You're being way too pessimistic and showing signs of panic. Get control of yourself. When I see posts like yours, I know the bottom is near. Panic is the greatest enemy of your wealth. Buying opportunities like this don't come alone often enough to suit me, and I'm taking full advantage of this one while there's time. Put your open, limit buy orders in well under the market, and just stop watching it. I bought MMP that way at $67 yesterday, and look at it now.
The die-hard bulls on MCD are getting a severe dose of reality. MCD has 3 things going against it; their boring food, their lousy service, and the overall stock market. I seriously doubt that it will get anywhere near $60, but I can believe $84. That's realistic, and I'd call it a buy at that price. That is, unless they have a disastrous earnings/revenue report. I believe this correction will be over before year-end and will prove to have been a good buying opportunity. There are only a very few things that could derail that, such as a full-blown Ebola epidemic. If you take Ebola off the table, the bears will be in retreat sooner than most people think. I've been very bearish on MCD, but I'm now more neutral at $90.
I tend to agree. MMP had its own, personal wash-out when it got down to $66.36. My gut feeling is that we've seen the low. If it couldn't break down today with the overall market tells me that the worst is over. Up $5.37 in an otherwise terrible market has to be taken seriously. I say that anyone who wanted to get out has already done so. The panic selling could easily turn to panic buying, not to miss out completely on a move to new highs - possibly by year-end. If you look at the long term chart, MMP has had some dramatic moves, both up and down. We had an exaggerated "V" bottom yesterday and another test today (10/15). IMO, MMP is going up from here. All aboard... the train is leaving.
This is especially encouraging given the horrible market today. I don't expect a dramatic recovery to match the severity of the sell-off, but up a little is still better than down a lot. The skies will be blue again, someday.
Don't panic! Resist the urge to dump and run. Now is when you should be buying, not selling. This drop is not the end of the world (but it sure looks like it.) Put in open buy orders well below the market and pick up some great bargains. Exports are going to be important to a price recovery in oil to take the oversupply off the domestic market, and EPD looks to be way out ahead with the takeover of OILT. IMO, that will turn out to be a brilliant move.
You're on the right track. I was looking for a near-term bottom at about $66 based on nothing more than a pure guess. Having a limit order in way below the market will give you the best chance to pick up a real bargain. This company is not going out of business. They seem to be financially sound and growing despite what the unit price has done lately. IMO, buying below $70 makes good sense and is likely to be well rewarded. (Below $70 could also mean $60 or $50 or $40.) Resist the urge to panic and run for the hills. You'll be kicking yourself when the inevitable rebound comes.
Looks as if the argument is settled; cheaper oil is bad for MMP. In fact it's disastrous for MMP, at least as far as the unit price is concerned. I'm amazed at how suddenly the sentiment reversed itself. The momentum is clearly negative. It's more like a stampede for the exits with no buyers in sight. This kind of panic selling can reverse just as quickly as it started, but I don't see any sign that it's about to happen anytime soon. There was no question that it was overbought, but it may be getting oversold at the present price. One thing seems fairly certain; it will take a lot longer to go back up than it took to go down.
When Zacks is wrong, they're disastrously wrong. Now Cramer is down on MMP, also. With huge selling and a severe shortage of buyers, it looks bad for at least the near term. To make matters worse, the Russians are pulling most of their troops back from the Ukraine border in an apparent signal that the sanctions are taking a heavy toll. That could push oil even lower as Russia is heavily dependent on oil revenue to keep their economy afloat.
Unless and until it becomes legal for U.S. producers to export oil, the surging production will create a glut that will fill storage tanks to capacity. We simply don't have refining capacity to make use of all the crude that can be extracted with modern technology. That's very bad news for MMP. The low price of oil may be good news for end users (consumers), but it's bad news for producers and midstreams. If producers start to cut back on production, the strongest part of the economic recovery will be stopped dead in its tracks. If the government allows exports to take the excess supply out of the market, the price will quickly stabilize. If not, we're likely to see still lower prices but less demand because of limited storage and refining capacity. There's only so much we can use unless we bring back millions of 10-MPG cars from the 1950's and pull all the insulation out of millions of houses. Not going to happen!
It all depends on which comes first; the chicken or the egg. Does increased demand cause the price to fall, or does the drop in price cause the supply to increase? If usage increases as a result of lower prices, then the price will quickly rise. That's economics 101. The forces of supply and demand rule the day. The price depends largely on whether U.S. oil exports will be allowed to take some of the excess supply out of the system. If production is cut back as a result of lack of storage or refining capacity, then less oil will be pushed through the pipes. It won't have anywhere to go. A more immediate confirmation that I'm correct is the fact that MMP has gotten pummeled mercilessly as the price of oil has declined. If the drop in oil prices was likely to result in increased fees for the midstream operators, we'd have seen higher unit prices by now. I rest my case. (I own a ton of MMP and sincerely hope your theory is correct, but I don't think so. ☹)
Massive selling and no buyers is taking a heavy toll on MMP. Volume by 11:00 is nearly double the average daily volume. The V bottom this morning might have cleared out the panic sellers, but it's way too soon to tell for sure. Pretty ugly, though. Thanks Zacks!
