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Strategies & Market Trends : Value Investing

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To: mopgcw who wrote (53609)	3/18/2014 2:53:46 PM
From: Mattyice	of 78702

Geo, Thanks for the words of wisdom sir - think you are beating me to the punch in my own thinking and are on to something and as I have dug deeper I have come away with two things. There is hardly an outfit that I want to own, and the second I am going to put on some shorts in a few names - I don't think y'all like when i discuss those here so i keep them to myself. I have started to take a view that most of these are ticking time bombs built on a toxic relationship. If/when I do want to get involved in a few names it is either after a massive distribution cut and ownership of the reality (thinking BWP here) that they are facing or a prudent company waiting in the wings (which where is that one? - maybe enterprise or kinder? - I'm not so sure its hard to trust stewards of capital when these very structures are set in place to incentive a company to spend so they can in turn redistribute capital to unit holder base who are fixated on growing dividends). Selling your soul to issue a dividend is not something i can get behind nor understand and that is essentially what is happening in most of these situations. Majority of these companies are simply buying high priced assets, issued by debt and equity and will be forced to sell lower priced assets when creditors come calling. Its hard to predict that day, but this is a view I am taking rather quickly. I go in to any investing situation focused on two things: Why are the assets priced at where they are and what are the bias/perception behind the price - I felt like there were many MLPs with steel already in the ground (huge plus) in certain geographical regions with market underestimating the value and significance of this competitive advantage with huge windfalls of a full pipe and possibility of either consolidating or getting acquired (hat tip to EKS for lot of this framework) with much of the focus on distributions and not the actual position and value of the asset. With hindsight i fill like i missed some of the obvious ones such as regency, pvr, copano, etc... And I'm still open to these type of situations. This whole thing has been interesting none the less and i think i am waiting for a dose of reality before i step up and put my money where the mouth is.

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