SEARCHING FOR OIL INVESTMENTS IN THE BARGAIN BIN. BUY OKE. 5%. BUY PAA. WATCHING EPD TO BUY. ADD TO MEMP

February 23, 2015

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HOORAY!!!!!

Jonathan Gruber, the consultant who said ObamaCare became law due to the “stupidity of the American voter,” was fired from the board of the Massachusetts health exchange on Wednesday.Gov. Charlie Baker (R) asked Gruber, an MIT professor, to resign, along with three other members of the board, according to the governor’s office.

All three complied. WBZ-TV in Boston first reported the news. 

In the fall, Republicans jumped on a series of videos that surfaced of Gruber commenting on ObamaCare, using them to argue the law was passed through deception.

MORE GOOD NEWS

The IRS’s inspector general confirmed Thursday it is conducting a criminal investigation into how Lois G. Lerner’s emails disappeared, saying it took only two weeks for investigators to find hundreds of tapes the agency’s chief had told Congress were irretrievably destroyed.

Investigators have already scoured 744 backup tapes and gleaned 32,774 unique emails, but just two weeks ago they found an additional 424 tapes that could contain even more Lerner emails, Deputy Inspector General Timothy P. Camus told the House Oversight Committee in a rare late-night hearing meant to look into the status of the investigation.

“There is potential criminal activity,” Mr. Camus said.

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(Update:  We are Still watching EPD to buy.  But it is still heading down.  Wait and watch.)

(UPDATE Thursday:  Plains All American  BUY PAA)

Plains All American Pipeline, L.P., together with its subsidiaries, is engaged in transporting, storing, terminalling, and marketing crude oil, natural gas liquids (NGL), natural gas, and refined products in the United States and Canada. The company operates in three segments: Transportation, Facilities, and Supply and Logistics. The Transportation segment transports crude oil and NGL through pipelines, gathering systems, trucks, and barges.

(Update:  Sectors to AVOID due to the potential of rising rates.  If you own these, be sure and place sell limit orders:  preferred stocks, utilities, municipal bond funds and LONG term bond funds.  You should be looking to BUY PAA and EPD we may buy…floating rate bond funds are also ok.)

(Update:  We continue looking for opportunities in the oil patch.  JPMorgan has upgraded MEMP which we hold in the Core Portfolio.  ADD to this position.)

http://seekingalpha.com/article/2949706-memorial-production-partners-2015-should-be-a-strong-year?isDirectRoadblock=false&uprof=46

That said, he sees little chance of a distribution cut for Memorial Production Partners (MEMP) given its strong hedge book and liquidity position, which is a part of his rationale for upgrading the stock from Neutral to Overweight, with an $18 price target:

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A note to my readers:  We like getting ‘comments’ in response to our posts….and we get a LOT.  WordPress the host of this blog sends the majority of the comments to moderation because most of them are in fact spam.  I have been deleting the majority of these comments.  I have even had complaints that readers are not seeing their comments published.  But from now on I am going to selectively publish those comments that appear to be valid.  If you want to promote your website, critique my spelling, or complain about how the site loads, do not send me spam….but if you have valid comments send them in.  Let’s see how it goes.

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While oil is plunging we have been trying to pick up bargains in the oil industry.  The assumption here is that oil has turned around and we want to buy now assuming that prices will trend up.

Last week we started watching EPD.  I expected EPD to trend down and we could buy at lower prices.  Well of course it did exactly the opposite and started to trend UP!!  Since the long term momentum is DOWN I am going to wait and watch.  If we get EPD at lower prices great.  If not we can move on to other possibilities….such as OKE Oneok Inc.  Pasted below is a general description from http://www.Fidelity.com:

ONEOK, Inc. operates as a diversified energy company in the United States. The company gathers, processes, stores, and transports natural gas; gathers, treats, fractionates, stores, and transports natural gas liquids (NGL); and owns and operates interstate and intrastate regulated natural gas transmission pipelines and natural gas storage facilities, as well as stores and distributes NGL products to petrochemical manufacturers, heating fuel users, ethanol producers, and refineries and propane distributors. It also owns and operates a parking garage; and leases excess office space to others in downtown Tulsa, Oklahoma. ONEOK, Inc. operates as the general partner of ONEOK Partners, L.P. The company was founded in 1906 and is headquartered in Tulsa, Oklahoma.

NOTE that OKE is a general partner, a term that most investors are not familiar with.  Below is more pasted copy that talks about general partners:  from http://www.dividenddetective.com.  OKE reached at high of $70 and is now down at $47….it should start trending up.  I suggest you buy a small position in OKE.

However, there’s a better way to invest in natural gas pipelines. As the name implies, MLPs are partnerships, not corporations. Typically, a general partner (GP) runs the business, and individual shareholders (technically unit holders) are limited partners.

Here’s why you should consider buying the GPs instead of their MLPs. The general partner usually takes a percentage off the top of its MLP’s cash flow, and then distributes the balance to the limited partners. The GP’s percentage typically increases as the MLP’s cash flow grows. For instance, the GP’s cut might start at 2%, but then eventually ramp up to 50%.

Here’s how that math works. Say that three years ago, an MLP generated cash flow of $200 million and its GP took 10%. So, the GP collected $20 million, and the limited partners received $180 million. Now, assume that this year the MLP generates $400 million from its pipeline business, but now the GP takes 25%. In this case, the GP takes $100 million leaving $300 million for the limited partners. Thus, over the three years, the GP’s take grew fivefold (400%) compared to 67% for the limited partners.

GPs pay lower dividend yields (2% to 4%) than their MLPs. However, your total return is dividends plus share price appreciation, and GP’s faster dividend growth translates to faster share price growth.

Stick With Corporations
General partners may be organized as corporations or as MLPs themselves. I recommend sticking with corporate GPs. Corporations require simpler tax returns than MLPs and their dividends are subject to a maximum 15%/20% federal tax rate.

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This corrupt administration keeps telling us how great the economy is.  BUT now we hear that the Fed is very hesitant to raise rates.  IF the economy is so hot and good they should be raising rates…..but now they hesitate.  Strange isn’t it.

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They didn’t mention this on the Oscars……………………!!!!!

Last year alone, Covenant Eyes, an Internet research firm, reported that the Adult Film industry (PORN) created 13,000 videos that brought in over $13 billion in revenue. Compare that to the 504 movies and $8 billion that Hollywood made in that same period. That’s easy to quantify.

MOVIES  50 Shades of Grey.  Wow the critics are killing this thing.  But we found it very very interesting.  Definitely recommended.  I just read that the male star is NOT returning in the sequels because his wife objects.  (The sex scenes are very tame.)

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