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Semi-retired consultant residing in beautiful northeast Georgia. Over 40 years of responsible experience in planning, finances and investment management. Primary focus is on portfolio development for retired (or nearly retired) individuals who do not possess great wealth. The Protected Principal... More
  • 2010 - More Of The Same; Or Less
    Wow! 65% percent gain in the market averages since March 2009. Let's not get carried away by this - it probably isn't going to happen in 2010.

    Spending, increased taxes, more governmental regulation and intervention, a weaker dollar, continuing high unemployment, an inflationary scenario, potential interest rate hikes, increased risk of terrorism and a general lack of concern for the American people being demonstrated by our elected officials somehow doesn't equate to a healthy return in the stock market.

    In my opinion, the first quarter of 2010 could be a continuation of the 2009 market advance, but at some point all of the above will catch up with this advance. While I am not going out on a limb to make a prediction for the market averages for 12/31/2010, I will make the following suppositions:

    1. Terrorism could be the dominant scenario for 2010. The present administration continues to downplay the country's security needs and with each day Israel moves closer to acting against Irans' increasing nuclear capabilities.

    2. The administration's rush to complete implementation of their "tax and spend" agenda before the mid-term elections could put the country in a non-recoverable mode.

    3. Printing money on a 24/7 basis will most certainly result in significant inflation.

    4. Interest rates cannot (and should not) remain at current levels. While rate hikes to the 3% or 4% level would be viewed as negative by the markets; these are reasonable and will certainly stimulate savings. It is when the Fed "over corrects" that we will be in trouble.

    5. Subtle, and not so subtle tax increases will decrease disposable income for the middle class as well as for the rich.

    6. Aside from a technical rally, the US dollar is in an almost terminal downtrend.

    7. The housing market does not show any signs of a quick recovery, particularly when coupled with a "real" unemployment rate in excess of 17%.

    The list can go on, but can anyone (except for elected officials) continue to put a positive spin on the global situation?

    In my opinion, we as investors must act in the next few months to insure our financial survival. Axel Merk's new book "Sustainable Wealth" is a recommended read for anyone interested in maintaining a viable lifestyle in the event that all of the above come to fruition.

    From my personal standpoint I am re-evaluating my portfolio and selling those stocks and closed-end funds that do not match the overall economic scenario that I point out above.

    At this time I am holding those pipeline MLP's that transport oil and natural gas across the country. These would include; EPD, NGLS and PVR (with the added benefit of coal). I also like CQP and WHX for their continued stream of high distributions.

    Am moving out of high yield bond closed end funds in favor of floating rate debt funds.

    Looking for an opportunity to increase somewhat my position in GGN, as I do not see gold correcting much more and it doesn't hurt to maintain a small position as an "insurance policy".

    My one new foray for 2010 is into currencies. I do not see a bright future for the dollar, so I am looking at the following currency funds: MERKX, JGT and GCF.

    Finally, I plan on moving a little more money into emerging markets and Australia/New Zealand funds as the opportunity presents itself. Presently watching EMF and IAF, among others.

    Aside from added caution in the investment arena, I urge folks to watch their spending and debt habits, continue saving, do everything in your power to become indispensible to your employers, and to focus on what is happening around you. Oh, and never forget to treasure family and friends.

    Disclosure: I presently have positions in EPD, NGLS, PVR, CQP, WHX and GGN.

    Disclosure: Long: EPD, NGLS, PVR, CQP, WHX and GGN
    Jan 09 10:03 AM | Link | Comment!
  • Denbury Resources and ENP
    How will the acquisition of Encore by Denbury Resources affect ENP? That remains an interesting question after watching EAC's rise of 35% or so the other day after the announcement.

    If you follow ENP as I do, you know that they recently increased their quarterly distribution. It would appear that Denbury will continue as the new general partner for ENP, and that ENP will continue their E&P activites in the west, the Permian Basin and in North Dakota's Williston Basin.

    I would think that ENP's operations would complement the Denbury operations in the Gulf Coast, and that after the acquisition is completed it would be beneficial going forward. Based upon this, I can only think that ENP's shareholders will continue to benefit from a stream of increasing distributions going forward.

    Of course, now that Jim Cramer has warned that this deal is a bad one I am even more encouraged.

    Disclosure: I am long ENP.
    Nov 03 12:28 PM | Link | 1 Comment
  • ENP, NRGY and EVEP
    Three of my favorite MLP's came through!

    ENP released earnings and distribution information on 10/27 and pleased its shareholders with a nice distribution increase. The distribution for the present quarter was raised from $0.513 to $0.5375, or 4.8%. Distributable cash flow was $34.4 million and the distribution coverage ratio rose to 1.40. Hard to complain about these type results in today's economy.

    NRGY, while not scheduled to release earnings until 11/30 announced its 32nd consecutive quarterly distribution increase. The distribution was increased from $0.665 to $0.675, or 6.3% above the same quarter last year.

    EVEP on 10/27 announced a quarterly distribution of $0.754, only a marginable increase ($0.001) over the previous quarter. However, at today's price of $24.36, this represents an annualized yield of 12.38%. EVEP continues to rate high among the exploration and production MLP's.

    Keep your eyes on these, as with oil and NG having the potentials to continue to rise, they are money in the bank.

    Disclosure: I am long ENP, NRGY and EVEP.
    Oct 29 8:34 AM | Link | Comment!
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