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Inergy, L.P. Message Board

marklibera 365 posts  |  Last Activity: 5 hours ago Member since: Aug 14, 2007
  • marklibera marklibera Aug 5, 2015 9:49 AM Flag

    I disagree. Yes, the MLP funds, ETFs and leveraged hedge funds are creating selling pressure, but many of these MLPs have too high debt loads and bad hedging. These guys are supposed to be watching the supply and demand balance of the commodity and probably have experts or pay experts to buy the appropriate hedges. Did they not see all the oil and gas that was being supplied?
    And the fact is that most of these firms have increased their debt levels because the financing was there for them to take advantage of. ARP is over 5 times EBITDA.
    Some are making analogies to the financial crisis of 2008 saying that many of the big banks got really cheap and rebounded by huge amounts, but what they fail to also mention is that many smaller banks failed and did not rebound. Yes, Exxon, Chevron and the rest of the big majors will bottom out and rebound, but many of these smaller MLPs are going to go under or get taken out in a takeunder because that's the only way for management to get paid out on their golden parachutes.

  • Reply to

    ot: NYMT

    by bayman667 Aug 5, 2015 9:23 AM
    marklibera marklibera Aug 5, 2015 9:35 AM Flag

    I am going to blow my horn on this one too. Some may recall that I warned about NYMT several quarters ago. I said that they owned a bunch of subordinated MBS and mezzanine securities. Having worked at a company that owned subordinated mortgage-backed securities that went bankrupt because of those holdings, I tried to point out the risk. When things are going great, these securities rise in value, but when spreads blow out, because of the incredible leverage in these instruments, you can get hammered.

    I once owned the preferred of a company named Anthracite Mortgage, that was run by Blackrock. You would think that with Blackrock's expertise in bonds that this company would be good, but they ended up going bk and liquidating and their preferreds got 0. If you are going to chase yield, know what you own.

    Now, if I only applied these lessons to my energy holdings.

  • Reply to

    OT: Fleckenstein to reopen short fund

    by marklibera Aug 5, 2015 9:03 AM
    marklibera marklibera Aug 5, 2015 9:29 AM Flag

    Gambler, I'm sure DH will come out of hiding to chide you for your comparison of Apple to FB, but your point is well taken. At some point, maybe around 105, Apple will stabilize because their buybacks will support the stock. And at some point, value players will emerge once all the momentum chasers have sold.
    My wife owns some shares and I did not sell them because you never know how the market will react to Apple's earnings. The stock could have easily jumped 10 points after earnings, but it's failure to clear the previous highs (there were a bunch of false breakouts) signaled that too many people already owned it.
    The bigger worry for Apple fans is that it makes up so much of these ETFs that any selloff in the larger market is going to bring it down. Fleckenstein made this point about ETFs. They are the 2015 version of the 1980's portfolio insurance, but some posters still think the market is about corporate earnings.

  • This guy called the crisis in 07 and also closed his short fund in 09 when he saw the Fed printing. He's negative on semis, including INTC and those in the Apple supply chain.

    Some may note BofA's call on Apple, which may a bit of piling on since it dipped below the 200dma. Bloomberg TV was going to have a segment on Apple today with that yummy Stephanie Ruhl.

  • Reply to

    GLOPPED

    by marklibera Aug 4, 2015 3:56 PM
    marklibera marklibera Aug 4, 2015 5:29 PM Flag

    Sarge, it's the chart. I should have gotten out when it crawled back to 21 but I was out of pocket and not watching the market. With the ex-date coming, you would think that someone would be buying to capture the divy, so if it was down today, I imagine it will continue to fall. Anyway, the whole thing reminded me of SDLP and in that case, it didn't matter what their outlook was on the dividend.
    Good luck.

  • marklibera by marklibera Aug 4, 2015 3:56 PM Flag

    I'm out. Good luck guys.

  • Reply to

    OT/ LMT

    by jkprice Aug 3, 2015 6:51 PM
    marklibera marklibera Aug 4, 2015 3:34 PM Flag

    For some reason my replies to this post keep getting erased. Anyway, LMT has gone virtually straight up from 186 to 209. It needs a rest.

