Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
We're allowed to guess - right? (1) Current administration likely to enforce stronger sanctions against coal burning and other high sulfer fuels (some types of crude) than if the other guy had won - hence higher fuel costs or costs associated with emissions controls, (2) Sandy - both the damage to NE infrastructure & also loss of power consumption (sales), (3) fear of rising rates - especially with Bernanke's tenure more secure. Rising rates are bad for utilities who borrow heavily for infrastructure. Utilities tend to do well when bonds are doing well.
- Don't follow nat gas, but think the prices are near record lows, so that has to impact utilities who deliver the stuff to consumers (though they'll benefit from low gas prices to the extent they use it for fuel - a growing trend, but takes time and $$ to convert). If all that ain't enough, national weather service is forecasting above average temperatures this winter for most of the country. Lotta stuff going down here. So it goes. - (per Rono & Kurt Vonnegut:-) - Regards, hank
I'm not going to be commenting much on this board for a while, but I will note that a number of MLPs opened down fairly significantly, then recovered this AM. See LINE (which went positive earlier after being down something like 4% - about 75 min or so between -4% and positive) and others. There may be more downside, although I tend to believe that energy infrastructure may be a tad important if we are apparently going to become a global leader in energy production, as the whole IEA report discussed yesterday (although becoming a leader in anything would require leadership, something lacking in this country's gov.)
I agree with Mark's post (and what ron also said) in that I think uncertainty regarding tax increases and other things is causing people to sell, especially dividend plays. There are a number of other issues at play, although I think people are selling in part because of uncertainty regarding tax issues.
In terms of utilities, German co EON had a terrible quarter, and the company said a shift to renewable faces "huge challenges"
Elsewhere, MSFT's troubles and continued issues with Apple (http://www.marketwatch.com/story/samsung-hits-apple-with-20-price-hike-report-2012-11-11) are - I think - going to continue to weigh on the Nasdaq. MSFT's new Surface tablet users are reporting that the keyboard is quickly coming apart and that sales are only "modest", according to CEO Ballmer.
Reply to @bee: I'll be occasionally stopping by the board and will respond to anyone who directs a question to me or if I'd like to offer a brief comment on something. I was rather dismayed by aspects of the risk parity thread, and that's part of the reason why I think it's best to spend less time viewing this board and less effort commenting on it for a while. Thank you both for your comments.
Well, I suspect you have a tougher skin, than to be concerned about the risk parity thread. Our portfolio has been through the grinder a few times; being named quite boring, back in the FundAlarm days. It has also been slapped around a few times here, too. But, our house is not investing someone else's monies; and the portfolio just keeps chugging along through all of the crap the markets have presented in its path.
Reply to @scott: I'll miss your knowledge and insights. Hope your respite ain't too long. - Ya, upon reflection the RP thread turned into a disaster through no fault of your own & sorry for any part I played in making it so. Just caught the tail end after a grueling all day trip home from vacation and probably should have stayed away! Wouldn't blame David if he decided to delete the whole *#*!## thing. Regards, hank
I ran across an interesting article that talks about possible tax rate changes in 2013 to explain the recent outsized drop in utility stocks. It in part suggests there may be some "contingency planning" logic to the sizeable drop in the case of utility stocks (qualified dividends) but that the drop for MLPs may represent a "throwing out baby with the bathwater" overreaction.
Comments
- Don't follow nat gas, but think the prices are near record lows, so that has to impact utilities who deliver the stuff to consumers (though they'll benefit from low gas prices to the extent they use it for fuel - a growing trend, but takes time and $$ to convert). If all that ain't enough, national weather service is forecasting above average temperatures this winter for most of the country. Lotta stuff going down here. So it goes. - (per Rono & Kurt Vonnegut:-) - Regards, hank
Hi Hank,
All good points. I came across these possible issues as well:
Why Energy MLPs Will Beat Utilities In The Months Ahead
MLP...please
Utilities ETFs Turn Negative for Year on Dividend Tax Worries
Utili-tax-ity
http://finance.yahoo.com/news/wealthy-dump-assets-advance-cliff-210032429.html
http://finance.yahoo.com/echarts?s=LINE+Interactive#symbol=LINE;range=1d
I agree with Mark's post (and what ron also said) in that I think uncertainty regarding tax increases and other things is causing people to sell, especially dividend plays. There are a number of other issues at play, although I think people are selling in part because of uncertainty regarding tax issues.
In terms of utilities, German co EON had a terrible quarter, and the company said a shift to renewable faces "huge challenges"
http://www.businessweek.com/news/2012-11-13/eon-may-shut-plants-as-generation-unit-faces-huge-challenges
Elsewhere, MSFT's troubles and continued issues with Apple (http://www.marketwatch.com/story/samsung-hits-apple-with-20-price-hike-report-2012-11-11) are - I think - going to continue to weigh on the Nasdaq. MSFT's new Surface tablet users are reporting that the keyboard is quickly coming apart and that sales are only "modest", according to CEO Ballmer.
http://www.pcworld.com/article/2013785/microsoft-surface-rt-tablet-touch-cover-keyboard-fuels-complaints.html
Be well, enjoy and return.
Respectfully,
Catch/Mark
Thanks for your input Scott. You enrich this board so I, for one, will miss your commentary going forward.
Your recent "risk parity" thread spilled over into a second page...I have never seen that before.
Keep sharing your ideas...they've taught me a lot.
Well, I suspect you have a tougher skin, than to be concerned about the risk parity thread.
Our portfolio has been through the grinder a few times; being named quite boring, back in the FundAlarm days. It has also been slapped around a few times here, too.
But, our house is not investing someone else's monies; and the portfolio just keeps chugging along through all of the crap the markets have presented in its path.
See you in the future.
Regards,
Catch
Regards,
OJ
http://www.cnbc.com/id/49807521