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Thomas Kennedy

 
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  • Kinder Morgan Relative Valuation: KMI Vs. KMP And EPB [View article]
    I am quite impressed with the management. I wrote about them in the article I link to above in the second paragraph. Since it's the same management for each company I felt it wasn't a direct contributor to a decision between kmi vs kmp or epb.
    Dec 17, 2013. 09:54 AM | 4 Likes Like |Link to Comment
  • Kinder Morgan Relative Valuation: KMI Vs. KMP And EPB [View article]
    I'd recommend strongly to talk to a tax expert
    Dec 17, 2013. 09:59 AM | 3 Likes Like |Link to Comment
  • What Is 'Quality' In A Stock? [View article]
    Very good, very approachable article with a lot of my favorite companies mentioned. As to your question on the Modern Portfolio Theory's factors (Profitability, Growth, Safety, and Payout), these follow very closely to that of the "justified P/E ratio" (see http://bit.ly/1lLALuu). This calculates, based on the classic gordon growth model for valuation, an acceptable P/E ratio for a company. The formula is P/E = (Payout ratio) x (1 + growth rate) / (discount rate - growth rate). This includes all of the 4 factors but profitability, which as described above, is the return on equity and a very important factor in determining long term growth rates.
    Apr 24, 2014. 09:18 PM | 2 Likes Like |Link to Comment
  • Kinder Morgan Relative Valuation: KMI Vs. KMP And EPB [View article]
    I am considering doing a write up on the warrants. I am a big fan of long term options, usually leaps, and use them regularly in my portfolio. I would like to do an analysis into what kmi and it's lps would look like at that point and come up with a fair value approximation.
    Dec 17, 2013. 07:07 PM | 2 Likes Like |Link to Comment
  • Kinder Morgan Relative Valuation: KMI Vs. KMP And EPB [View article]
    Yeah, I was considering putting in a kmi paragraph but decided it strayed from the point of discussing kmis relative valuation. At current prices kmr yields the equivalent of 7.4%, just under epbs 7.5% yield. I'd have no personal preference between the 2 but I'd buy kmi before either.
    Dec 17, 2013. 09:44 AM | 2 Likes Like |Link to Comment
  • The Junk Bond Market Is Telling You To Sell Stocks [View article]
    Thanks for reading and commenting. I appreciate the criticism, the average investor I know is considerably more sophisticated than the average person and next time I'll attempt to put some more ways average people can use the advice I offer. There are a number of mutual funds out there which give investors easy access to more complex strategies in an easy package but discussing those options could fill up dozens of other posts.

    Also there is a massive difference between timing and valuation. If the market is expensive it is prudent to reduce your exposure and you can benefit from buying more stocks after market declines.
    Oct 22, 2013. 06:16 PM | 2 Likes Like |Link to Comment
  • Increasing Churn Rate In The S&P 500: What's The Lifespan Of Your Stock? [View article]
    Good article, thanks for the interesting perspective and data. That makes a good case for ETFs vs mutual funds due to their ability to more tax effectively handle the churn in their portfolio.

    I would be less inclined to change my overall risk exposure by owning a greater proportion of small cap stocks (by owning a total market portfolio instead of the S&P 500), but it does make the case for owning a total market index instead of a small cap fund and a large cap fund.
    Nov 7, 2014. 09:19 AM | 1 Like Like |Link to Comment
  • Ignore Sensationalist Articles About The Market Run-Up [View article]
    I actually agree that the market is modestly expensive, and I'd prefer investing after a pullback (of course, I'd always prefer investing after a pullback). I, however, wouldn't expect much more than a 10-20% pullback over the next few years and much more likely is simply below average returns over the next economic cycle.

