The price went down giving us a buying opportunity of course.... but thats not where Im going here.....one of the things about MLPs that always made me nervous is that despite my accounting background and working in the securities industry for decades, i always viewed the accounting disclosures by MLPs under GAAP to be about as clear for me to decipher as hieroglyphics. The fact some have questioned KMI's accounting and then have the likes of GOLDMAN SACH research put KMI on their conviction buy list, gives me additional reassurance that the accusations of "creative accounting" would have been investigated and discounted. I did as much due diligence as possible myself before making my investment and was comfortable the Barrons negativity was unwarranted. Im not a Goldman fan for other reasons, but recognize they have the bucks to hire the brightest people coming out of business schools today to work in their research dept . I know from personal experience they have been successful in using that research as a club to get other very profitable business. A miss on KMI AFTER others had warned of seeing smoke would be a huge black eye to them. Whoever did the research at GS would have certainly been warned about that from the "upper execs" in the research dept whose bonuses depend on not having a major snafu....
Do you really believe Goldman or any firm cares about one research call, it could also be that they had been buyers for weeks or months and are concerned that the market internals are getting worse by the day and are looking to lighten up across the board Just look at the big banks other then wells the charts are ugly not to mention the signal the bond market is sending, Buy the dips sell the rips on this one.
I have been following this company and other MLPs on a professional basis for more than 10 years.
What was obvious to me about the original Hedgeye piece and then the Barron's article were two things:
1) Hedgeye did not come up with a SINGLE thing that other professional investors did not already know, and
2) The Hedgeye "analyst" was not even out of high school when I started looking at these companies. He has a basic misunderstanding of how the company is operating. Yes, the GP (KMI) has a substantially better position because of the IDR's and their "high splits" (i.e. 50%). But it has been that way from the beginning.
Furthermore, there is no comparison to :Enron." KMI/KMP and its related companies are real businesses, with real assets, run by real entrepreneurs, and the assets generally have LONG track records of generating profits and free cash flow. The company does some trading, but that is not the core of the business.
Yes, the decline in KMI equity because of these Bozos has enticed me to add a 5% yielder where the dividend has pretty much been increased almost every single quarter. I thanks them for their error, and I intend to capitalize on the combination of their error and my knowledge.
I think what might be a bit more important here is that the Hedgeye and Barrons ops had an Enron feel to them. If Goldman missed a call that later turned out like that it WOULD BE A BIG DEAL IMHO to their credibility. KMI, KMP,R wouldn't have declined as much as they did short of the near apocalyptic conclusions drawn in the Hedgeye and Barrons reports.