November 6, 2017
THANK YOU TO OUR READERS: COMPLETING OUR 5TH YEAR!!
We hold AMLP in the Core Portfolio. It has been a loser, down 15% since our purchase. But we are getting over 8% in yield so we have held on hoping for better days.
Well as it turns out we noticed yesterday that the leading financial writer on SeekingAlpha.com is writing a very positive article….some copy is pasted below as well as a link to the article.
If you are a technician and follow the charts, AMLP is still not a buy. BUT If you believe the author is correct and you are willing to take a little risk, you could buy a small position now, or wait for some indication that AMLP is heading higher.
If you own it, just HOLD on.
Based on improving fundamentals both at the macro and micro levels, we believe MLPs have rarely been more attractive as an investment. A shift in sentiment should happen anytime and will drive positive fund inflows into this sector as valuations remain deeply discounted versus historical levels. MLPs continue to place multi-billion dollar projects into service, enhancing their cash flow and growth prospects. They are also set to be among the biggest beneficiaries from the recent increase oil & gas production volumes in the United States. Increasing utilization of existing assets will drive earnings and distribution growth with minimal investment needed. Midstream management teams learned valuable lessons throughout the downturn in the years 2014 and 2015, which has led to stronger balance sheets and a much more solid sector overall. Within the sector, many stocks and securities currently offer investors yields well above 10% and the opportunity to lock these yields at very attractive valuations.
(NOTE: A reminder that a single position should NOT represent more than 4% of your portfolio: it will help minimize your losses like we have with the decline in AMLP)
NEW TAX BILL A FARCE
While the original House budget balanced on paper and offered some real savings, the Senate’s version accepted today by the House fails to reach balance, enacts a pathetic $1 billion in spending cuts out of a possible $47 trillion, and allows for $1.5 trillion to be added to the national debt.
Make no mistake – this is a defining moment for the Republican party. After years of passing balanced budgets and calling for fiscal responsibility, the GOP is now on-the-record as supporting trillions in new debt for the sake of tax cuts over tax reform and failing to act on the pressing need to reform our largest entitlement programs.”
One of the central tenants of our investing strategy has been, and will continue to be, cautioning people to take what they hear/read in the financial news media with a grain of salt. We have likened CNBC to financial pornography as the cable news operators struggle with relevancy. Financial news hasn’t been immune to that trend. In addition, the addition of Fox News Business added another competitor to CNBC and Bloomberg taking away a subset of eyeballs in a rather small total population of watchers of market news. The need for attention-grabbing headlines in a world of cable-cutting and more competition is more important than ever.