A funny response for someone who seems to have a good grasp of technicals and who has reported how he buys and sells Apple puts as well as a long term holding like HAIN. Guess he didn't mind paying tax on HAIN (and if it was in a retirement fund and no tax was due, then why sell if it is a long-term holding).
The point of the discussion is that it is a difficult decision to decide to give up income in the short term (but no one is suggesting that investors give up all their income from every holding for a long period of time). Some stocks (maybe fewer in this environment) may not have as stretched valuations as others and technically may have support levels that don't make trading worth it. But it is a risk analysis that everyone should take with their holdings.
Agreed, but it's now a race between how long before we get to that point and when they cut their distribution, with the distribution elimination risk winning. I'm on record saying that I would buy if they eliminated the distribution and bought back units, because that could mark a tradeable low. But instead they seem to want to continue the slow bleed.
That's right G Best. Now can you tell us what happens to their debt covenants and what effect that will have on the distribution.
With all due respect biotech, are you sure you want to bet on the same Ed Cohen who also said that ATLS would pay a distribution of $1.35 when they announced the TRGP deal. That was then cut to $1.10 two weeks later. Then they had to do a reverse split on ATLS so the distribution was adjusted to 55 cents. Then they suspended it for Q2. Then they suspended it for all of 2015. All during this time, he knew or should have known what the debt covenants were at ARP that would make ARP cut their distribution by 50% such that ATLS's take from ARP was reduced significantly. Seems like he has a pretty bad track record.
It's one thing if you believe in their properties or if you believe that energy prices will snap back to previous levels, but it's quite another to put your faith in a CEO who has such a poor record at being square with investors.
I don't trust any of the analysts at this point. I think they are just guessing to try to help some client unload shares. What a disaster this had been.
Maybe temporarily for a bounce, but it is not even oversold with the RSI at 32. And even oversold levels on the RSI did not stop it from plunging from June to mid July. It probably goes under $5 with the next plunge in oil, and after they cut the distribution, who knows? If it does bounce, the 50 dma probably keeps it hemmed in, but I doubt it is going to even get near that level.
Thanks for your jerkwad opinion jerkwad. You and your no opinion remarks are just jerkwad remarks in a sea of jerkwadness that is you. Now put the pipe down and go to sleep.
But at least I had an opinion instead of just a jerkwad remark. Go play outside with your dog.
If this was a normal time with a normal monetary policy and a normal interest rate structure, you would be right. But it's not and hasn't been since 2008. And you thought the Fed fixed everything.
No, I would stay away until you see the reaction to the divy announcement. If there's an adverse reaction, I would make sure I'm looking at a chart to see that it bottoms before buying. This could easily fall to $11 or lower if the cut is a big surprise. If it got oversold on an adverse reaction, then I might consider buying it for a potential run into the ex-date, but I wouldn't hold into the earnings report. This has become more of a trading vehicle as they seem to disappoint on book value each quarter.
Boy, jerkwad, for a person(?) who is always knocking others for posting, you sure do post a lot of jerkwad posts. Tell your mommy to buy you a basketball so that you can get off the computer.
Sid, I can't compare to Gracie in my knowledge of WMC's portfolio, but they are due to declare the next dividend on the 18th and I think they are going to decrease it again. That might be priced in already since the stock dropped from $15, but then again it might not. I think Gracie makes a good point that the Fed doesn't really matter because they can't make a Fed funds target hike stick (see this Sunday's NYT business section article about how Fed Funds is not working to raise rates because of the excess reserves held by banks as a result of QE). Some people are fixated on the overall yield, which would still be great even if they pay 54 cents, but the direction has been down and that is the trap that mREIT investors always seem to fall for.
Only if it is a colder than normal winter. We're supposed to get an El Nino which would be warmer than normal.
Gambler, you may be making the mistake of thinking that some stocks will be spared if we go into a bear market. Maybe the financials hold up better. JPM still has a longer term upward sloping chart with support around $58, but a drop to $58 would be almost 20% off its highs. BAC seems stuck between $18 and 14. That move over $18 that DH called back in July seemed to be a fake out.
Kee, you better check your figures on WPZ to account for the share exchange with ACMP. Previously, WPZ paid .9285 per share. The merger exchange ratio was .8667 share of the new combined company for each share of WPZ. Most recent distribution was .85 cents. So that works out to .8667 x .85= 80 cents on the New WPZ which is of course lower than 92 cents previously. Technically this was not a cut, but a readjustment, but of course that was just their spin on it to sell the deal and get a higher growth rate from a lower starting point. But it is still not back to the same level. Believe me, because I read all the angst on the i.v. board when the merger was announced.
Same thing will happen with MWE when they are merged with MLPX.
Well I have been saying it's the debt covenants. Remember in March when they cut the distribution by 50% because they bumped up against the debt covenants. BTW, there was almost no discussion or warning about that in any of their earnings calls. Then they got a temporary waiver to do the second lien deals. The debt covenant ratios are tightened next year. The market is clearly anticipating another distribution cut and eventually to zero to pay their debt. When that outlook changes, then the stock might bottom.
The same thing has happened in other sectors during downdrafts. When debt becomes an issue, the stock gets sold.
Sarge, the challenge is to try to see both sides of the market. You can be an optimist without letting it blind you to risk. You can be opportunistic without being greedy. There is a time to buy and a time to sell,and sometimes a time to just sit and wait for things to become clearer. Hopefully, no one is so dependent on receiving one or two dividends that they remain overinvested in stocks.
Kee, it's not about being a doom and gloomer, but about maximizing investment performance. Your point is that the MLP stocks are not all the same, and Gambler's point is that the market is treating them like they are all the same, and he is correct right now. Technically, you are correct that you don't have a loss until you sell, but we have seen several stocks eliminate dividends, and some are merged and their dividends lowered (this happened with WPZ and will with MWE). I good example of this in non-energy is what happened with the banks after the financial crisis. BAC is nowhere near it's pre-crisis high and its divy is a fraction of what it used to be. However, if you sold it at $50 and bought back at $5, you made money on both trades.
One thing that no one talks about in all of these posts about total returns and dividends is RISK. and the price of that risk and whether one is increasing one's risk to get that same return.