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I sold my energy and MLP funds several months ago on an energy bounce...I had small losses, but it looks like the right decision now. I would like some opinions on buying back into them. I had been thinking of doing this at the end of the month, once tax-loss selling is over, but it appears that blood is in the streets now. Too early still? Thanks in advance for opinions!
For those who feel like really rolling the dice, Kinder Morgan warrants are now.... (drumroll)....11 cents. They were $5.50 or so in April. I continue to ponder the Kinder preferred.
I am not selling what I have left in terms of oil-related names (pipelines), but I'm glad that what I had in terms of oil producers months ago went into financial/commodity exchanges (CME, ICE.) ICE in particular has done quite well since the oil decline started. I will probably not be going back into oil producers, but may add to pipelines but I am waiting to see how the situation goes - I'm willing to miss the initial few % of a turn rather than trying to pick bottoms.
I only just last week initiated a miniscule toe-hold in COP ConocoPhillips, and will very slowly grow it. (Their DSPP is about the best I've seen in terms of simplicity. The charges all come at the back-end, when selling, and it's not unreasonable at all.) I bought at $53.12, and a bit more will be recorded tomorrow (already sent and noted as "pending,") and the stock is today at $48.21. I intend this as a long-term position. If it takes even a few years for oil to bounce back, I'll be growing my dividend, which is being reinvested. 5.5% yield....In the back of my mind, I keep remembering the airlines barely able to stay afloat, (and the airline bankruptcies!) until oil swooned, and now I note HA at about 30 for 40 X where it was just several years ago. In the same vein, I don't want to look back and see that I missed the best entry-point for the biggest oil E & P company in decades or maybe my lifetime. (Jeez, if only I had money to invest, back in the '90s!) COP is shortly to have a conference call re: 2016 plan, and has a cost-cutting plan already underway, re-aligning its portfolio into cheaper sources of product. The company says in a "forward-looking statement" that they expect to become profitable again, in 2016. https://www.flashratings.com/stocks/3529-COP?in=true
" I don't want to look back and see that I missed the best entry-point for the biggest oil E & P company in decades or maybe my lifetime. "
It was $28 in 2009 at the bottom from around $73 at the high. This time around, it has gone from $86 to $47. Good luck to you and hopefully it will work out well longer-term, but I wouldn't have this as a huge % of your portfolio (if you want to have a long-term holding and it may take a year or two for the turnaround to happen, it's a lot easier when it's not a huge portion of your portfolio that's underperforming) and I do think if you want to add further, you may have another opportunity.
My energy exposure are two mlp funds, TMPLX and INFIX, which were bought when I switched from AMLP. Needless to say, I am down about 45% from when I bought them a year ago. I am in the process of deciding whether to just take the loss and sell, based on the fact that they would now have to almost double to get back to even. I don't see that happening in the next 3-5 years. This is in my IRA, so it is long term money, but I may be better off just putting these monies into S + P Index which in my opinion has a better chance of positive results at a faster pace than midstream pipeline companies.
Would love to hear some thoughts on this. Otherwise, I am very well diversified with stocks, funds etfs and 30% bonds. Do not need to tap IRAS for at least 6 more years when RMD starts.
@slick I'm certainly no expert, but at this point, I would probably wait and see what happens EOY and beginning of 2016...just from a tax loss selling standpoint. If it looks like it's going to bounce, maybe you could hang on and recoup some of it...depends a lot on your pain threshhold.
Pain threshold is ok, I just think its going to take quite a while to come back. I would have sold this way before now if it was in a taxable account. Since its money I don't need right now, can afford to wait, I just have to see if putting that much time into it is warranted.
I've been hearing all year about how *wonderful* an investment is in the MLPs and insider buying was often cited as one of the reasons. Meanwhile, in the real world ETE is 61% off its one year highs and ETP off 50%.
