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Inergy, L.P. Message Board

marklibera 1851 posts  |  Last Activity: Feb 6, 2016 2:11 PM Member since: Aug 14, 2007
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  • Reply to

    ETE....looks like it is close to the bottom

    by rbgambler99 Feb 5, 2016 2:02 PM
    marklibera marklibera Feb 6, 2016 2:11 PM Flag

    JK, I don't want to get political because I think the system is at fault. Keynesian economics is a failure. In the past, some of us have discussed whether we are becoming Japan. There are some obvious differences, but it would be interesting to look at the history of their stock markets. I remember having this conversation with a colleague in 2002, comparing the Nikkei to the Dow (the Nikkei had already started a long plunge). People think thatwe can't have a plunge again because the Fed/govt will just do the same thing they did in 2009 and save the economy and stock market again. That's why it is important to look at history because all the fixes that "worked" (at least from 09-16) may not work again, or maybe for a shorter time.

  • First, add T Bonehead Pickens to another of the can't trust talking heads as it was revealed last week that he sold all of his oil positions last week after going on CNBC and stating oil was going up to 55 or 60.

    Second, Barrons had a follow up piece on that analyst Kaiser from hedgeye who made that correct call on Line and KMI. Whether you agree with him or attribute his being right to the luck of oil prices falling, he made some important statements about the nature of the securities business. Such as:
    "THE MLP SECTOR was a ripe target because Wall Street analysts were almost uniformly bullish and offered little critical analysis. Why? One possible explanation is that MLPs generated large investment-banking fees for the Street from debt and equity deals to fund aggressive pipeline expansion. Research analysts surely knew this and didn’t want to rile big banking clients."
    Another interesting point that he made was that he had compared MLPs to non-MLP exploration companies and found that the MLP were valued higher even though their cashflow was not higher than the MLPs. The reason: yield chasing.
    Those two points got me thinking about a comparison between BDCs and traditional banks. Are BDCs overvalued compared to banks because of their high yields and will they meet the same fate as MLPs?

    Finally, another piece in zerohedge about a complaint filed with the SEC about ETFs. Suffice it to say that these are potential bombs and likely to accelerate any downslide in market prices.

  • Reply to

    INTEREST RATES

    by peteza777 Jan 19, 2016 8:41 AM
    marklibera marklibera Feb 6, 2016 1:39 PM Flag

    Bud, two points about your post. First, I don't think short term rates are going to rise that much. Sure the Fed might have another hike but that is becoming increasingly doubtful as the economy softens. Granted they are on a mission to return to "normalization", but the rest of the world is going to negative rates and pretty soon the investment community is going to start to expect that that is where we are going to go. Second, while the 10 yr Treasury rate has fallen to 1.8%, it is not guaranteed that HTGC will also benefit from a decline in that rate because their long term borrowing rate is dependent on credit spreads. If credit spreads are moving up for companies, then I would expect them to be rising for BDCs. Finally, there was a good point made in a Barron's article this week. The article was about energy MLPs and a bearish analyst was comparing them to non MLP energy companies and finding that MLPs had higher valuations because of their diviidends, but that was not supported by their cashflows. By analogy, are BDCs valued more than banks solely because of their high yields? I have not done a comparison, but it is worth mentioning.

  • Reply to

    JANUARY JOB REPORT...!

    by staggman99 Feb 5, 2016 8:41 AM
    marklibera marklibera Feb 5, 2016 4:44 PM Flag

    stagg, my closed end muni funds were up again today and so was my inverse ETF bet. When the time comes, I hope to harvest those gains and reinvest in something that has been beaten down but has great value. There are a few pockets that may be ok still. VZ was up today too as was T. Eventually the selling pressure will hit them too, as when the selling really kick in, the big funds will have to sell the most liquid names.

  • marklibera by marklibera Feb 5, 2016 3:21 PM Flag

    Zerohedge had this item about the Chinese FX reserves to be disclosed on Sunday night. If it comes in worse than expected, the market could sell off big. If it comes in better than expected, there could be a huge relief rally. Since Chinese trading is closed next week for their New Year holiday, the trading will be controlled by the computer algos here.

  • Reply to

    OT: EQM

    by marklibera Feb 4, 2016 11:17 AM
    marklibera marklibera Feb 5, 2016 2:59 PM Flag

    I haven't checked the Wells MLP reports in several weeks. While I think they are basically honest, I don't think they could get out in front of the deterioration that was occurring in the sector (not if they still wanted to get investment banking business).

  • Reply to

    ETE....looks like it is close to the bottom

    by rbgambler99 Feb 5, 2016 2:02 PM
    marklibera marklibera Feb 5, 2016 2:53 PM Flag

    ETE was one of my best performers. I think I had a triple when I sold it last year. Thank god I saw the signs that it had turned and got out at $28. I said I would look to re-enter it if it got to $8, but things are still dicey, especially with the entire market on the brink. It is just too early for me to go bottom fishing. My experience from the last crisis was things almost always get cheaper. While there is a lot of blood in the streets on many individual names (have you seen the declines in Linkedin, Amazon, Tesla, Priceline and Tableau?) until there is truly blood in the streets with the major market averages, I am going to try to hold my cash until a very fat pitch.

