Royalty Trust Stocks..?

[bode316]

Hello,

I am looking to invest about 10k in a few stocks. I like dividend stocks like I have stated before.

A friend of mine mention Permian Basin Realty Trust, so I took a look, it looks very appealing. So I started searching more stocks, Hugoton Royalty Trust, Mesa Royalty, and so on. There are many to choose from.

I just want to get some "expert opinions". I am young, and like to buy for the long run. What do you all think?

 

[kumquat]

I think you should do your own research rather than accept advice from anonymous "experts" on the Internet.

 

[bode316]

Kumquat the grouch, let me guess... old, bored, and cranky?... I do plenty of research.. it never hurts to get other opinions. I guess you know it all, and dont like to hear other peoples takes on stocks.. No reason to be rude.

 

[Hamster]

I think you should do your own research rather than accept advice from anonymous "experts" on the Internet.

Did seem a bit rude. Isn't the purpose of this web site for people to share information?

 

[haha]

I have owned oil and gas royalty trusts from time to time since the 80s. I don't own any now.

The first thing to realize is that these are wasting assets, the second thing is that you cannot know how rapidly they are depleting.

You do have the O&G engineering firms' estimate of reserves, but some are very conservative, always sitting at about 8 years of life remaining, and others less so.

In particular, PBT and SJT were my first holdings, shortly after they were spunoff from Southland Royalty. They created a gusher of payouts while I owned them, and almost 30 years later they are still gushing.

But it can't last forever, as they are not allowed to explore new acreage. The gussing game is about when is the jig up, and when do you still have plenty time.

You should also know that the market value of these things is sensitive to interest rates as well as production and prices.

Ha

 

[jimnjana]

Hello,

I am looking to invest about 10k in a few stocks. I like dividend stocks like I have stated before.

A friend of mine mention Permian Basin Realty Trust, so I took a look, it looks very appealing. So I started searching more stocks, Hugoton Royalty Trust, Mesa Royalty, and so on. There are many to choose from.

I just want to get some "expert opinions". I am young, and like to buy for the long run. What do you all think?

If I were you, i would skip the royalty trusts at this stage in your life. They generally are fine for current income, not so good for capital appreciation. I would suggest you look at MLPs instead. Royalty trusts generally only "milk" the resources that were placed into the trust. Unless they have a parent company feeding resources into the trust, it will eventually go into decline and eventually be liquidated with unit owners receiving a portion of the proceeds. MLPs pay the current income and at least can grow the partnership.

 

[haha]

Unless they have a parent company feeding resources into the trust, it will eventually go into decline and eventually be liquidated with unit owners receiving a portion of the proceeds.

Royalty trusts by definition have no parent company, so it is not possible for a parent company to feed resources into the trust.
What you are describing is "dropdowns", as done usually by the GP interest into MLPs.

Ha

 

[jimnjana]

Royalty trusts by definition have no parent company, so it is not possible for a parent company to feed resources into the trust.
What you are describing is "dropdowns", as done usually by the GP interest into MLPs.

Ha

thanks ha, my bad, I was thinking of SD, which just spun off SDT. They are not a parent company, bad choice of word on my part. But now they own a percentage of SDT. I guess when they spin off more producing wells into the next trust entity it will be SDT2 and so on.

 

[kumquat]

Kumquat the grouch, let me guess... old, bored, and cranky?... I do plenty of research.. it never hurts to get other opinions. I guess you know it all, and dont like to hear other peoples takes on stocks.. No reason to be rude.

Not rude at all. If you have questions, ask them. If you have opinions, state them, and your reasons for holding those opinions. Why would you go to an anonymous site for "expert opinions"? No one cares more about your money than you do.

And yes, I do my own research because I am responsible for the results. If I posted that I found it appealing would that make you go buy it? Wouldn't you want to know why I thought that?

Read your initial post again and see if it makes you think that "luncheon meat" is coming.

Did seem a bit rude. Isn't the purpose of this web site for people to share information?

Interesting first post. I'll look forward to more.

 

[brewer12345]

Even better than royalty trusts are Venezuelan beaver ceese futures. You have the most upside if you leverage your position in this market.

 

[haha]

Even better than royalty trusts are Venezuelan beaver ceese futures. You have the most upside if you leverage your position in this market.

Beaver cheese has unfortunate associations with yeast infections. Please, let's put this one away!

Ha

 

[REWahoo]

To everyone else, thanks for responding, I'm leaning towards mlp's or possibly sitting on some cash for a while.

May I suggest spending a few of those bucks on a self-help book?

