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Originally Posted by PDXFactory
I ended up in KMI as a result of being a KMP share holder...and those of you who are Kinder Morgan holders know what has been going on over the past 8 months or so...a 50%+ drop in share price.
At this point I don't see a lot of reason to pull back at all, and I have been considering adding to my position since the stock is "on sale" these days and it would be nice to average down my price per share. I'm far from an expert though, and I'm curious if those of you with more experience see any reasons to be nervous (like the rest of the market seems to be with KMI!)?
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Quote:
Originally Posted by MPM IV
I'm not the guy with more experience, but I'm curious to hear other's thoughts as well.
Of the seven positions I own two are oil, one being KMI. I started buying before I understood about keeping each position to 5%. I'm pretty far out of balance now which makes me hesitant to add more, but it would be a significant reduction in price.
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In full disclosure, I own 25,000 shares of KMI -- and currently have a sizable paper loss on this holding.... almost a half million dollar "loss" (you don't lose anything until you sell - I'm not selling).
There are "rules" that we've discussed in Investing 102 -- one of which comes to mind - and has been restated many many times i.e., "Don't try to catch a falling knife".
With oil in free fall - we don't know where these oil and oil related shares will go. Currently we're in a market where anything remotely related is "toxic". If you're a holder - this is known as "pain". These are painful holdings right now. This is why we limit holdings to 5%.... so they're only somewhat damaging even if they went to zero... This is why I preach, at the very least - collecting a dividend while you wait for the possibility that the share price recovers.
I intend to buy more KMI to average my cost basis down..... but I'll do that a little bit (chunks) at a time because I fully expect more pain before a gain. The baby is being thrown out with the bathwater right now. I own a company (APU) that distributes LPG.... and it's just getting hammered. Why? No particular reason except that it's oil related.
Think of this like what happened when the mortgage debacle hit the housing market. Good builder or bad - the builders got creamed - lumber suppliers got creamed - bricks got taken to the woodshed - roofing manufactures - plumbing suppliers.... you name it. The guys that made a ton of money on the recovery of the housing market were the guys that bought shares - bought houses - bought apartments - when nobody else wanted 'em.