I like Oil

[Fermion]

I don't know all of it either but I am not sure SDLP has guaranteed anything related to NADL. JF will probably come out ok like he always does.

[Mulligan]

No wonder I keep my investments simple... Oil down today, so I thought about having a little fun. Instead of playing with companies just bet on the price of oil, with an oil fund. Well that wont work either. Certain ones involve K-1 forms, give me a break, I am not dealing with that for a small bet... Ok, now I found ETN's... Im thinking ok, these have traditional cap gains and losses, though there is risk in underlying issuing company going bankrupt. So, I can accept that risk except now I read these notes aren't truly tracking oil, and the underlying value of the oil is considerably less than the inflated trade price. Meaning, I assume too many people are thinking like me. Well so much for this idea.....


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[Car-Guy]

Quote:

Originally Posted by Mulligan Oil down today, so I thought about having a little fun. Instead of playing with companies just bet on the price of oil, with an oil fund. Sent from my iPad using Tapatalk

You may be right. Today is looking like it could be a day to bet on black (oil) and hope it doesn't keep hitting red (losses) too long. YMMV, a lot.....

[Mulligan]

Quote:

Originally Posted by Car-Guy You may be right. Today is looking like it could be a day to bet on black (oil) and hope it doesn't keep hitting red (losses) too long. YMMV, a lot.....

I was thinking that, but no way am I betting on a "stock" that the underlying asset isn't even related to the price you are buying at. And messing with a K-1 over a 10k bet isnt worth it to me.


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[hesperus]

Quote:

Originally Posted by Mulligan I was thinking that, but no way am I betting on a "stock" that the underlying asset isn't even related to the price you are buying at. And messing with a K-1 over a 10k bet isnt worth it to me. Sent from my iPad using Tapatalk

That's good sense. If you are uncomfortable with the risks of commodities, you should stay away. Always stay within one's limits.

[Car-Guy]

Quote:

Originally Posted by Mulligan I was thinking that, but no way am I betting on a "stock" that the underlying asset isn't even related to the price you are buying at. And messing with a K-1 over a 10k bet isnt worth it to me. Sent from my iPad using Tapatalk

Agree with that. No way I'm buying (or betting) on any stock, that I feel does not have the fundamentals/valuation to back it, even if it is for the short term. The last time I did that was with a company called Enron.

[ESRwannabe]

Looks like MLPL is back... if anyone wants to use 2x leverage on the AMLP index...

MLPL Reborn? - ETRACS 2xMonthly Leveraged Alerian MLP Infrastructure Index ETN Series B (NYSEARCA:MLPQ) | Seeking Alpha

[Mulligan]

Quote:

Originally Posted by hesperus That's good sense. If you are uncomfortable with the risks of commodities, you should stay away. Always stay within one's limits.

I was just dumb enough to think I could actually buy a true oil price equivalent "stock" without a K-1. Apparently doesn't exist. And I dont have an oil storage facility at my house to take physical possession.


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[Mulligan]

Quote:

Originally Posted by Car-Guy Agree with that. No way I'm buying (or betting) on any stock, that I feel does not have the fundamentals/valuation to back it, even if it is for the short term. The last time I did that was with a company called Enron.

And I guess it is good I am not. Vanguard site is down...This is the ultimate crap brokerage. My other brokerage is full of issues I wont sell. I swear if I wasn't so lazy and didn't want to mess with it I would close it down.


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[ESRwannabe]

Mulligan, I use vanguard too for brokerage. I agree they have issues. I use them only because my Roth IRA is there and I like to consolidate accounts.


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[target2019]

There have been some major Internet outages on East coast today. May have affected the processing of transactions.

[Mulligan]

Quote:

Originally Posted by ESRwannabe Mulligan, I use vanguard too for brokerage. I agree they have issues. I use them only because my Roth IRA is there and I like to consolidate accounts. Sent from my iPhone using Early Retirement Forum

They have benefited way too much from the "Boglehead Way". Certainly nothing wrong with the Boglehead philosophy, but it can be used just as easily at Schwab and Fido, too. Or they could at least issue a disclaimer about their subpar online brokerage services and say "just buy our mutual funds".


