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Larry Sohl

Larry Sohl
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  • Kayne Anderson's Kevin McCarthy: Closed-End MLPs Offer Simplified Tax Filing [View article]
    This is a nice little sales piece for Kayne. I owned Kayne funds for a few years, and made a lot of money off them. A little digging reveals some very, very high management fees associated with these funds.

    I'd love to hear Mr. McCarthy address that issue. Why buy Kayne funds when you can buy an ETN like AMJ that gives you the same kind of exposure to MLP's, but at greatly reduced management fees? What's the advantage of Kayne? AMJ also makes tax work easy (no UBTI).
    May 26 09:18 AM | 4 Likes Like |Link to Comment
  • Tortoise Energy Infrastructure: A Good Way to Invest in MLPs Inside an IRA [View article]
    KYE and KYN have horrific fees associated with them. Check that out before purchase. I'm not really thrilled with a nearly 2% fee for TYG either.

    I've gone with AMJ in tax deferred accounts. It's a MLP-based ETN, with expense ratios of only 0.85%. Author's thoughts?
    May 23 07:10 AM | 2 Likes Like |Link to Comment
  • End of the Nuclear Renaissance, the Future of Natural Gas, and the Case for MLPs [View article]
    I'll start by saying I think it would be foolish to abandon nuclear or disregard it as a key part of our energy portfolio. But....

    In the eyes of John Q. Public the details and realities don't matter. Perception trumps everything. Regardless of the inherently safe design of the plants or the fact that what happened in Japan will not happen here, all that John Q. Public sees is this little chain of history.......3 Mile Island....... Chernobyl....... and now Fukushima. After 3 Mile Island or Chernobyl, the public was told time and again how we've learned from these mistakes, and provisions have been made to ensure it never happens again. The same arguments will be made with Fukushima. Will the public buy that? It will be a tough sell. The chain of events demonstrates how difficult it is to plan for every possible scenario with 100% certainty that you've covered your bases. And in the case of nuclear power, it could be argued that covering 99.999% of your bases isn't good enough if an event like this is going to occur every 20 years, or even every 50-100 years.

    Every energy source has it's good and bad attributes, which is why I think the only viable solution to our long term energy needs is a combination of sources that includes wind, solar, natural gas, and nuclear. But the job convincing John Q. Public that nuclear belongs in that list long term just got tougher, and I wouldn't touch investments in that area with a ten foot pole.
    Apr 7 10:31 AM | 3 Likes Like |Link to Comment
  • End of the Nuclear Renaissance, the Future of Natural Gas, and the Case for MLPs [View article]
    Or... you go the ETN route with something like AMJ, which also eliminates the tax complications and avoids any issues with retirement accounts and UBTI. It has the added benefit of diversifying across a range of MLP's, although you will pay nominal fees (0.85%) for using the ETN.
    Apr 7 08:42 AM | 1 Like Like |Link to Comment
  • The Myth of Diversification or How to Really Diversify [View article]
    Totally off subject, but as a manufacturing manager "just in time" is a concept that sounds great and does cut costs. Costs of carrying inventory are reduced. However... it can get to the point of lunacy. If a company stocks no inventory and is expecting perfect delivery performance from their supplier, there can be some harsh surprises. Ask the auto companies in the Toyota food chain. A zero inventory / just in time philosophy is resulting in plant shut downs, post earthquake/tsunami. Are slightly reduced inventory costs greater then the cost to shutdown the entire business for a week or more? I think not. Companies lose millions with each day of a shutdown. My two cents.
    Apr 6 09:10 AM | 6 Likes Like |Link to Comment
  • The Myth of Diversification or How to Really Diversify [View article]
    For many years I've tried to diversify and seek out the asset classes that didn't correlate with the S&P500. Your statistics back up my belief that in recent years it's become more difficult to find this diversity. What about some other asset classes? Are emerging markets so strongly tied to the S&P? The last number I saw for this correlation was 0.52, which gives you another decent option.

    I've also diverted more of my portfolio towards MLP's. Although the MLP's have done very well for me, it's not as easy to find correlation information. The last numbers I saw were in the 0.5 - 0.65 range, which again gives you another decent alternative.

    All the experts out there... what is the best one-stop source for correlation information? Is there a single site that covers all the asset classes, and is updated regularly?
    Apr 6 08:08 AM | 10 Likes Like |Link to Comment
  • How to Invest in Dividend Stocks [View article]
    Maybe I'm an optimist (as a CVX holder), but I'd be surprised if Chevron ends up paying a dime in Ecuador. I'm guessing most investors are agreeing with that assessment, based on the lack of movement in the share price after the lawsuit's decision was announced.
    Feb 17 09:51 AM | 7 Likes Like |Link to Comment
  • 10 High Dividend and High Growth Stocks [View article]
    Point taken on leverage. It's not a highly leveraged fund, however, like QLD, TLQQ, and the like. I calculated 2010 AMJ gains at 33.5% and KYN at 33.4%. But I'll restrain my engineer-driven perfectionist side and let that go. Bottom line, I now believe AMJ is a better deal then KYN.

