality energy trust plays yielding 9% to 14%, which is more than any KM product is yielding to my knowledge --- and certainly with SJT, you get significant tax sheltering with its depletion allowance which is over 10% of cost basis for new investors, thus folks buying into SJT now have no current taxes to pay.
My problem with KMP is I bought back in 1995 as El Paso Gas which became KMI. I am in @ $15.21 for 2,000 share. I have not calculated it, but KMP has returned most or all of my investment plus real dividends for nearly 10 yrs !! I would like to sell since its price has not moved up in the past 15-20 mo. But I would owe the IRS bundles !!
I think I will let my 2 sons decide what they will do with it !!!!