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What the Readers Have to Say

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Going through our reader correspondence we find lots of opinions of the direction of oil prices and MLP price levels.  

Robert B. originally wrote to opine (paraphrased) that he thought prices of MLP’s we going to the 2010 levels as the crude oil pricing was similar to current crude prices.  He amended that opinion a bit when he wrote that he felt fixed costs were higher now than in 2010–thus in the end maybe the correct pricing levels for MLP’s is below the 2010 level.

We had another reader write that they were totally over exposed to MLP’s and the ‘pain’ was incredible.  Reader asks ‘what should I do”?  As always we can’t answer that question as we have no idea of the age or circumstances of the reader.  If it were me and I was in that situation I would weed out anything related to low junk rated companies–this might include many of the upstream companies (although you need to go through the balance sheet to find out the specifics of debt etc).  We would NOT hold real crappy companies for the long term (although we own 1 real junky energy company–but it only 1% of our assets).  You have to get your accounts balanced–overloading accounts in specific sectors is a recipe for disaster—everybody is a hero when rising water lifts all boats–but when the tide goes out we find out find out who is wearing no swim suit.  But most of all one has to accept the situation and LEARN–don’t do it again.  We are still working on this LEARNING process after 42 years of investing.

Others have written to tell us the bargains they are picking up.  In our opinion one should not be quick to pick up bargains in the energy sector–this situation needs to shake out a bit before decisions are made–or at the very least one has to ‘dollar cost average’ into their bargains.

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