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AMLP. ILLINOIS GOES DOWN.

June 22, 2017

As residents of Illinois, we have known for many, many years that Illinois was eventually going to head into bankruptcy.  With the rampant corruption and Democratic control in Springfield there was no other outcome.  The ‘spend money’ mentality is so ingrained that a bomb could not stop it.

We have told you numerous times to check with any bond funds that you own and sell them if they hold Illinois bonds.

Of course the voting residents of Illinois are really to blame.  This herd of sheep have continued to vote in the liberals as they did not want to give up all the freebies and benefits and pensions that they are getting.  The politicians will want to raise taxes and if the people do not riot in the streets, they are responsible for their own misfortune.

The time has come to pay the piper.  What a travesty.  Keep in mind there are several other states in line to fail and you should pay attention if you are residents.

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We are getting hit in our AMLP position:  down 13%.  If we had been paying attention we would have sold back in March but we screwed up.

http://www.dividendyieldhunter.com, one of our favorite sites, has a unique perspective on AMLP.  They are buying.  We don’t agree as the technicals are still declining.  But you may want to look at it:

If you are like me you are watching the massive drubbings that shares in energy companies have been taking over the course of the last month as the price of a barrel of oil has fallen by about $10/barrel.  As you are watching the drubbing you are saying to yourself “which of these companies is a real bargain?”  There are 21 oil and gas related master limited partnerships (MLPs) with current yields over 10%–are there some bargains in these 21?  We are guessing there are, the question is which one is a bargain?  We all know that the midstream energy companies have continued to get beat down even though most of the services they provide are on a fee basis and finances are not affected dramatically with short term movements in the price of oil and natural gas.

Does this mean there are bargains available? Well we are sure there are bargains but we have been less than successful  when picking energy MLPs so we have decided we will take a position in the Alerian MLP ETF (NTSE:AMLP).  Being a ETF we avoid the leverage that is inherent in a closed end fund (CEF) which means movements in share price are not as violent as a similar CEF.  Of course the trade off is that if energy heads higher the lift to this ETF will not benefit as much as a similar CEF–given our conservative nature we are just fine not squeezing every possible penny out of a position.

AMLP is an ETF that invests in energy infrastructure meaning that it is invested in midstream MLPs.  The list of the holdings can be found at this link.  Currently AMLP is paying a quarterly dividend .215/share which equates to a current yield of 7.8%.  We will be taking a small position to start with buying 400 shares tomorrow at around $11.08/share.  Then we will watch and wait–if better pricing arises we will consider doubling our position.

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Must read article on Democrats poll rigging:

http://www.zerohedge.com/news/2017-06-21/democrats-stop-poll-riggingits-getting-embarrassing-and-clearly-not-helping-you

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