I like Oil

Thank you; and, you (in this thread) are to blame...

Fermion said:
Oops :D

SDLP up another 15% today to 10.73

And here I was so happy to sell at 9.47 yesterday.

It was an amazing bargain at $8 two days ago.
Click to expand...

After swearing off buying individual stocks for many years, I did pick up 3,000 of SDLP @ $8.10 a couple of days ago; with many thanks to the folks on this thread and a considerable amount of dumb luck.

Now, what to do: I have over a paper gain of 36% in two days, happy days! But, this still looks like a good buy to me at the current price; so, I am reluctant to sell. (And, I am still cash heavy anyway.)

Yes, this minor victory was dwarfed by other portfolio losses (again, paper) this months. But, it somehow makes me feel better.
 
Sell half for $11, and you essentially own the other half for $5 a share with a $2.20 per share dividend.
 
CoolChange said:
After swearing off buying individual stocks for many years, I did pick up 3,000 of SDLP @ $8.10 a couple of days ago; with many thanks to the folks on this thread and a considerable amount of dumb luck.

Now, what to do: I have over a paper gain of 36% in two days, happy days! But, this still looks like a good buy to me at the current price; so, I am reluctant to sell. (And, I am still cash heavy anyway.)

Yes, this minor victory was dwarfed by other portfolio losses (again, paper) this months. But, it somehow makes me feel better.
Click to expand...

what's your investing horizon? I would say that if it were 5 years or greater, just hold.
 
hesperus said:
what's your investing horizon? I would say that if it were 5 years or greater, just hold.
Click to expand...

I'm not sure how to answer questions about my investing horizon. Since I hope to live another 60 years and this is a very small slice of my portfolio, we could say 60 years. Truthfully, I do not know what my horizon is for this specific investment.

It seems to me that if they don't go to zero or significantly cut the dividend in the next five years, I will by holding. These both seem like fairly low probability outcomes; so, I am inclined to just hold on for the ride.
 
It isn't low probability at all. If for some reason oil stays in the 40s for years, deep water drilling is dead. Done, put a fork in it. Buying SDLP at $8 was a good deal because they have contracts covering the rigs until 2017 and later, but thinking long term on this one is hard because of the issues with oil pricing. I am always a fan of locking away some profit on these riskier ventures. It could easily do a Molycorp in 2019 or 2020.
 
(Just saw this from Reuters) - Warren Buffett's Berkshire Hathaway Inc disclosed a $4.48 billion stake in oil refiner Phillips 66 , rebuilding a bet it had made in the energy industry before oil prices fell.
 
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Did some more reading on MLPs this weekend and I feel even better about that sector.

I looked into alternative car fuels to oil and the most realistic change would be to add more flex cars which can handle oil, ethanol, and methanol. Actually its turns out most cars can already do this... It would just be a matter of a software change on the car for most people and they would have a flex fuel car automagically.

Methanol would probably be the best fuel to change to as it is the cleanest burning from what I understand and the US is overflowing with natural gas. I could see the US continuing to change from coal to natural gas power plants and methanol also become the main car fuel.

Anyway, regardless of what fuel is used MLP pipelines would be the best way to transport it.

There is also a bill in congress called the "Master Limited Partnership Parity Act" which would expand MLP status to a lot of alternative fuel sources.

Master Limited Partnerships Parity Act| U.S. Senator Chris Coons of Delaware

I think the MLP sector as a whole is going to be in good shape no matter what energy sources we use in the future. I feel more comfortable investing in an MLP index now, knowing that the sector has some future proofing. If alternative fuel sources take off my guess is that the large MLPs will make acquisitions to stay relevant.

Also saying all of that, oil might be too valuable to be burning as fuel anyway. Its amazing how much stuff oil byproducts are used for (plastics, lubricants, solvents, fertilizer, etc).
 
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audreyh1 said:
Seriously!!!

I just looked, and couldn't believe it was at $48!!! When it was $39 on Wednesday.
Click to expand...

There is a monster short interest in both oil futures and pretty much every oil and gas producer. With a pretty mild amount of fundamental good news the upside could be pretty big if all the shorts run for the exits at once. I have find memories of a widely hated small cap stock that got short squeezed from the teens to $70...
 
ESRwannabe said:
I knew it would happen eventually, but I figured it wouldn't be until 2016. Glad I went very long on the MLP sector. I got into AMLP at a share price lower than 5 years ago.
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Rises caused by short squeezes may be temporary.
 
I kind of made a big mistake selling SDLP for a 10% one day profit when now it is up 25% more :/
 
Well at this rate Boone Pickens will have his $70 oil at the end of the week
 
Fermion said:
I kind of made a big mistake selling SDLP for a 10% one day profit when now it is up 25% more :/
Click to expand...

At least you profited off it. I bought it at $14/share. I bought more at $9 but still need it to get up to almost $13 to break even.
 
Just had another $1,000 come in to invest and put it into AMLP a few mins ago. I'm going to keep adding until the oil market normalizes (i.e. completely subjective) which could mean it stays as is around $40-$50. My guess is I'll stop investing into MLPs sometime next year. I'm up to 18,250 shares in AMLP currently.

Besides MLP sector index the only other oil related bet I have is a tiny 300 shares of SDLP purchased a few weeks ago. I think I mentioned it in this thread.

Its a shame I'm so poor. I never seem to have any money. Every time I get money it burns a hole in my pocket and disappears. :facepalm:

What I'm really hopping is that the market in general tanks. I would not mind holding off ESR for 6 more years when I'm 45. If the broad market tanks I will start putting all income into Vanguard's High Dividend Yield etf (VYM).
 
Have you guys ever consider or look at
BP Prudhoe Bay Royalty Trust (BPT)

It has a nice dividend!
 
HF63 said:
Have you guys ever consider or look at
BP Prudhoe Bay Royalty Trust (BPT)

It has a nice dividend!
Click to expand...

It has a nice dividend, until...

1. Production falls off (no new drilling in PB, well output declining),

2. Profits shrink due to low crude oil prices,

These oil trusts are declining assets unless new oil is produced.

Be careful!
 
Here are 2 more ETF's that are MLP's and they seem interested!


YMLP


YMLI
 
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