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Kinder Morgan Energy Partners Message Board

  • seebelow561 seebelow561 Nov 20, 2012 10:28 AM Flag

    KMR vs KMP- Sell or Buy Before LTCG increase?

    I'd like your thoughts on what I see as a tug of war between those who would sell before 1/1/2013 to access the present LTCG rate and those who would buy because of the taxation advantages after 1/1/2013.
    I see this as simpler for KMR since there are fewer moving parts in the income taxation.
    Will sellers getting out while the 15% rate still apllies drive the stock lower before year end?
    Will buyers who discover KMR and EEQ for the first time and want in right away prevail and push the stock up in the next month?
    Regardless of KMR or KMP, wouldn't it make sense to sell at the 15% tax rate and re-buy later resetting the basis at the re-buy cost? What part of the ownership will do that?
    Won't there be a big discovery of KMR and a big flow of cash into it?
    Why are EEP and EEQ priced the same while KMP trades at a a higher price than KMR?
    Your thoughts and observations are appreciated.

    Sentiment: Strong Buy

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    • You need to talk to a CPA, a financial planner and an estate planner about your situation first.

      The discount of KMR to KMP is currently 7.55% down from a little over 10% recently which supports the idea of more selling in KMP and less selling in KMR.

      As far as my situation, I've already sold all of my Kinder Morgan securities except a long term core position in KMR. Sold all of my T, half of my VZ and a variety of other stocks to get out of overvalued stocks, book my capital gains and then be able to pick and choose if the market goes down enough.

      KMR is down close to $8+ from its high of $78.83 to a recent low of a little under $70. So, I am out $8 on a sizable position. But, I still have not figured out how to pick the top in a stock and don't want to decrease my stock exposure, which is already low, any more.