    Look back at my oldest postings, and I was actually a big fan of Kayne Anderson funds. I held them for a few years, and they made me a lot of money. I always hated the high fees charged by Kayne, but I foolishly believed the hoopla about problems with K-1 forms and taxes, and felt I had no other choices. However, when AMJ came along I dumped all Kayne holdings in my IRA's/401K's and converted. In my taxable investment account, I've dumped all Kayne holdings and now hold individual MLP's. I'm happier, although I'm sure many are happy with the tremendous returns their Kayne funds have been pumping out. It's easy to overlook the expenses charged by the Kayne funds when the returns are 30+% annually. However, over the long haul the expenses will eat away at potential growth.
    Feb 17 08:31 AM | 3 Likes Like |Link to Comment
  • 10 High Dividend and High Growth Stocks [View article]
    Well, I will respectfully disagree on some points, brikauffman. KYN is NOT a leveraged fund. By my calculations, considering all cash distributions, AMJ outperformed KYN last year. AMJ has expenses of 0.85%. KYN's fees are astronomical. As with KYN, you have no K-1's with AMJ. Thus, even if you don't go with the individual MLP's, an ETN like AMJ is a better choice then KYN (in my admittedly layman's opinion).

    I've owned MLP's for years. The K-1 issue is vastly overblown. I've never had to file a tax return in multiple states. TurboTax handles K-1's easily. Is it a bit of extra work? Sure. But if you can chew gum and ride a bike at the same time, you can handle K-1's.

    If I was a suspicious fellow, I'd almost suspect that a Kayne Anderson rep. might be inclined to create a bogus profile so he could post one and only one comment defending his fund. Fortunately, I am not suspicious. ;)
    Feb 16 03:42 PM | 2 Likes Like |Link to Comment
  • 10 High Dividend and High Growth Stocks [View article]
    You can look at Kayne Anderson's website. Each of their funds has a fact sheet showing the holdings for each fund. I've done exactly what YoYoMama suggested. For my regular investment account, I've bought the individual company's stocks, and avoided the fees. There are implications for holding the MLP's in 401k's and IRA's, however. To get around this, you have the option of a ETN like AMJ. AMJ's holdings are remarkably similar to some of the Kayne funds, but the expense ratios is down at 0.85%. I prefer the individual stocks, but you can hold AMJ in tax deferred accounts without getting into any tax complications.
    Feb 16 08:03 AM | 1 Like Like |Link to Comment
  • 10 High Dividend and High Growth Stocks [View article]
    I've held APU a while. I wouldn't call the dividends erratic. They've been very steady and/or rising for over 15 years. The only aberration? In August 2007 and again in August 2009 they had one time special bumps in the dividend (don't recall the reasons). It's not a glamorous, rapidly growing business. But it has steadily grown, and is sporting a dividend north of 5.5%. I'll take that any day.
    Feb 16 07:56 AM | 2 Likes Like |Link to Comment
  • 10 High Dividend and High Growth Stocks [View article]
    I once owned some of the Kayne Anderson funds. Yes, the yields can be great. However, the expenses for the funds are horrific. You are much better off simply buying some of the portfolio's holdings, such as EPD. Don't let your returns be consumed by exorbitant expenses.
    Feb 15 09:16 AM | 5 Likes Like |Link to Comment
  • Master Limited Partnerships: Pipe Dreams or Shark Jumpers? [View article]
    Thanks. Actually I had stumbled across this analysis and some others, and it's what got me thinking about this in the first place.
    Feb 9 12:23 PM | 1 Like Like |Link to Comment
  • Master Limited Partnerships: Pipe Dreams or Shark Jumpers? [View article]
    Thanks. I have always understood my personal tax implications. My greater concern is the long term viability of such a business plan. Can you keep spending billions on new ventures and equipment without generating any new revenue? Of course not. I don't see this progression with EPD, for example. They are expanding and purchasing assets, but they do show the steady increase in revenues. KMP does not. It's that intention to increase revenues that doesn't seem to be working for KMP. In my admittedly layman's opinion. Again, if someone can explain why this isn't a bad thing, I'd love to hear it and merrily go about watching my holdings rise in value.
    Feb 9 12:22 PM | Likes Like |Link to Comment
  • Master Limited Partnerships: Pipe Dreams or Shark Jumpers? [View article]
    Although I am a relatively long term KMP holder, there are some big red flags that jump out at me. Forget yield spreads. Let's look at the financials. In 2005, KMP pulled in $9.74B in revenues. In 2008, KMP pulled in $11.74B in revenues. In 2010 and 2011, revenues are projected to be near $9B. For the sake of argument then, let's say revenues are essentially FLAT for the last 6 years.

    Since 2005, KMP has spent at least $8B on capital investments, and their listed Plant, Property, and Equipment has risen from $8.8B to somewhere north of $15B. Long Term Debt has nearly doubled. Granted, there always has to be some capital investment to keep up existing equipment, but this looks odd. Quite a bit of leverage... large capital investments....but where is the benefit showing up? It's not showing up in greater revenues. Where's the payback on that investment?

    Quibble with my rough numbers if you like, but I'd love to have someone comfort me by explaining to me how you can double your distributions / payout to partners since 2005 (~$950M to likely around $2B in 2010), while your net revenue is essentially flat. Explain to me where the capital investments have gone, and why it's not showing up in terms of stronger revenues.

    I am not anti-KMP. I still hold the stock. It's been very, very good to me. But the financials, particularly since 2005 and on, don't impress me (other then the healthy, growing distributions!). Someone enlighten me on what I'm missing.
    Feb 9 10:06 AM | 4 Likes Like |Link to Comment