  • Reply to

    reminds me of 2008.

    by iconoclasticist Aug 4, 2015 11:29 AM
    marklibera marklibera Aug 4, 2015 3:26 PM Flag

    I've been saying it is too early to be a bottom fisher in energy. Maybe with oil at $38 and after tax loss selling season ends, it could be time to look.

  • Reply to

    Availability of quality assets.......

    by chit3522 Aug 2, 2015 4:30 PM
    marklibera marklibera Aug 4, 2015 3:00 PM Flag

    Exactly. They've been promising a jv for the Utica assets ever since they finally stopped promising a sale of the same Utica assets. Maybe these guys are such a-wipes to deal with that no one wants to do a deal with them.

  • marklibera by marklibera Aug 4, 2015 11:21 AM Flag

    A few weeks ago I think Huff mentioned some airlines as buys. AAL, DAL and LUV had all rolled over and sold off. At the time, it looked like they could go lower still, as I don't trust downward sloping charts. But it is starting to look like each has found support and may be turning up.
    On AAL, it looks like it bounced 3 times around 39 and has now cleared the 50 dma. It needs to clear resistance at 43, but doing so, it could run to 49.
    On LUV, it bounced off of 32 and has started a new upward slope. Some resistance at 38, but then clear to 41,
    On DAL, it bottomed at 40 and now looks to have broken its downward channel.

    Good call by those who made it.

  • marklibera by marklibera Aug 4, 2015 10:54 AM Flag

    First, technically, it is a disaster although now oversold. Could get a bounce but then there is risk down to $13 and then $12.25. I'm staying away.
    Fundamentally, I did some back of the envelope calculations as follows. Their spread is 2.79%. The book is $13.89 and they are using slightly less than 6 times leverage. The G&A and management fee is 1%. Doing the math, I come up with a divy of about 54 cents next quarter. The way I try to estimate mREIT divies is not always correct, but if WMC cuts theirs again, the stock will go lower as the market will lose faith. The risk could be down to $11 (assuming the market requires a 19% yield for this type of risk).
    WMC has traditionally yielded much more than other mREITs even though they have had a fairly good record of paying out an outsized dividend. But there may be signs that record is coming to an end.

  • Reply to

    In reponse to s.man.

    by iconoclasticist Aug 3, 2015 9:17 PM
    marklibera marklibera Aug 4, 2015 10:23 AM Flag

    Icon, it can be a normal human emotional reaction to think of our stocks as personal decisions and that is one of the biases that I have frequently discussed in my posts. We all can suffer from it and it keeps us from being better investors. In fact, our reaction to opposing views can even make us prone to even bigger losses because we don't want to admit that we made a mistake and face the potential ridicule of posters saying "I told you so." It's not a competition between individuals. Instead, we should be trying to learn from the mistakes that each of us make, and continue to make. It's always easier to buy a stock than to sell one because when you are buying, you are filled with hope and analysis that supports your view that the stock will go up. But when you sell, there's the doubt that you might be wrong, and we tend to be optimists instead of pessimists, unless you happen to share my background of having been raised a Red Sox fan, when until 2004, disappointment and disaster, were always just waiting to happen.

  • marklibera marklibera Aug 4, 2015 10:00 AM Flag

    No, the process of realizing that management were idiots took longer for many of us to realize. It wasn't like the stock was $70 and when it fell to $65 or 60 or 55 we said they were idiots. They did mislead if not outright lie as to the possibility of a sale of the Utica acreage (still only a handful of acres have been sold, and the previous excuse was that there was not enough takeaway capacity, which led them into Cardinal and UEO. Those did turn out well, but the stock is still down huge. The mismanagement took some time to play out. Yes, the old adage, fool me once, shame on you; fool me twice (or three or four times) shame on me, applies.

  • Reply to

    LINE/LNCO

    by bobdbeck Jul 30, 2015 8:16 AM
    marklibera marklibera Aug 3, 2015 5:26 PM Flag

    Sarge, on KMI, go to the 1 yr chart and find the prices on Sept 2013 and draw a line straight across. Support there could be around $31.5, but it also could revisit the March 2014 bottom at $29.
    The way I look at it (which could be completely wrong) is that when you have a plunging stock, let the stock tell you that it has reached a bottom and has stopped going down. Many times you see these stair step patterns down where the stock will bounce up to the next stair and then continue down. Many stocks have that pattern now.
    Frankly the whole energy sector is broken and as long as people keep talking about it, that means there are still plenty of people to capitulate, meaning lower lows to come. Maybe when Time magazine (is that still published?) puts a "Death of Oil" on its front cover, we will know it is time to buy.