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[ESRwannabe]

Who knows if this is true or not but supposedly OPEC is now ready to cooperate with each other and cut back on production slightly. From what I understand they would only need to cut back by 5% for the overproduction to go away and the price to spike up.

Oil futures bounce on report of OPEC cut

Here is another article about someone making a massive bet on the MLP sector today.

http://www.cnbc.com/2016/02/11/trade...y-rebound.html

[Running_Man]

Well at 8 AMLP is certainly not overpriced unless the MLP space is set to disappear, which while unlikely is possible. I would be more willing to buy if oil was at $20.00 but $26 is fairly close. I would also expect 50% dividend cuts but that would still leave 7.5% interest. overall a tepid not a terrible investment here...

[Mulligan]

Quote:

Originally Posted by Running_Man Well at 8 AMLP is certainly not overpriced unless the MLP space is set to disappear, which while unlikely is possible. I would be more willing to buy if oil was at $20.00 but $26 is fairly close. I would also expect 50% dividend cuts but that would still leave 7.5% interest. overall a tepid not a terrible investment here...

You and ESR are tempting me to throw 10 Bones on AMLP, since I couldnt find a true oil fund to bet on...


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[ESRwannabe]

This article has some good data on AMLP.

All Aboard! The Bottom In MLPs Is In | Seeking Alpha

"I looked at the holdings of AMLP to see which underlying companies have increased, maintained, or cut their dividends. As you can see in the table below, 10 of the 22 holdings increased their dividend compared to the fourth quarter of 2015. Those components that increased their dividend account for 52.50% AMLP's of assets. In addition, the only stock not to have declared its first-quarter dividend was Buckeye Partners (NYSE:BPL) -- if they increase their dividend, that will push that 52.50% up to 60.81% of AMLP's assets that have increased their dividend."

P.S. BPL did raise today. That means 60.81% raised, the others have stayed flat. No cuts for Q-1.

[hesperus]

Quote:

Originally Posted by ESRwannabe "I looked at the holdings of AMLP to see which underlying companies have increased, maintained, or cut their dividends. As you can see in the table below, 10 of the 22 holdings increased their dividend compared to the fourth quarter of 2015. Those components that increased their dividend account for 52.50% AMLP's of assets.

I'm also pleased to see that 5 of my 7 individual MLP holdings are on that list and have increased their dividends. Particularly pleased with EPD, my largest single holding at just over 6500 shares.

[dallas27]

Quote:

Originally Posted by ESRwannabe Who knows if this is true or not but supposedly OPEC is now ready to cooperate with each other and cut back on production slightly. From what I understand they would only need to cut back by 5% for the overproduction to go away and the price to spike up. Oil futures bounce on report of OPEC cut Here is another article about someone making a massive bet on the MLP sector today. http://www.cnbc.com/2016/02/11/trade...y-rebound.html

Massive incentive to cheat. Game theory had predicted decades ago that the cartel couldn't last. Game theory ad to be updated :-). But current events are bringing the game into a situation where it may finally be breaking down into a prisoner's dilemma.


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[aja8888]

Quote:

Originally Posted by dallas27 Massive incentive to cheat. Game theory had predicted decades ago that the cartel couldn't last. Game theory ad to be updated :-). But current events are bringing the game into a situation where it may finally be breaking down into a prisoner's dilemma. Sent from my iPhone using Early Retirement Forum

It's at the point in the oil business that all producers need the price to be higher and that may create a self policing atmosphere where cheating on producing quotas may not be desirable for anyone.

[petershk]

Quote:

Originally Posted by aja8888 It's at the point in the oil business that all producers need the price to be higher and that may create a self policing atmosphere where cheating on producing quotas may not be desirable for anyone.

Yes
But it's perfectly possible to cut a pizza into enough slices that everyone starves .

I think the airline industry as a whole since inception is value destructive (I.e. all money invested by all airlines has returned below 0%).

I think auto is like that too.

I don't think oil is and I don't think it will be mostly because it's used up faster than it can be made. But until many companies go under I think we'll see a lot of up and down.

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