I have been researching MSB for about a month now trying to get a a handle on how this stock works. I've read the history of the Trust and downloaded the Wells Fargo MLP and Trust Primer - all 146 pages of it (haven't read all of it yet ). I've talked to some very smart people about it. Not much help. And now I've come to this board assuming I might get some insight from people who presumably own it. I do not mean to be disrespectful, however, I've read many of your posts and have learned that most of you have no better idea than I. For example, did this stock just run up $8/sh this week just to capture the $1-plus distribution ??? Everything I have read suggests this is a one time event. Certainly next spring's distribution will be much smaller due to the winter seaway shut down. Possibly now is the time to sell or short this stock because the price will certainly fall after the distribution is paid and all the dummies flock to the next hot tip Jim Cramer gives them !!!
I realize most of you are income investors as I am, but this eight point move begs for profit taking. What do you think ?
<<price will certainly fall after the distribution is paid>>
That is not how it works.
The date at which the dividend is locked in is the Ex-Dividend date, which was yesterday. You can sell today and you will still receive the dividend if you owned yesterday.
Also, the next distribution in January typically pays out a large distribution, between half and two thirds the October distribution. It is the April Distribution that usually is low and only the April Distribution, due to ice in the Great Lakes preventing shipments.
"It's not who you meet - it's who you know!" I have family in Minnesota and they tell me that the Fugiawi Indians want to build and operate the states largest casino on the lands near or on the iron ore range and will pay major wampum to acquire this property - far more than MSB can get by proscessing taconite - This stock will go through the roof when the next legislature approves this deal -
>>>For example, did this stock just run up $8/sh this week just to capture the $1-plus distribution ???
Seriously? You dog people for not knowing the unknown?
>>>Possibly now is the time to sell or short this stock because the price will certainly fall after the distribution is paid and all the dummies flock to the next hot tip Jim Cramer gives them !!!
Then do it. You are capable of making a prediction. Just do it. Don't berate the rest of us for lacking perfect knowledge of the future. Buy low sell high. Short high cover low.
I mean to be disrespectful. You've TALKED to some people. You've READ some history. You've been RESEARCHING. Now you just want a stock tip like the Cramer-ites you are claiming to be better than (although, good for you, you want a better tip).
I'm holding. I think that over the years my investment here will go up and down from time to time. I think it will pay a solid yield at my cost basis (over $30, not sure exactly). I think the demand for iron and steel will not go away, although there will be higher and lower demand from time to time.
You want a tip: Buy two weeks ago. Sell now. You can't lose. Or if you feel certain that it will be lower next spring, short now and cover then. Everyday the market has a price you can exchange your stock for money at. If you think the money is too good to pass on, then take it.
I'm disappointed that anyone would start from a premise that they are researching a stock, and end on such a purely market TA speculation. That isn't research. Research should help, or you should stop looking at a stock. If research has been inconclusive and no help, then move on ... don't just decide that you must take a position, and even more that you must look at the stock price history and draw a conclusion about where it is going next.
Market timing is a wonderful thing. Go for it. But it is market timing, not research and investing. I've certainly done some swing trading. I mostly make money for Scottrade. I've got a trading account, and I recently looked and over 8 years I've made over 2000 transactions ... over $14,000 in fees, and with the recent market swings, that is more than I've made in that account, although I am up. My best results are better in a more buy and hold Roth IRA.
I have a core position of 5,000 shares in MSB in an IRA that I bought only for the distributions and have not reinvested any of that money back into MSB. I also own MSB in another IRA that I periodically flip or hold for a while. I bought the original 5,000 shares from 2001 to 2003 and my total cost was $18,995.75 for an average cost of $3.7992 per share, from the time I purchased those shares until the last distribution (8/20/11) I've received $63,752.00 in distributions from those 5,000 shares. Of course the prices varies all over the place, the 52 week range is 18.85 - 57.94.
It was pure luck that I purchased MSB in the first place. I've owned GNI since the mid 70's, which is also a royalty trust and while reading the Yahoo board on GNI someone mentioned MSB so I read all the postings and decided to give it a go and it was my best decision. My original cost for GNI was around $10.00 a share and in 2008 it hit $145.91 a share, currently its price is $103.00 which in my opinion is much too high since GNI will stop trading in April 2015.
<<For example, did this stock just run up $8/sh this week just to capture the $1-plus distribution ??? Everything I have read suggests this is a one time event. Certainly next spring's distribution will be much smaller due to the winter seaway shut down. Possibly now is the time to sell or short this stock because the price will certainly fall after the distribution is paid and all the dummies flock to the next hot tip Jim Cramer gives them !!!>>
The seasonality of MSB distributions is very predictable. If it resulted in a predictable seasonality in unit price, don't you think there would be a hedge fund out there buying up MSB shares when they're "cheap" and selling them six months later when they're expensive? If you look back over 10 years, unit price in December has about even odds of being higher than the unit price in May.
The annual performance of MSB is very predictable - they're going to ship ~5M tons; the average royalty rate is going to be 6.5%; ore price is not going to vary much more than 10%, if any. (2010 they shipped extra to make up for 2009's shortfall, but there was a macro-economic collapse contributing to that)
If you keep that annual performance in mind, you will find occasions where unit price is clearly out of balance. This year, like last year, they're going to pay a total a little north of $2. $20 units, with a more-or-less certain $2 distribution are clearly underpriced. $50 units (Dec 2010) are equally clearly overpriced. But neither of those conditions is really sustainable for long because the fundamentals are just too clear. And there's no management to divert earnings into inflated bonuses.
I know there's traders out there happy to swap in and out of a company for a few percent one way or another. It's a fine strategy for them, I'm sure, but I haven't the energy. As I have cash become available for investing, I try to choose among the dozen securities I follow which is currently cheapest. Once every few years, when something looks outrageously priced, I'll sell some of it and distribute. This turns out not to be very far from maintaining a constant balance. I have no illusions of making a killing and quitting my job, but I have every expectation of retiring a little early with confidence.
The best time to buy MSB is a couple of quarters after the mines are shut down due to a supply demand imbalance in iron ore. That was a couple of years ago. I bought in at 10 and later at 19. Lately I've been selling calls after upswings and out of money puts after price drops and doubling the rate of return. Good luck finding someone smarter than you who will give you the info you need to direct your decision. My current vacation in France is being funded by the option premiums. Leaving the distributions for other purposes. Bon jour.