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  • BKLN: Higher Yields Without The Duration Risk [View article]
    Thanks for the compliment. The way they report (i.e. just credit rating and duration - rather than by business sector), it's not easy to figure out.
    Oct 9, 2015. 10:10 PM | Likes Like |Link to Comment
  • BKLN: Higher Yields Without The Duration Risk [View article]
    Another good article CWM - thanks. It should be mentioned that an added factor in favor of having an allocation to BKLN is that the exposure to energy debt is less than 5%, as compared to other high yield fund exposures exceeding 15%.
    Oct 9, 2015. 03:47 PM | Likes Like |Link to Comment
  • A Review Of Master Limited Partnerships [View article]
    Yes DJH - there is no other available shipping in the area negotiated. Therefore, why did WMB (acting as the general partner of WPZ) make any concessions? It is an inescapable conclusion that CHK was in a situation that nearly guaranteed shut in of capacity. What WMB did was to make the best of a bad situation. The price was lowered, and there would have been no other place for any volumes - be they lower, higher or unchanged. I have not seen the terms of the deal, but as far as I know there is STILL no guarantee on minimum volume. The greater benefit is realized by CHK, since WPZ has lowered their breakeven. WPZ benefits only to the extent that they continue receiving revenue from the shipped volume. But the supposedly "safe" revenue is now cut. I fully expect that this kind of reality is behind the re-pricing of the entire midstream sector.
    Oct 9, 2015. 02:13 PM | Likes Like |Link to Comment
  • A Review Of Master Limited Partnerships [View article]
    I'm with you Greg (not a tax expert). And I agree that the roll up of the MLPs provided tax relief - after all, a ~21% rate for a C Corp is rather low. My point is that I consider it significant, not immaterial. Add to that the individual tax rates we pay upon receipt of dividends and that is a large difference between KMI and the MLP space (supposed to be) discussed in the article.

    My larger point for those wishing to continue analysis of KMI as an MLP (i.e. using non-GAAP metrics) is that such a view flies in the face of the reason Congress created the MLP business form in the first place. Taxes - at both the corporate and individual level - are a BIG DEAL.
    Oct 9, 2015. 10:54 AM | Likes Like |Link to Comment
  • A Review Of Master Limited Partnerships [View article]
    The jury is out DJH. Williams recognized their risk in their renegotiation with Chesapeake. Would this contract have been counted in the 70%-80% considered to be "safe?"
    Oct 9, 2015. 10:35 AM | Likes Like |Link to Comment
  • A Review Of Master Limited Partnerships [View article]
    Greg, I actually supplied those numbers to Steve Rasher. I guess you also disagree about what is a significant number. They are paying a 20% rate, after which the taxpayer will pay their marginal rates. So, "deferred" is not "wiped out."

    Good luck to you.
    Oct 8, 2015. 10:44 AM | 1 Like Like |Link to Comment
  • A Review Of Master Limited Partnerships [View article]
    You ought to actually check out the tax that KMI paid before commenting. It was significant.
    Oct 8, 2015. 01:30 AM | 3 Likes Like |Link to Comment
  • A Review Of Master Limited Partnerships [View article]
    Yes, neither KMI or WMB are limited partnerships, so there is some question of expertise here. Further, since the market has seemingly recognized the risks in the sector (at a minimum shipped volumes are at risk), it would seem that what defies logic is an article that doesn't examine that rationale. Certainly the sector can recover, but this advisor has kept client money in a clearly problematic sector. Rule #1 - don't lose money. And please, not selling does not mean that nothing has been lost.
    Oct 8, 2015. 01:26 AM | 4 Likes Like |Link to Comment
  • Scrutinizing Investing In Insurance Stocks Through ACE, Chubb, AFLAC And Allied World [View article]
    Two crucial considerations about the investment conservatism needed to produce long term returns were not even mentioned in this article (which had a couple strengths and several weaknesses).

    Company management can be assessed by 1) what has the share count been doing long term (this speaks to book value management)? 2) How often are reserves added to cover prior year(s) losses (this speaks to underwriting discipline)?

    I'm long AWH. The answer to 1) is about 30% of shares repurchased over the past 10 years, and 2) I don't think they have needed to add to any prior reserves over the past 10 years.
    Oct 5, 2015. 05:10 PM | Likes Like |Link to Comment
  • Emerson Electric A Risky Play For Dividend Investors [View article]
    Maybe stop watching so much? Interesting return stats from Fidelity on the top 3 types of investors:

    1. Dead people
    2. Those who forgot they had the account
    3. Women (in general).

    The first two are not emotionally engaged, and are therefore inactive. I guess women (in general) might be reluctant to do anything if they don't understand markets, and are also inactive. Just a guess.
    Oct 5, 2015. 10:17 AM | 1 Like Like |Link to Comment
  • Kinder Morgan Breaks It Down [View article]
    RLP, it kind of reminds me of a time when lots of banks had NPAs sitting on their balance sheets for quite some time. Some are still there if they weren't sold for a loss earlier. It makes me wonder how uneconomic energy could be different than uneconomic houses.
    Oct 3, 2015. 03:00 PM | Likes Like |Link to Comment
  • Kinder Morgan Breaks It Down [View article]
    Pen, assuming you really wanted to know which producers are shutting in production the info is out there all over the place. NFG had shut in more than 19 Bcfe by May this year. And they even have vertical integration! The latest story I'm aware of is Stone Energy as of Sept.

    I agree that demand has a role in production, but only to the extent it influences pricing. Do you see that happening via increased commodity prices? I wonder what explanation you postulate for why the pipeline sector had corrected so radically? No one has a rational view of how secure (or not) the cash flows are?

    I'm not going to continue this thread with you, since our discussions rarely have any value to me. Your presuppositions often appear to influence your perception of reality. That's natural, and I'm subject to the same thing. But I try to be open to alternative interpretations, especially when events indicate I'm not getting it right. So far, the idea of selling the pipelines when complacency was at a maximum was the right move. I intend to buy them again at some point.
    Oct 3, 2015. 02:44 PM | Likes Like |Link to Comment
  • Kinder Morgan Breaks It Down [View article]
    Fee based IS exposed to commodity prices. Per the data shown, 65% of DCF (actually an MLP term inappropriate to KMI which is a C corp) is not at price risk unless counterparties go BK.

    BUT, all the rest is subject to commodity prices to the extent that cash flow negative E&Ps would stop producing entirely. That is why the market is reacting. It's not irrational, the risk is real as producers begin to shut in production which has no margin above lifting and shipping cost.

    I'm still long a token KMI position, but I began getting some great premiums writing OTM puts. I'll take assignments at $22.50 and $25.
    Oct 2, 2015. 08:54 PM | Likes Like |Link to Comment
  • What Stone Energy's Shut-In Says About Marcellus Breakeven Prices [View article]
    Richard and Danielle, this really isn't even a dispute unless either of you actually has data about what the relevant processing contracts actually say (so, do either of you have anything definite about that?). AFAIK, that data is not public for very many (if any) E&Ps. Even the minimum commitments for take away capacity is very difficult to tease out of the various parties' (including the pipelines) filing documents.

    Danielle, this was another great article that offers your thoughts about what can be concluded - regardless of whether one ends up in agreement. And again, I recommend readers visit your web site Good reading.
    Oct 2, 2015. 08:01 PM | 2 Likes Like |Link to Comment
  • Emerson Electric A Risky Play For Dividend Investors [View article]
    I wasn't aware of that commission policy at Fido. Thanks! (Do you have a link stating the policy, or is it negotiated?)
    Oct 2, 2015. 03:36 PM | Likes Like |Link to Comment