  • Reply to

    Headlines

    by marklibera Feb 5, 2016 12:28 PM
    marklibera marklibera Feb 5, 2016 2:29 PM Flag

    Kee, I'm not an economist and I'll leave the commentary and dissection to those much smarter than me. Luckily, there is plenty of that to be found. I have suggested zerohedge to you and today they ran a piece from Jeffrey Snider of Ahlambra Partners who dissects the current jobs report. I can also recommend Mike "Mish" Shedlock who also has a blog (Mish's Global Economic Trend Analysis) in which he usually comments on all of the economic reports. The fact is that you are just not going to find the scrutiny of these different economic reports in any mainstream media because their readers don't care about it. If it can't be captured in a sound bite, then they aren't going to do it.
    As for my "theories", a lot of what I have been reading and taking heed of has started to come true. The market topped out last summer, but it took until December to start to roll over. The economy has been slowing since summer. Declines in the high yield stocks started earlier. The interconnection between economic conditions, stock prices, bonds, currencies, central bank monetary flows and even the plumbing of the trading systems themselves are very intricate for any one person to learn about, but luckily there are many people writing about these topics everyday.

  • marklibera by marklibera Feb 5, 2016 12:28 PM Flag

    Over to the right of this screen are the following headlines:

    US job growth slows
    US exports fell in 2015 for the first time since recession
    LInkedin skids 40%
    Dow sheds 200 after jobs report

    Looks like good news to me LOL.

  • Reply to

    BDI now

    by bobdbeck Feb 5, 2016 11:56 AM
    marklibera marklibera Feb 5, 2016 12:23 PM Flag

    Must be a sign that everything is still ok and has good color.

  • Reply to

    JANUARY JOB REPORT...!

    by staggman99 Feb 5, 2016 8:41 AM
    marklibera marklibera Feb 5, 2016 12:22 PM Flag

    stagg, you don't look closely at the headline stats to understand what is happening. Anecdotal evidence is good but it is limited to your surroundings. First, did you know that 70% of the Jan jobs were in the bartending and waiter category? Those are not high wage jobs. Second, have you seen the stats on the new vehicle sales to understand who is buying those cars and the terms of their financing? Most of the incremental sales are to people with low FICO scores and the average number of years financed is growing.
    What people may be saving in fuel prices is going to pay increased costs of health insurance, or increased food costs or to pay down debt. Why are the retail sales down so much (ex autos) if everything is so great? Why is GDP less than 1% and declining?
    The auto sales bubble is very similar to the housing bubble. People said housing prices never decline, but in order to increase sales, the lenders just lend to greater and greater numbers of lower credit people.
    As to investing, everything is not always crashing (just your high yield stocks LOL), but many things are starting to crash now because the Fed's monetary experiment did not work. Richard Fisher, former head of the Dallas Fed, even admitted it when he said the Fed pulled several years worth of stock price growth forward in order to get a "wealth effect" going.
    I think you can understand that the market and the economy run in cycles of about 7-9 years. That is the norm. When bull markets or recoveries go beyond those times frames, that is the exception.
    Stagg, you will never be convinced. NYMT can decline from $8 to 4, SDRL from 40 to 2, KCAP from 9 to 3, PSEC from 11 to 6, BDCL from the mid 20s to 13, NRZ from 16 to 10, and UVE from $30 to 17, and you think this is all normal and not a sign of any problems (other than what everyone knows with oil).

  • Reply to

    OT: EQM

    by marklibera Feb 4, 2016 11:17 AM
    marklibera marklibera Feb 5, 2016 12:06 PM Flag

    Following up, on the reasons I like EQM. First, they are a gas gathering and distribution company in the Marcellus and they have a lot of growth ahead of them. They keep adding/buying systems. Despite the low nat gas prices, nat gas is still being produced out of the Marcellus and retail and industrial demand is going to keep increasing. Some may worry that they could have exposure to highly levered drillers, but the contracts they have are with the bigger, investment grade players who are not apt to go out of business (this doesn't mean that the stocks of those drillers are good buys now). They have years of double digit if not 20% distribution growth ahead. Clearly the stock and the whole MLP group is still out of favor, so I won't be chasing EQM until it comes back, but at $58, the yield would be close to 6%, and I'll take a 6% yield with 20% growth. At 20%, the distribution would double in less than 4 years, and as even you will agree, it's about increasing distributions. I'd rather own companies that increase divies than ones that are cutting.

