so you pumped it to retirees while you were dumping it and denying its risk
What a guy
Hey Stevie.... Hows that MLPL that you recommended for retires.... I know you said you weren't interested in the unit value... yield only.... but hows that 30+% haircut feel
Hey.... some may want to nibble at MLPL when its yield goes to 15% in a few days
Well since the Fed is run by investment bankers... its the firms that they used to work for that know their direction before the rest of us... and rates have really only one direction to move.... and its what we are constantly monitoring Fed speak
There appears to be pressure from many different events...
The Saudi action of no production cuts (vs their lie last month of a cut) will drive oil down to the point where smaller frackers fold...
Its a problem because there will be no product to ship.... even though the producers are committed to pay for capacity whether they ship or they don't. If a fracker that with guaranteed capacity goes belly up those are dollars the pipelines can't immediately replace in the current environment
This oil glut is going to be a rather large issue because it has the potential to trigger a steep recession.... the GDP decrease from reduced production and lower commodity prices will be significant... it will result in serious job losses throughout the economy
I can't believe this is what the Saudi's want because it will result in low cost oil for a few years whereas a slight dip in production would bring them far more revenue overall
As this unfolds the specter of increase rates will dissipate but we have to wonder how many bullets the Fed has left in its gun.... QE 4 anyone???????
reduced production..... exports
But exports will drive down the price of oil worldwide... and expensive fracked production doesn't make sense at lower oil prices
and that would be the investment banks that hold the massive positions.... who are not afraid of paying the tax... believe that interest rates will be going up... and are taking their profit
rates up... MLPs down.... its always been that way
15% down in 2 weeks here at EPD... I think we could easily see a unit price below $30
again the only thing that stems the decline in unit value is a more aggressive growth in the distribution growth rate
IF you don't believe that EPD can trade to a 5+% yield... you probably never thought that EPD could go from less than 3.5% yield 2 weeks ago to its current 4.1%... and we got that 1/2 a cent in that time period
That's why this holder calls for a higher distribution
The capital outflows from Europe are what fed yesterdays ridiculous rally on the FED speak about interest rates
When we see "irrational exuberance" in the mkt the FED will act...
EPD may be the canary in the coal mine on this.... but many factors are at play..... first and foremost the collapse of the share price of energy producers (due to strong dollar)... this is dragging EPD downward with the sector
Strong dollar is really hurting the US energy industry... its crippling the price of WTI (and Brent) which has the oil frackers on the brink of losing money on every bbl.
Strong dollar is attracting foreign investment
Strong dollar means that US interest rates will rise
This creates a very tricky landscape for EPD to maneuver through in the near term
What I really wanted you to focus on first and foremost is the blowout preventer which is part of the well head and not part of the rig
Every well gets a brand spankin new one that conforms to new specs post Macando
If this is beyond your knowledge base why should anyone swallow anything else you post?
The risk with older rigs that have questionable blow out preventers is getting greater.
Cure your ignorance.... you post all day here as if you know something... you don't
research what you just said and cure your ignorance
and BTW older Rigs have the potential to work at a cheaper day rate at a profit than newer ones
The new ones have to have a rate that justifies the investment
there are some serious glut issues arising.... yet while they shouldn't affect EPD they sometimes can...
The Saudi's cut oil production in Aug by 40Kbbl/day... largest cut in a decade...
As to Nat Gas... they are producing so much to make up for last winters use the question is will they reduce production in time to prevent a glut.... there may be too many producing wells right now for that to be the case
Nat Gas could easily go into the low $3s
and yahoo is the worst offender... IF you pull EPD charts they appear to have split at a 1:4.... and the historical quote page is an out right joke
I'm thinking some of that rather large run was people thinking they were gonna get $2.88 on $40...
Some may have taken that profit and run
well your above facts are not in line with reality... and my sources feel that since ex div at least another 10 million shares have been sold short
Whats the equivalent yield after cap gains and recapture?
and sdrl's divi is questionable moving forward and LINE has never impressed me... ( neither is growing the divi/dist also which may limit share appreciation)
Very High yields equal risky equity
ETP seems reasonable but its a 6.5% yield not an 8 or 9%
as I thought about the possibility of continued 1 cent increases and a doubling of the growth rate I came to the conclusion that there is a small possibility that they do move in this direction....
By doubling the rate they put the growth rate in-line/ahead of the newly stated Kinder policy.... but Kinder has a policy of paying out every last cent of available cash flow where we know the exact opposite is true here
I continue to believe that the new KMI is rather overvalued and will see an equalization with EPDs mkt cap
are you implying that we will continue to see 1 cent per Q?... IF that were to happen the dist growth rate would double..... I don't see them doing that... but they could stick to the halves and give us a special 1/4.... 1/2 or 1 cent special which would keep the annualized rate in full cent increments
The real world reality is that most entering that type of security has income well in excess of $73K which more than equalizes the distribution/dividend
Less than $73K on a combined income in the real world and I don't know where one would find $.50 to invest..... and factor in that most small income investors invest through 401Ks if they invest at all and stocks are rarely an option for "low" income investors in those vehicles
Those that are looking at yield producing equities have significant 2014 type income and $73K is nothing in 2014 terms... not to mention those with the really big bucks/incomes have to pay income rates on dividends which destroys KMI as an alternative.... so maybe the guy buying 100 shares (more than 5% of income for a less than $73K earner) if they can afford it considers KMI.... IF I'm a Dr. with a decent portfolio and I'm looking to shelter $250K do I like EPDs 3.7% tax differed yield or do I like KMIs $4.5-5% yield where I could be paying 30+% Fed + 8-10% State..... ouch.......
Sheltering income from taxes will always be a priority of investors
Look at the financials... EPD has Greater revenue... greater profit.... and less tax than the combined Kinder Franchise
yet Kinder's combined mkt cap now sits above $100 billion... and EPDs is $70 Billion.. Kinder is more than 43% greater cap... how would a 43+% pop in the EPD unit price feel
There's gonna be some movement towards equalization and now matter how you slice it EPD wins because IF our unit price increase dramatically EPDs cost of capital goes lower still.... Kinder decreases... and the cost goes right back up wiping out the reason for the deal in the first place