    This article wasn't meant to discuss the finer points of valuation, it was more about dismissing people claiming the market needs to fall 50% to get back to normal, or that we've went "too far too fast".
    Oct 6, 2014. 03:54 PM | 1 Like Like |Link to Comment
  • Ignore Sensationalist Articles About The Market Run-Up [View article]
    Thank you for reading, if I needed to summarize the article in a sentence that would probably be it.
    Oct 6, 2014. 03:41 PM | 1 Like Like |Link to Comment
  • Why This Spin-Off ETF Keeps Beating The Market [View article]
    That depends... I look to vary position weights over the economic cycle so as to reduce exposure to smaller cap and higher beta positions after protracted market gains and add to them after significant market corrections. For an investor already long csd I would recommend reducing exposure to half or a third of the maximum amount an investor would want to put into the fund. For someone without a position I would recommend adding a small position (similar to above) with the expectation of adding to the position during a market decline.
    Sep 9, 2014. 07:38 PM | 1 Like Like |Link to Comment
  • Protect Your Portfolio And Profit When Equity Markets Are Declining With The New CDS ETF [View article]
    As stated above the terminology is just somewhat reversed for CDS as shown by the names of the contracts and the notional principal stated on the proshares site
    Sep 4, 2014. 10:45 AM | 1 Like Like |Link to Comment
  • Credit Default Swap ETFs Are Not Worth The Risk [View article]
    Hi Robert,

    You have some amazing analysis and descriptions of the product but I disagree with your conclusion (on WYDE, I agree 100% on TYTE). I, like Burt above, feel WYDE is a good hedge for a high yield or equity investment due to its high negative correlations with both. I also believe that the 100 securities covered by the fund are adequate to protect a diversified high yield bond fund, and that holding the 2 series (and being able to actively switch to new series over time) is a fair method of extending the duration of credit exposure.

    I am considering writing an article on WYDE; if I do, I plan on linking to this for a contrary perspective and its thorough analysis.
    Aug 22, 2014. 03:47 PM | 1 Like Like |Link to Comment
  • Kinder Morgan Relative Valuation: KMI Vs. KMP And EPB [View article]
    I hadn't seen his name before, but I always enjoy a good discussion. I've felt the quality of the comments on this site is far above any other I've seen and I appreciate comments that agree or disagree with my opinions as both can help me grow and learn as an investor.
    Jan 1, 2014. 12:38 PM | 1 Like Like |Link to Comment
  • Kinder Morgan Relative Valuation: KMI Vs. KMP And EPB [View article]
    Hello Phil,

    Thanks for your comments and bringing up some interesting points.

    As for the difference in debt figures, my numbers are different from the one you quoted since I included in KMI's portion of debt fair value adjustments.

    As far as breaking down the "Other Net Tangible Assets" further that wasn't done for simplicity. I broke out the investments that they will likely drop down shortly as I felt these should be separated and valued differently, and considered further. As for the other items owned by KMI, I decided that PP&E and deferred taxes, etc. are reasonably approximated at book value, especially since they didn't have a significant effect on overall valuation.

    I was considering breaking down the investment value of drop down assets further but instead decided to leave that element to the reader to decide. There was not enough of a breakdown for me to be comfortable approximating a fair value for these assets, especially off the quarterly reports, the annual broke these down better. With their $6.2 billion drop down done at book value I felt it was a safe choice to leave it at book value but to allow the reader the option to adjust the value further.

    I was also considering further valuing the IDRs but, as you know, this involves considerable assumptions. Instead of trying to predict the uncertain nature of KMP/EPB's future growth, acquisitions and other dilution, etc I felt it was worthwhile to simply show how much the market is valuing this growth through my sum of the parts analysis (and give the reader historic values and management's predictions). If I were to attempt to do a fair value analysis I would have not only done that, but also came up with a fair value for KMP and EPB instead of using the market values.

    This article was less about trying to value KMI, and more about showing where its value comes from. Its easy to disagree with the details, valuation isn't an exact science. I instead wanted to give the average layman the tools to make a more informed decision between Kinder Morgan's stock or its partners on their own instead of presenting my own opinion on the matter.
    Dec 22, 2013. 08:01 PM | 1 Like Like |Link to Comment
  • A Case For Holding Some Cash In This Market [View article]
    Well written article. I like and relate to the fashion analogy.
    Dec 17, 2013. 02:02 PM | 1 Like Like |Link to Comment
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