There seems to be a slight misunderstanding about Institutional ownership. Fayez Sarofim Investment Company owns 5.5 million shares, Goldman Sachs owns 3.9 million shares, Whitney Asset Management owns 1.7 million shares, Merrill Lynch owns 500,000 shares. These obviously are for client accounts, being held in "street name". No small potatoes there.... Incidentally, the Sarofim firm has beaten the S&P average nine of the last ten years.
" always respect and look forward to your posts, but I never before realized what soul mates we are."
But we come from very different points of view. I just look at the numbers and history, and let others do the detailed studies. Mostly because I am not good at that.
I see these like this:
MLP's are like owning rental property. (ignore property taxes and such)
Two properties cost the same, one pays $100 per month fixed, and one pays $90 per month, but you can raise the rent 10% per year. Most people get the concept here but what about MLP's? My data shows people do not reward growth.
Another math thought:
First col. is total return for 12 months, second col. is total return for 5 years, next is distribution growth for 5 years, last is dist growth for 5 quarters.
Sym, 12mo, 5yr 5 yr, 5qr
ETP, 98%, 475%, 73%, 39%
APL, 51%, 420%, 71%, 22%
PAA, 55%, 277%, 40%, 16%
KMP, 28%, 244%, 84%, 13%
EPD, 36%, 227%, 60%, 13%
BPL, 24%, 152%, 19%, 10%
TPP, 13%, 134%, 35%, 2%
APU, 33%, 133%, 2%, 2%
EEP, 22%, 109%, 6%, 0%
Note, they are in order by total return for 5 years. Then look at the order of distribution growth in 5q. Maybe growth pays big. I report, you decide.
Have a nice day.
ps, I own numbers 2,3,4 on the list.
There are technical reasons for using 5q and not 4q but that gets technical.
gheesh...I'm getting too sloppy for my own good. Did I REALLY post
"If you find a better built [inivestment], but it!"
and if so, what the heck did I mean?? Even by the lax norms of BBoard, email or IM English usage, that was really lame.
"If you find a better built [investment], buy it!"
Sorry...I'll go back to rigorously enforcing my own rule...proof read many times THEN post once.
I always respect and look forward to your posts, but I never before realized what soul mates we are.
I totally resonate with your statement
"Send me $$$ and I'll pay the taxes."
In addition, your statement
"If one lets tax issues lead in investment decisions, you lose"
needs to be pounded into every investors thick skull until they really believe it and act accordingly
As you know, I have posted a lot of info over the past few years about holding MLPs inside an IRA. While fully cognizant of the loss of the tax shelter, I always come back to a simple question:
Totally ignoring the tax shelter issues, are there any other investments I see that offer as high a total rate of return with as low risk?
To paraphrase Lee Iococa, "If you find a better built [inivestment], but it!"
"although addressed to Chartny, I'll take a crack at this one."
And a thought about investing.
If one lets tax issues lead in investment decisions, you lose.
So how is the stock market doing so far this year? And the S&P500 did not send $$$.
And I am going to worry about 15% vs 25% on that distributions? (depends on your tax bracket)
Send me $$$ and I'll pay the taxes.
Capital gains tax is not an issue to me.
"The tax shelter part actually arises because some of the cash we receive is not really income, but is a return of some of our capital that we invested in the partnership when we bought in the first place."
Since part of the distribution is my/your investment capital (which we have already been taxed on prior to investment) and the other part is partnership income, why isn't the investment capital distinguished from the total distribution? Or is it done through the ongoing basis? Is the basis only reduced by the amount of capital returned through the annual distribution?
If you don't want to pay high taxes with this you should get into KMR, they pay distributions in Stock so you don't pay any taxes until you sell. If you hold for a year then you pay 15% in taxes.
although addressed to Chartny, I'll take a crack at this one.
By their legal organizational structure, Partnerships cannot pay dividends...they pay distributions. We, as partners in KMP (even if we are very, very minor partners) are entitled to receive a flow of their income, which is what goes into the distributions we receive.
The beauty of the tax shelter provided by Master Limited Partnerships is that the Partnership itself (KMP in this case) does not pay any income tax. They 'simply' distribute the income to the partners. We then face income tax on the $$ we receive. This avoids the dreaded 'double taxation' on income...the limited partners are the first ones paying income tax.
The tax shelter part actually arises because some of the cash we receive is not really income, but is a return of some of our capital that we invested in the partnership when we bought in the first place. As this is not income, it is not taxed now. However, when we do sell we convert that returned capital into income, and hence pay income tax.
In addition to paying income tax on the returned capital we have received over the years, we also face capital gains tax. This part will be at a 15% tax rate (under current law, if you hold at least 12 months). Hopefully we will owe a LOT of capital gains tax. That may sound weird, but I very much want KMP's stock to go up in price. The more it goes up the more tax I pay (someday). Therefore I want to pay a lot of cap gains tax on KMP. Would you rather have no capital gain just to avoid cap gains tax?
Chartny: ref. ur 10973.
If all sheltered distributions are taxed upon sale, why aren't they taxed at the favorable 15% dividend rate? If that money had been called dividends instead of distributions when paid out, it would have been taxed at 15%. N'cest pas? TIA
Gee whiz that Mcdep is a genious. They outline all the reasons that KMP has been one of the premier MLP including the tremendous capital gains.
Then they claim that KMP is to use billyjoe's quaint phrase "turd".
They sure know what they're doing.
Reminds me of billyjoe's posts---the ones where he has been shorting "turd" since the $30's, paying dividends to the registered owners, paying his brokerage short carrying costs & buying back his "turd" at higher prices.
Gosh, billyjoe. You & Kurt sure showed us longs up. and Kurt gets PAID for his great advice too.
Wow, imagine that.
Hats off to billyjoe, showing us all the way to wealth & investing happiness.