  • Reply to

    OT: EQM

    by marklibera Feb 4, 2016 11:17 AM
    marklibera marklibera Feb 5, 2016 11:45 AM Flag

    I don't follow GSL and CPLP, so as for their business and operations, I don't have anything to add, except for with the risks of a global depression increasing, all shipping seems to be tanking. CPLP has lost about 50% SINCE November, so something is clearly not right there. Could it be at a bottom (not including any dead cat bounce for traders), who knows, as we really don't know how bad the global economy will get.
    I have stated my views on NYMT several times before. They own subordinated CMBS and preferred interests in borrowers (please go see the movie The Big Short if you don't know what that means and don't understand the risks that those assets present). NYMT already cut their divy once before and the stock is down from $8 where many bought it. Why do you think that is a good sign or that that damage is "contained? (I am using the word "contained" often because that is the word that many used back in the financial crisis to try to convince everyone that things would not get worse, and it turned out that they had no clue). Many posters say "but look at their book value" like book values can't keep decreasing, especially as the economy continues to slow. The fact is that financials companies like NYMT and KCAP (another one that you said had good color) have the same type of exposure and risk to high yield spreads.

    I am in NRZ and confess I have not looked deeper into their financials to see if there is something that I am missing. The only thing that I can think of is that a portion of their future earnings projection is based on calling securitization deals (e.g. they buy out the loans in a deal at par and then repackage them in a new securitization and make money from selling those bonds) and that the recent increase in spreads has decreased the potential profit that they will make from that process. But it also could be as simple as their exposure to less credit worthy loans which are getting mark down. More to follow.

  • Reply to

    OT: EQM

    by marklibera Feb 4, 2016 11:17 AM
    marklibera marklibera Feb 5, 2016 10:11 AM Flag

    No, better to buy a stock like NMM or SDRL that cuts its distribution to 0. Admittedly, the stock price of EQM is still going to struggle irrespective of its distribution growth because it is an MLP and they are still out of favor. This is why I haven't bought it yet (I'm hoping it will get to 58 when the market eventually flushes). Of course, no one looks at p/e ratios when analyzing MLPs. Nice try Stagg, but your picks of SDRL, NMM, KCAP have proven that your reliance on high yields and so-called low p/e's don't hold up. But at least you are Thoreau-like consistent ("a foolish consistency is ....).

  • Reply to

    JANUARY JOB REPORT...!

    by staggman99 Feb 5, 2016 8:41 AM
    marklibera marklibera Feb 5, 2016 9:43 AM Flag

    This was not a good report for the market. Let me explain. The estimates were as high as 190,000. But because wages were up and the unemployment rate was down, the Fed may be inclined to continue raising rates to try to reach normalization since they are supposedly "data dependent." The dollar was up (bad for commodities and multinationals' earnings). Meanwhile the layoff notices continue and are growing. At some point, those are finally going to make it into the unemployment "models."

  • Reply to

    Price of Oil...

    by rbgambler99 Feb 5, 2016 8:43 AM
    marklibera marklibera Feb 5, 2016 9:18 AM Flag

    The report was from Bloomberg Intelligence that was on zerohedge. It was county by county with the $23 being in Dewitt County, TX in the Eagle Ford. Wolfcamp in Reeves County, TX was also at $23. But there were also areas in these same shale formations (Wolfcamp and Eagle ford) that were much higher.

  • Reply to

    Hey marklib

    by lenloc Jan 29, 2016 12:52 PM
    marklibera marklibera Feb 4, 2016 9:34 PM Flag

    Well, one can't argue with that performance no matter how you got there. Without getting too political, it seems that you have really benefited from lower tax rates on dividends. I wonder which party did that and which party wants you to pay more because, after all, you didn't make those dividends so you should pay back your fair share.

  • marklibera marklibera Feb 4, 2016 1:38 PM Flag

    What are you, 5 years old, or 95? As for my like or dislike of mREITs, I owned WMC (bought at 11 and sold at 15). I actually owned NYMT for a short period from $7 to $8, and I actually worked at an mREIT from 2002 to 2006. My experience is that they have their cycles when they do well and when they don't. But most people are too lazy to see that and just chase the yield.

  • marklibera by marklibera Feb 4, 2016 11:17 AM Flag

    I don't own this but would like to buy it lower. They reported great earnings again and gave distribution guidance of an increase of 22% next year. Their coverage ratio was 1.67. Each quarter, the stock reports good numbers and the price jumps several dollars, but then it declines again. It's an MLP, so trading it would be a headache. If it sees $58 again on the next move down, I think I will have to finally buy it.

  • Reply to

    O/T NMM

    by wingnut90266 Feb 3, 2016 8:35 AM
    marklibera marklibera Feb 4, 2016 11:13 AM Flag

    Nope. There are always forward looking statements to protect them. Plenty of investors are learning this lesson the hard way. Unfortunately, you just can't blindly follow what management (or analysts) say -- their job is to convince you that they know how to lead this company and to be optimistic. Many learned this the hard way with SDRL and Friedrickson.