08/12/2015 Energy Intelligence Report In this week’s newsletter, we will take a quick look at some of the critical figures and data in the energy markets this week. We have followed the EIA crude oil inventories closely, as they represent a rough proxy for oil supply/demand balance. Rising inventories indicate production outstripping demand. • The chart shows that inventory levels in 2014 began to detach from the five-year average, rising at an accelerated rate at the beginning of the year as U.S. oil production continued to climb. The jump above the five-year average corresponds with the beginning of the decline of oil prices from the June 2014 peak. • About 55 percent of the U.S.’ oil storage capacity is located along the Gulf Coast. Cushing looms large because of its basis for the WTI benchmark. But it holds just 13 percent of the country’s storage capacity. • The EIA says that the crude oil storage utilization at Cushing and the Gulf Coast is at 70.2 percent, a touch below the record utilization rate of 71.2 percent set in April 2015. Near record-high inventory levels continue to weigh on oil prices.
Tuesday December 8, 2015 Crude oil prices plunged to new lows on December 7, following on the heels of OPEC’s decision to scrap its production target last week. The markets are reaching new depths of pessimism, with WTI and Brent breaking fresh seven-year lows, dipping below the nadir from earlier this year.
The decision to scrap its production target stems from the increasing competition between Saudi Arabia and Iran. As Iran has the intention of bringing 500,000 to 1 million barrels of oil per day back online within the next year, Saudi Arabia decided to abandon all pretense of a production ceiling. As we reported in last week’s newsletter, the practical effect of removing the ceiling will likely be minimal – OPEC members were ignoring it anyways.
But by erasing the production target from its official policy, Saudi Arabia and Iran could engage in increasing pricing competition and fights for market share. All OPEC members, except for Saudi Arabia, are producing flat out. Iran will soon be doing the same. http://oilprice.com/newsletters/free/opintel08122015
Wait a minute. Isn't KMI the old KMP people who left their shareholders holding the bag and owing major taxes? Thought so. I are one. Stick 'em in their pipeline,
On the positive side hawkmountain, I just found my tax loss candidate for the year. It may spike to the upper teens before the end of year, but who knows.
I was not impacted as you were on KMP, but at this point Richard Kinder is not to be trusted....at least with my money.
@Mark Well, that didn't take long; I thought they'd at least ruminate about doing it for a month or so. Perhaps things are more acute than they appear (which is bad enough)? From 51/qtr to 50/yr--- whew, hello sailor!
Good memory, @hawkmountain. More and more, it is looking like this entire sector, and the people who populate these businesses, will be great destroyers of OPM before all is shaken out.
@little5bee You might want to go back and read a white paper I posted several months ago. The guy made a strong case for the decline of the MLP business model; peruse the last couple of financial reports of any MLP you might be considering for reentry, and you can see he probably has it more right than wrong. Now, even then, you might still think you can grab a good dvd. and avoid problems by investing in an ETF or CEF potpourri of MLPs, but IMO the trend here is not your friend and that would be a little bit of Magical Thinking. http://www.mutualfundobserver.com/discuss/discussion/comment/69515/#Comment_69515
I am not biased so here's some positive news on the MLPs. I just hope the "after the fact" brigade here doesn't come in later and tell us how they bought more near the lows.
Still holding REXX and COG, as they decline further, wondering what 2016 might hold.
OT, speaking of hindsight types, I was at a dinner party last weekend and the host, retired from Wellington, opined that he had shorted builders in 05 and then gone long bigtime spring 09. I muttered "Sure you did, everyone says that, or wants to, or wishes they had." The next day I mentioned this to one of the investment plutocrats I play geezerball with, and he said "Well, actually, if he was with Wellington, it's probably true...."
Comments
I am not selling what I have left in terms of oil-related names (pipelines), but I'm glad that what I had in terms of oil producers months ago went into financial/commodity exchanges (CME, ICE.) ICE in particular has done quite well since the oil decline started. I will probably not be going back into oil producers, but may add to pipelines but I am waiting to see how the situation goes - I'm willing to miss the initial few % of a turn rather than trying to pick bottoms.
https://www.flashratings.com/stocks/3529-COP?in=true
It was $28 in 2009 at the bottom from around $73 at the high. This time around, it has gone from $86 to $47. Good luck to you and hopefully it will work out well longer-term, but I wouldn't have this as a huge % of your portfolio (if you want to have a long-term holding and it may take a year or two for the turnaround to happen, it's a lot easier when it's not a huge portion of your portfolio that's underperforming) and I do think if you want to add further, you may have another opportunity.
