Tell that to MLP "income investors" of LINN, BBEP, etc. Distributions get eliminated without notice and you get a fast 25% haircut on your principal which is already down 40%. You can gamble on the income, but never count on it. And please don't give me the old "but not EPD". Trust me, it can happen to anyone.
There are great companies and there is great stocks. Ideally, you want both. Great companies with terrible stocks i.e.: PFE, MSFT, WMT. Great stocks (previously) but terrible companies i.e.: BBEP, LINN. Eventually the cream comes to the top & the #$%$ drifts to the bottom of the septic tank.
Must be a newbie because from 09 to current VTI would have served you well, however if you bought it in '01 you're still underwater. Don't know if VTI existed in '00, if it did, I don't know if the loss's could be made up in one life time. Just awful
Don't blindly look at "income". You do realize that a portion of the distribution is just a return of your own capital don't you? And that 5 pennies per year for each dollar invested is small consolation to the +-40 cents lost over the last several months (and still falling). Could take 8-10 years to get back even, and you still won't have made anything yet. Plus, the distributions are not guaranteed. Some people are just plain stubborn or just don't have enough experience in the market. Best of luck to you.
Thats exactly what I said about Pfiser 15 years ago and it still trades much less then at $42 when I bought (no splits). Great companies can take 20-30 years just to get back even. Get out of this sector, or better yet, get out of stocks.
My guess is mid October in the mid teens. Forget about bigger pictures and how great a company these are. It is simple basic math. You are emotionally attached here. Think of these MLP's like playing a deck of cards. Fold and get to the next hand, but get out of Energy/MLP's.
I don't understand why people don't use stop loss orders. Everyone long MLP's are like blind rats on a sinking ship. People get emotionally attached to their stocks and can't admit a mistake. Everyone makes mistakes, but you need to know when to stop the pain. Think of stocks more like a deck of cards. Don't get emotionally attached to the 4 of hearts or 3 of clubs. Look at your stocks like a game of cards. When you're losing this bad, have enough sense to walk away. Several sectors are soaring. Why stay on this sinking old ship when the key to escape is in your hand????
fhmesser….The drop from $40 to $30 is in fact a 25% decline. And yes, you will now need a 33 1/3% increase just to get from $30 back to $40. Basic math 101, not rocket science. Also, don't be so sure about where a stock may be trading 5 years or more from now. I heard the same argument 15 years ago about one of the greatest pharmaceutical companies on earth, Pfizer. I paid $42 per share of this great company 15 years ago, needless to say, that to this day, 15 long years later, it still trades much lower (with no splits). Never think a company is so great that it can't possibly trade lower in 5 yrs or 15 for that matter.
Good Luck & Happy Trading
Gonna take 5 years of 5% distribution just to make up for the fast 25% drop from $40 to $30 and it likely is not done dropping yet.
Seems fairly obvious that people are getting a peek at Barrons ahead of time and are trading in anticipation of retail investors reacting to articles. People with inside information piled into this yesterday.
not_totally_gray….Thanks for the nomination. I tried to warn that person. My other post on Nov. 8th predicted the cut and a drop to $16. I was off by a penny as it closed at $15.99 I received 14 thumbs down when I posted. Most people asked if I wore a tin hat, etc. I'm once again vindicated. Happy Trading
Posted Nov. 8th
"Look for a 50% cut at first. It will sell off to +-$16, then a dead cat bounce back up to +-$18. Then within 9-12 months, look for the dividend to be eliminated with a fast drop to $10-$11 range. After that, if too many rigs are sitting and day rates stay low, look for a bankruptcy filing as SDRL has enormous debt and it would be a very smart move to eliminate a lot of debt. Bad for stockholders, but SDRL will emerge a much healthier company."
loper-35801….I tried to warn you. Your 10,000 shares just lost $50,000 by the opening bell. And that steady income stream lasted all of about 6 weeks. My steady blue chips averaging 3-4% are crouching your SDRL investment. Sorry for your losses.
Thanks for the thumbs up, sorry for the loss. I'm not gloating at peoples losses, just pointing out that non-popular opinions should be considered
Yes the dividend cut is very positive for the company, just not the stockholders. An even bigger positive would be a bankruptcy filing. Again, positive for the company to get rid of debt, just not positive to stockholders.