  • Reply to

    LINE/LNCO

    by bobdbeck Jul 30, 2015 8:16 AM
    marklibera marklibera Aug 3, 2015 4:32 PM Flag

    Sarge, just looking at the chart, I would say it has further down to go. There is just no sign of a flattening out or a bottoming.

  • marklibera marklibera Aug 3, 2015 4:13 PM Flag

    The argument is not about maintaining the stock price. The argument is about maintaining the solvency of the company and/or creating a buyable bottom in the stock price so that one can get even on underwater shares. There is no buyable bottom at this price because the only thing that is going to stop the price from going down (as long as oil keeps going down) is for the company to buy back units, but it makes no sense to pay a distribution and buy back units.

    As for the geniuses running the company, Walker bought shares at $22. These guys have all the research about oil and gas supply and demand, yet they didn't hedge out long enough. Haven't they heard about the Marcellus and all the gas coming out of there? They fired the acquisitions guy and one guy moved on, so clearly they weren't pleased with some of the exec performances.

  • Reply to

    KNOP....does it ever stop going down??

    by rbgambler99 Aug 3, 2015 12:52 PM
    marklibera marklibera Aug 3, 2015 1:15 PM Flag

    Gambler, it's sad, but my best trades this year have been when I decided to sell things as they started to turn south, thereby avoiding much worse losses. Stuff that I held has done worse. Sometimes your best loss is your first loss.

  • marklibera by marklibera Aug 3, 2015 10:50 AM Flag

    Still trying to catch up, but it looks like the market responded well to GLOP's report, however the stock looks like it hit resistant. After a bounce like it just had, it's normal for there to be a selloff, but I'm watching this closely as the ex-date is this week (the 6th?). It should be running up into that ex-date.
    I know they had a good report and raised the divy guidance, but the market doesn't seem to care about that and when the ex-date passes, there won't be anything to hold up the stock.
    I could be wrong, but sometimes the market gives you a chance to take an exit even if the exit is for a loss.

  • Reply to

    XOM a buy at $80

    by sarge198502 Aug 1, 2015 8:06 PM
    marklibera marklibera Aug 3, 2015 9:57 AM Flag

    Stagg, you could be correct about China and India, but taking a page out of DH's book, you don't really know who put that story out. It could be a pr agency hired by the coal companies to help prop up their falling stocks. Many times the market just cares about perception and the current perception is that coal is dead (or in the process of dying). But that's how opportunities are created (but you may be very early on catching a rebound in coal).
    As for the party being over for energy MLPs, you may be right for the upstream MLPs, but the model still works for midstream and there still are a bunch of projects to build. But like most things, the midstream MLPs got too popular and too expensive, and some have too much debt (but not all). Continued selling by ETFs may drive down their prices, but just like your argument for coal, that will create opportunities.

  • Reply to

    WMC getting smacked down...

    by rbgambler99 Jul 31, 2015 11:04 AM
    marklibera marklibera Aug 3, 2015 9:40 AM Flag

    I've been out of pocket the last few days. Saw the big miss by WMC. Glad I sold when I did. I think there are a few thoughts here. First, these mREITs can be difficult to analyze because of all the moving parts, which is why it is sometimes better to trade them instead of just holding them. We are just not going to see the book value gains that we did a few years back when MBS prices were increasing as the Fed bought every bond available. Second, it appears that WMC is finally starting to come back to the pack in terms of its dividend amount (not the yield). Gracieblackbelt from the WMC board (who used to work at WMC) fears that the dividend could shrink to 50 cents. That's still a great yield on a $13-14 stock, but the market tends to view shrinking yields as a disappointment (especially when coupled with a declining book value). So there is risk the stock will get hit if the dividend disappoints. The stock is sitting on the 200 dma after briefly piercing it. There is support at $13. If we get a strong employment number, rates could rise and mREITs could sell off again. I would wait before re-entering as the next divy announcement is not until mid Sept.
    WMC was fun while it lasted, but we have seen it countless times in the market that all good things do come to an end.