Would love to hear some thoughts on this. Otherwise, I am very well diversified with stocks, funds etfs and 30% bonds. Do not need to tap IRAS for at least 6 more years when RMD starts.
BGH
Oil And Gas 17.17%
10/31/15 Fact Sheet
http://www.babsoncapital.com/funds/closed-end-funds/babson-capital-global-short-duration-high-yield-fund
Reminder
DoubleLine Total Return Webcast titled "Tick, Tick, Tick..."
Hosted by Jeffrey Gundlach
Tuesday, December 8, 2015 1:15 pm PT /4:15 pm ET/3:15 CT
http://www.prnewswire.com/news-releases/jeffrey-gundlach-to-hold-webcast-today-on-doubleline-total-return-bond-fund-300187399.html
08/12/2015
Energy Intelligence Report
In this week’s newsletter, we will take a quick look at some of the critical figures and data in the energy markets this week.
We have followed the EIA crude oil inventories closely, as they represent a rough proxy for oil supply/demand balance. Rising inventories indicate production outstripping demand.
• The chart shows that inventory levels in 2014 began to detach from the five-year average, rising at an accelerated rate at the beginning of the year as U.S. oil production continued to climb. The jump above the five-year average corresponds with the beginning of the decline of oil prices from the June 2014 peak.
• About 55 percent of the U.S.’ oil storage capacity is located along the Gulf Coast. Cushing looms large because of its basis for the WTI benchmark. But it holds just 13 percent of the country’s storage capacity.
• The EIA says that the crude oil storage utilization at Cushing and the Gulf Coast is at 70.2 percent, a touch below the record utilization rate of 71.2 percent set in April 2015. Near record-high inventory levels continue to weigh on oil prices.
Tuesday December 8, 2015
Crude oil prices plunged to new lows on December 7, following on the heels of OPEC’s decision to scrap its production target last week. The markets are reaching new depths of pessimism, with WTI and Brent breaking fresh seven-year lows, dipping below the nadir from earlier this year.
The decision to scrap its production target stems from the increasing competition between Saudi Arabia and Iran. As Iran has the intention of bringing 500,000 to 1 million barrels of oil per day back online within the next year, Saudi Arabia decided to abandon all pretense of a production ceiling. As we reported in last week’s newsletter, the practical effect of removing the ceiling will likely be minimal – OPEC members were ignoring it anyways.
But by erasing the production target from its official policy, Saudi Arabia and Iran could engage in increasing pricing competition and fights for market share. All OPEC members, except for Saudi Arabia, are producing flat out. Iran will soon be doing the same.
http://oilprice.com/newsletters/free/opintel08122015
KMI cuts dividend by 75% sticking a sharp stick right in the eyes of their investors.
http://www.forbes.com/sites/christopherhelman/2015/12/08/under-fire-kinder-morgan-slashes-dividend-shares-sink-in-after-hours-trading/?utm_campaign=yahootix&partner=yahootix
I was not impacted as you were on KMP, but at this point Richard Kinder is not to be trusted....at least with my money.
I think I'm out of the oil patch completely.
Good memory, @hawkmountain. More and more, it is looking like this entire sector, and the people who populate these businesses, will be great destroyers of OPM before all is shaken out.
@little5bee You might want to go back and read a white paper I posted several months ago. The guy made a strong case for the decline of the MLP business model; peruse the last couple of financial reports of any MLP you might be considering for reentry, and you can see he probably has it more right than wrong. Now, even then, you might still think you can grab a good dvd. and avoid problems by investing in an ETF or CEF potpourri of MLPs, but IMO the trend here is not your friend and that would be a little bit of Magical Thinking.
http://www.mutualfundobserver.com/discuss/discussion/comment/69515/#Comment_69515
http://blogs.barrons.com/incomeinvesting/2015/12/08/a-pause-in-mlp-negative-feedback-loop/?mod=BOL_hp_blog_ii
OT, speaking of hindsight types, I was at a dinner party last weekend and the host, retired from Wellington, opined that he had shorted builders in 05 and then gone long bigtime spring 09. I muttered "Sure you did, everyone says that, or wants to, or wishes they had." The next day I mentioned this to one of the investment plutocrats I play geezerball with, and he said "Well, actually, if he was with Wellington, it's probably true...."