Hi Brewer
I have read your posts about MLP's. I went back and read the posts on them and also poked around on the web. Following is what I have found, I just want to check with you as to some of the things that I found.
I am just trying to evaluate if MLP's are an asset class I should add to.
1. Most are pipelines, propane and other petroleum products or real estate. They almost seem like commodity plays - the price of gas plays a big role in the payouts. In that case am I getting the same asset class coverage with PCRIX?
2. Payout's are generally in the order of 6%-8%. Has it been at this consistently? What I am thinking about is, did MLP's become popular because everyone is suddenly chasing yield?
3. I understand that MLP's are under researched and pension funds cannot own them - but does also mean that General Partner's have less scrutiny on them? Is it ok that GP's in some cases are big oil companies, is that good or bad - could MLP's be used to hide stuff.
4. As far as the taxes goes - do you in fact file taxes in all the states that the MLP's operates in ie do you file in say NM & TX on top of NJ? I read in fact that in most cases it's ok not to file because states don't mind!!! I don't want to be hauled behind bars in TX - no way!!!
How bad do taxes get with say a couple of MLP's?
5. I am not being negative, just airing questions. I like the fact that there is potential for ineffeciencies in the market and the fact that taxes are complicated might force a few people away! I don't mind doing complicated taxes!
6. Also I looked into ETF's which invest in MLP's - couldn't find an index fund - man that would have been great
The ETF's seem to charge about 1.5-2% as Expenses, high for my taste but then I am paying about 0.74% for PCRIX. Any opinions on ETF's? Also taxes are a piece if cake - its like owning stock.
7. I read that rising interest rates make it tough for the MLP's to raise money, so do they nosedive when interest rates spike up? Also since not much capital investments are possible - most MLP's only seem to do maintainence and are prevented by law from doing any new investements, should appreciation be always accounted for as zero?
Is one getting all the negative of stocks and no postive appreciation?
8. I heard MLP's were popular in late 80's and then they seem to have fallen off the radar screen - any ideas why?
I know I am asking too many questions, maybe I should read more - these were just some things that came to my mind. I won't mind if you just say do more homework!, just say it
thanks
-h
I have read your posts about MLP's. I went back and read the posts on them and also poked around on the web. Following is what I have found, I just want to check with you as to some of the things that I found.
I am just trying to evaluate if MLP's are an asset class I should add to.
1. Most are pipelines, propane and other petroleum products or real estate. They almost seem like commodity plays - the price of gas plays a big role in the payouts. In that case am I getting the same asset class coverage with PCRIX?
2. Payout's are generally in the order of 6%-8%. Has it been at this consistently? What I am thinking about is, did MLP's become popular because everyone is suddenly chasing yield?
3. I understand that MLP's are under researched and pension funds cannot own them - but does also mean that General Partner's have less scrutiny on them? Is it ok that GP's in some cases are big oil companies, is that good or bad - could MLP's be used to hide stuff.
4. As far as the taxes goes - do you in fact file taxes in all the states that the MLP's operates in ie do you file in say NM & TX on top of NJ? I read in fact that in most cases it's ok not to file because states don't mind!!! I don't want to be hauled behind bars in TX - no way!!!
How bad do taxes get with say a couple of MLP's?
5. I am not being negative, just airing questions. I like the fact that there is potential for ineffeciencies in the market and the fact that taxes are complicated might force a few people away! I don't mind doing complicated taxes!
6. Also I looked into ETF's which invest in MLP's - couldn't find an index fund - man that would have been great
The ETF's seem to charge about 1.5-2% as Expenses, high for my taste but then I am paying about 0.74% for PCRIX. Any opinions on ETF's? Also taxes are a piece if cake - its like owning stock.
7. I read that rising interest rates make it tough for the MLP's to raise money, so do they nosedive when interest rates spike up? Also since not much capital investments are possible - most MLP's only seem to do maintainence and are prevented by law from doing any new investements, should appreciation be always accounted for as zero?
Is one getting all the negative of stocks and no postive appreciation?
8. I heard MLP's were popular in late 80's and then they seem to have fallen off the radar screen - any ideas why?
I know I am asking too many questions, maybe I should read more - these were just some things that came to my mind. I won't mind if you just say do more homework!, just say it
thanks
-h