I'm of the opinion that cheaper oil does NOT bode well for companies like Magellan Midstream. Just the opposite. Cheaper oil reflects lower demand which means less oil moving through the system. The reaction today to the drop in oil prices seems to confirm that. I hope I'm wrong.
I'm following my own advice and buying more. It looks as if I was right about the correction, but that was a no-brainer. Anyone who didn't see it coming is blind. I also bought a ton of MMP. Use corrections to your advantage. Buy wholesale and sell retail. Most importantly, ALWAYS USE LIMIT ORDERS! These names are very thinly traded with big spreads.
Well, I guess Ebola is now with us, and it didn't take a terrorist to bring it here. It has also jumped to Spain where they're far less equipped to deal with it. Is the one case in Texas the end of the story? I doubt it (but I hope so.) Now that we've seen how easy it was for someone to unwittingly bring the virus here, think how easy it would be for someone to do it intentionally. Officials are frantically working overtime to quell panic, but first they have to convince themselves that there's no reason to panic. They're intentionally downplaying the threat, and they're avoiding at all costs even the mention of terrorists in the same breath as Ebola. They're not stupid enough to have overlooked that possibility; they're just hiding it.
I can't agree with your logic on any of this. Splits are totally meaningless; BRK proves it beyond any doubt. You're correct that MMP appears to match EPD on splits, but I have to ask SO WHAT? They're totally different entities and probably don't talk to each other. EPD went up slightly after the split, but that's more likely because of old-fashioned fundamentals. Both MMP and EPD are thinly traded, but the spreads have stayed relatively the same. In theory, more float narrows the spread. Regarding the yield, the current yield is the only thing that you should look at when trying to place a value on the units. The yield on the units that you bought in the past doesn't mean bupkus to someone buying at today's price. MMP has increased the payout much faster than EPD recently, and that's probably mostly responsible for MMP's better price performance. Both are excellent income producers with a super growth factor. I don't particularly need the income, but the growth potential is what gets my juices flowing. We're about a month away from the next distribution, and I'd be interested in seeing your guess as to how much it will be. The last payout was $0.64, which followed the May payout of $0.613, which followed $0.585 in February. My guess is $0.658. Anything over $0.665 should give some lift to the unit price, IMHO. Anything below $0.65 will be a big
negative and a big surprise. Regarding a split, I'd be perfectly happy to not see it happen below $120. I like the thin trading of MMP as it gives me more opportunities to pick the low-hanging fruit on limit orders. I've done it numerous times with great success. Anyone who uses market orders with thinly traded stocks/units is just begging to be ripped off. Why pay retail when you can buy wholesale?
The only thing I know is that TRV has outperformed CB for almost as long as I've owned them. They've both done fairly well, but TRV has done a lot better.
Chubb has had a very tough time breaking above 94 recently. A continuation of today's very strong move up to $94 could be significant in the next few months. My gut feeling is that CB could make another attempt to get to par, but I've been disappointed too many times to really get optimistic. I'm expecting a minimal increase in the dividend when they announce, so that won't help. My insurance agent doesn't like either one for investment, but he's an idiot. His opinion is nearly always wrong. He's a typical rabidly conservative critic of everyone. He's also a racist, anti-Semite, homophobic, xenophobic, bigot. I need a new insurance agent!
You're not going too far out on a limb by predicting MCD will be in the 80's before long. That's a conservative target, IMO. Given the poor revenue and earnings figures lately, I'd look for the mid to low 80's. Interest rates are poised to start moving up which will make the present dividend yield unattractive to new money. The simple fact is that McDonald's has gotten too unwieldy to be efficiently managed. Opening more and more restaurants is not the solution to their problems. The company's best days are behind it, at least until they find new top managers who have the vision and knowledge to set the company on a new path. I've been out of the stock since it crossed above par, and I won't be back until I see about $85 or lower. Meanwhile, I'm enjoying my gains in EPD plus the 5% discount on shares bought in the DRIP.
Thanks. On a serious note, it's amazing how many novice investors think a stock split is some sort of magic elixir to juice up a sick stock price. MCD is already one of the most widely held stocks in the huge universe of stocks, so "appealing to new investors" is not likely to have any effect one way or the other. The kind of investor who buys tens or even hundreds of shares is not what MCD needs. Institutional investors, the kind that will move the stock, are what are needed to move it higher, and those investors will buy only if and when the company gets the sales and earnings growing robustly again. If the present management can't achieve that, they should be replaced. "Special" dividends and buybacks, especially when financed with borrowed money, is nothing more than a bribe to get small investors to buy the stock. That's nothing more than a move of desperation on the part of management to save their jobs. Building debt to finance totally non-productive payments to shareholders isn't going to help the company in the long-term.