 

[Nords]

I am looking to invest about 10k in a few stocks. I like dividend stocks like I have stated before.
A friend of mine mention Permian Basin Realty Trust, so I took a look, it looks very appealing. So I started searching more stocks, Hugoton Royalty Trust, Mesa Royalty, and so on. There are many to choose from.
I just want to get some "expert opinions". I am young, and like to buy for the long run. What do you all think?

I think you should do your own research rather than accept advice from anonymous "experts" on the Internet.

Kumquat the grouch, let me guess... old, bored, and cranky?... I do plenty of research.. it never hurts to get other opinions. I guess you know it all, and dont like to hear other peoples takes on stocks.. No reason to be rude.

Did seem a bit rude. Isn't the purpose of this web site for people to share information?

OK, we're all off to a good start here.

Bode, you're relatively new here. Unlike Kumquat, you haven't watched hundreds of newbie investors ask questions here very similar to yours. Over and over and over again. Then they get huffy when someone suggests that they do a little of their own planning & research. Posts like yours indicate someone who (1) has not developed an asset-allocation plan, (2) is going by a "friend's recommendation" and anonymous Internet strangers instead of doing their own research, and (3) seems pretty thin-skinned for just one response.

Here's my suggestion: First, if you're truly a long-term investor, then share your asset-allocation plan and how you arrived at it. This would presume you've developed an AA plan, so if you don't have one then go develop it.

Second, go research some of your trusts and explain why you think they're appealing. Not just "great upside potential!!" but rather an analysis of their dividend history, their payout rates, selling below book value, or whatever fundamentals are important to you. This blogger cranks out a dozen a week, so perhaps you could do one or two. Then, as Hamster points out, you'd be sharing info. Your analysis could give other posters here a clearer indication of what you're seeking and lead to other ideas.

That's my expert opinion. Let's see what you choose to do with it.

 

[brewer12345]

Beaver cheese has unfortunate associations with yeast infections. Please, let's put this one away!

Ha

What, and deny the prominence of this unique Venezuelan export on the world market?

They have to grow some really big beavers down there to export all that cheese.

 

[bode316]

OK, we're all off to a good start here.

Bode, you're relatively new here. Unlike Kumquat, you haven't watched hundreds of newbie investors ask questions here very similar to yours.

I have been here over 5 years, I guess I am new.. Hes been around alot longer, 6 years!

Didnt mean to cause an uproar, just asked a simple question.

 

[haha]

Didnt mean to cause an uproar, just asked a simple question.

Ya see, that is where you went wrong...

 

[bode316]

Ya see, that is where you went wrong...

No more questions from me! Wouldnt want to upset Kumquat, he has been around alot longer than me! (1 year)

 

[Sarah in SC]

HaHa, you gotta admit, the Beaver cheese would be a great investment....

 

[bode316]

HaHa, you gotta admit, the Beaver cheese would be a great investment....

Beaver cheese would be a great investment.. But like the almighty has said, don't ask for advice and do your own research! Don't rely on help or opinions!! Haha

 

[brewer12345]

Beaver cheese would be a great investment.. But like the almighty has said, don't ask for advice and do your own research! Don't rely on help or opinions!! Haha

Let us know when you have hired a tractor to drag that telephone pole out of your @ss.

For the record, I would not be eager to chase royalty trusts. These things are capital arbitrage vehicles used by oil and gascompanies to raise the cheapest capital they can get (the people who run SD are no fools). As such, you only want to be buying when the market runs away from them. If you really want an energy investment, look for an exploration and production company that is capable of growing reserves and production at a fast pace. I like and own CHK, but I would also point you to EOG, UPL, RRC, DVN and SD.

 

[bode316]

Let us know when you have hired a tractor to drag that telephone pole out of your @ss.

For the record, I would not be eager to chase royalty trusts. These things are capital arbitrage vehicles used by oil and gascompanies to raise the cheapest capital they can get (the people who run SD are no fools). As such, you only want to be buying when the market runs away from them. If you really want an energy investment, look for an exploration and production company that is capable of growing reserves and production at a fast pace. I like and own CHK, but I would also point you to EOG, UPL, RRC, DVN and SD.

You're a mean one.. mr. Grinch!

 

[brewer12345]

You're a mean one.. mr. Grinch!

I see that even after I answered your question you retain your "charm."

Have a nice life.

 

[bode316]

Yeah... Tractor... That was nice of ya!

 

[kumquat]

I guess you know it all, and dont like to hear other peoples takes on stocks..

After 7 posts in a thread you started, we still haven't heard your "take" on Permian Basin Realty Trust in particular and royalty trusts in general (sorry, "very appealing" doesn't cut it). We have heard you dis a few long term posters though. Perhaps it's time to make a contribution. I'd suggest you re-read post 13, it's a very good guide to life here.

 

[Bestwifeever]

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