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BP Prudhoe Bay Royalty Trust Message Board

mikegifford85 2 posts  |  Last Activity: 10 hours ago Member since: Sep 13, 2011
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  • Reply to

    Investor's interest in high divs

    by brophy294 Aug 27, 2014 8:34 AM
    mikegifford85 mikegifford85 10 hours ago Flag

    brophy... good point. Here are my thoughts... Once interest rates rise, that should mean that there is inflation. If we are keeping rates low to inflate the economy, then higher rates should indicate that there is inflation and the higher rates are trying to deflate the economy. If then there is inflation and with oil priced in USD, then the price of oil should increase. For an extreme example, in pre-WW2 Germany with folks with wheel barrows full of cash to buy loaf of bread as the currency lost it's value. If the price of oil increases then that would be a good sign for BPT royalty payments. I would agree that folks will get back into bonds once rates get higher. However, if there is a sell off of BTP then the price would decrease and the yield on the purchase price (market price) would increase. We have not yet taken into account any changes/decreases in production or the impact of the increases in the chargeable costs/taxes. Similar to octester, I've had a position since 2007 and have enjoyed every minute of it. I think I paid $58/share. I reinvest the royalty payment (even riskier as my whole position is tied to the market price). By doing so, I've reduced my cost basis to around $30 or so. My yield on my cost basis can't be beat by any bond. It's all about timing in these royalty trusts. Get in early, soak up as much gain as you can, and sell before the production, costs/taxes, reserves take their toll on the price (or if it has a defined exit plan in the prospectus).

  • Reply to

    Sustainability of dividends

    by valueprofessor Jun 2, 2014 2:06 PM
    mikegifford85 mikegifford85 Jun 14, 2014 10:41 PM Flag

    I'm not sure why people voted "thumbs down" here. It's not about charts, graphs, and whatever. It's just math. Good analysis.

BPT
96.93+0.50(+0.52%)Aug 29 4:01 PMEDT

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