thinking ahead

Answers to Recent Questions: Taxes, K-1s, MLPs, and Why These 7 Pipeline Companies

Fine article. I do wonder if some of your MLP picks still meet your "substantial" criterion.

Global Warming: Investment Implications

It just doesn't matter what we do in this country about Co2, because China and India have already said -- over and over and over -- that they will not impair their economic growth to accomodate a western obsession with climate change, since we had the benefits of the industrial revolution and they didn't. So chill everybody. Our 305MM population carbon footprint just isn't very important.

Three Coal Investments and a Sector on Fire

Sorry but I totally disagree. Coal is a very risky investment now for two reasons. First: climate change legislation. I'm not saying I necessarily agree, only that it is real and that the first giant target is coal. Second: natural gas. We are overwhelmed worldwide with this stuff. There are several new LNG facilities coming on this year to ship to the US, but we have no place for it - the shale plays have completely filled all available storage for gas. So that LNG will have to go elsewhere -- namely China. Did you see the big Exxon announcement about shipping LNG from Alaska to China recently? The signs abound. Natural gas is cheaper and cleaner. Stay away from coal, unless you are very very nimble and willing to take profits like a flash. Not for me.

Master Limited Partnerships for Your Portfolio: Three Key Questions and Answers

Here is a good web site for investors wanting to learn more (you will need to dig around in here a little though - not 100% user friendly).
www.naptp.org/

note that the author's San Francisco Money Show reference is listed as the most recent investor event on this web site. I currently own BWP, LINE, ETP, RGNC and PAA. Sold KMP and EPD for valuation reasons, but still like the stories. Got burned a little in NRP when the coal story went south. My favorite plays now are BWP and PAA which have large nat gas storage capacity and benefit from the Nat gas contango.

Smartphones: The Mobile Industry Is About to Get 'Blown Apart'

The KILLER AP is iChat -- except Apple forgot to include that (or the backward camera necessary for anybody else to do it either). The iPhone (or any other phone) screen is kind of small to watch most video content on for an extended period. But 2-way video conferencing is another matter. I expect that if Apple doesn't figure this out, somebody else will. You think people like talking on their stupid phones now? Wait until they can see each other. They will never shut up! But the handset maker will be quietly becoming very rich. And the first mover has the opportunity to establish the standards necessary for competing phones to participate in the great American YAK YAK YAK.

Capturing Higher Distribution Growth in MLPs

Some of the stuff in this article looks familiar:

On Apr 07 03:28 PM thinking ahead wrote:

> A tip for fellow MLP holders: once cashflows reach certain thresholds,
> amounts diverted to the GP increase. These are called incentive distribution
> rights (IRD's), and they usually top out at tier 3 - 50%, after 15%
> and 25% steps. Most of the more established MLP's have already reached
> the top 50% IDR level (e.g. KMP, ETP, OKS). EPD is an example of
> a MLP that has a lower IDR threshold - 25% maximum.
>
> Once MLP's reach tier 3, the distribution growth typically slows
> - not stops, just slows - because more of the growth is being sent
> to the GP. It's all a way to incentivize the GP to do a good job
> for the MLP unit holders.
>
> One way to take advantage of this is to buy the GP's. But there are
> far fewer available, because these are the most profitable parts
> of the partnership structure and the smart guys like Kinder and Dan
> Duncan and Lowes like to keep the GP slot for themselves. But there
> are some available. One that has reached the 50% IDR limelight is
> ETE. ETE is the GP for well known ETP. If ETE follows the past pattern
> it should start to boost dividends significantly, while ETP grows
> somewhat slower that in the past. I've left some detail out to keep
> this post short, so do your reading. Disclosure: I own both ETP and
> ETE, along with KMP,BWP and EPD.

Emerging Market Equities Now Far More Interesting than U.S. Market

re: "Their American counterparts have seen life as a perpetual spring break interrupted by brief episodes of work..."

Your lazy US student/worker image is specious. Everybody I know in America has been working their butts off for the past 25 years, and that includes most students. Statistics regarding our average national workweek and annual vacation days confirm this. Your own situation may be different.

MLPs: Success Story in an Otherwise Dismal Quarter

Contrary to almost everybody else I don't think KMP (or KMR) is the safest MLP, though it is the largest. I do own KMP, but worry somewhat about the exposure to CO2 during this oil down cycle. I'm not OVERLY worried, or I would have sold. But I also note that KMP has not behaved as well in the past 6 weeks or so as my other MLP holdings. I would put a HOLD on KMP, a buy on BWP and ETP and a strong buy on ETE and EPD. Disclosure: I own all of these.

Master Limited Partnerships: An Island of Stability for Dividend Investors

A tip for fellow MLP holders: once cashflows reach certain thresholds, amounts diverted to the GP increase. These are called incentive distribution rights (IRD's), and they usually top out at tier 3 - 50%, after 15% and 25% steps. Most of the more established MLP's have already reached the top 50% IDR level (e.g. KMP, ETP, OKS). EPD is an example of a MLP that has a lower IDR threshold - 25% maximum.

Once MLP's reach tier 3, the distribution growth typically slows - not stops, just slows - because more of the growth is being sent to the GP. It's all a way to incentivize the GP to do a good job for the MLP unit holders.

One way to take advantage of this is to buy the GP's. But there are far fewer available, because these are the most profitable parts of the partnership structure and the smart guys like Kinder and Dan Duncan and Lowes like to keep the GP slot for themselves. But there are some available. One that has reached the 50% IDR limelight is ETE. ETE is the GP for well known ETP. If ETE follows the past pattern it should start to boost dividends significantly, while ETP grows somewhat slower that in the past. I've left some detail out to keep this post short, so do your reading. Disclosure: I own both ETP and ETE, along with KMP,BWP and EPD.

The Gas Price Roller-Coaster: It’s Not an Amusement Park Ride

Good article and some interesting information about Utah. I like the NG investment options even without the move to NG cars. Of the two types you mention I own more of the MLP's because of their very high dividend rates and steady earnings. Instead of CHK stock I like their convertible bonds. In both cases I'm willing to trade big upside for modest (10%+) upside and less volatility.

PotashCorp and Mosaic: Get Your Orders Ready

I've been doing this same thing for years (although not on MOS -- yet), Yikes! I'm a chartist! Is there a secret handshake or something?

Is Whiting Petroleum Undervalued?

I'm really proud of this one. Bought it at $37. What a great team. Simple explore - develop - produce circle. Minimal downstream assets and a really really good nose for property. From CEO to land man to roughneck, WLL is a fine company.

Anadarko Petroleum's Positives Outweigh Negatives

Why shouldn't APC do what every single NOC on earth is doing to APC and others? The energy business has changed, and everybody has to adjust. The LP's can vote with their feet. But I doubt many will.

Transocean: Drilling For Profits

One more point in RIG's favor: building new drillships is onerous enough. But finding and developing the on-rig talent to keep these things working safely 24/7 is a huge problem for every driller. Both RIG and DO are way in front on this, and have several campuses around the world to train new staff. Will some get picked off by others? sure. But that deep pool of talent is going to be just as valuable as the platforms themselves in the decades to come. I have been sitting on these stocks since 2006 and see no reason to budge now.

Petrobras: Extremely Overvalued

I like this report. Keep them coming, please. I've also passed on PBR but play Brazil oil through DO and RIG. I agree that PBR is being run like a lot of NOC's, i.e. for the benefit of the "people" not the owners. But the company is snapping up drill ships at every chance.