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Strategies & Market Trends : Value Investing

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To: Madharry who wrote (30379)	3/18/2008 11:37:31 PM
From: Spekulatius	Read Replies (1) of 78652

re MLP and UBTI. my understanding is that you only have a problem when you UBTI in an IRA exceeds 1000$. Most pipeline MLPs luckily produce very little UBTI, in many cases as little as 10% of the distribution. What can throw UBTI off are one of gains (like hedging or sales which are fairly rare. Hedging gains occur with some midstream (like MWE) and really depend on when your purchase your shares. I gleaned the little knowledge I have from Investorvillage "MLPs" board. Lot's of great info about MLP's there. I do not follow E&P MLP's. in my opinion the problem with E&P MLPS is similar than with Canadian trusts - they trade at a premium to taxable corporations in terms of reserve valuation and deal with wasting assets (reserve depletion). A pipeline is not a wasting asset (at least not over foreseeable periods of time). On the right locations they become even more valuable as the owner can branch out the network and achieve incremental cash flow growth with relatively little new investments.

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