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Breitburn Energy Partners LP Message Board

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  • ruby.thedyke ruby.thedyke Dec 10, 2010 3:54 PM Flag

    Baupost Sells 30% of its BBEP holding

    Yeah, I don't recall the smart money being all that brilliant back in early 2009, when this was on sale for five bucks and change. But, their motives are different, it's all about performance. Most of us retail guys are all about cash flow when it comes to MLP's. Barring some future liquidity issue, which I doubt, I'll hold this to the grave.

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    • I would agree with you about the smart money and all ... but be aware that you can't put Seth Klarman and Baupost group into the same pool with all others out there.

      Klarman bought BBEP initially around $11 when Lehman was selling it in end of 2008. Then after the market dislocation he doubled down and bought heavily around $5.5. So atleast in case of Klarman you can literally call it "smart" money.

      Regarding what I am doing with the money after selling BBEP....not much.Have a huge allocation to cash earning 0.75%. Even though that may not be a wise decision I am happy with being on the lookout and waiting for the next fat pitch.I am comfortable holding lots of cash and investing heavily in one or two ideas when the opportunity arrives.

      • 2 Replies to gav_sharma
      • Thanks Gav,

        Klarman is as good as they get.

        When he's selling BBEP, which still yields 7.8%, and returning the cash proceeds to investors, it grabs my attention.

      • Then I beg their pardon and bow in their direction! Especially doubling down.

        I was holding up to 30% cash until the summer dip, but I used it up buying more cash flow relatively cheaply (LINE at $25, EROC, ENP, etc.). I'm relying on out of the money SPY puts for crash cash, but the more time goes on, the less likely another crash seems to me. And even if the market tanks, I'm not sure this time the MLP's will sink with it, not all the way. People have woken up to the value of cash flow in their pockets, and all these companies are a lot stronger than they were going into the fall of 2008, less debt, and for the most part, more capital.