Investing 102

[GregWeld]

This is a name that has been discussed many times - as usual used as an EXAMPLE - which is not or ever intended to be a recommendation to buy or sell... because that's not what this thread is about. It has been discussed because it's a MASTER LIMITED PARTNERSHIP - which is different and taxed differently that a normal stock.


In full disclosure I own 22,000 shares of it.


Barron's came out with a negative article about it this week. And the shares are getting hammered. I'm writing about this because SOMETIMES this is what happens to a name you might own. What to do about it is what you need to think about it.


Some times it creates a wonderful opportunity to buy... either average down or just add to a position. Think about NETFLIX when the CEO came out with a big public gaffe and the stock absolutely plummeted. That was a HUGE opportunity to step in -- and if you did - you've gotten a 4 bagger (400%)...

Some times the negativity might have a real basis - and might very well be just the prick of a pin in a balloon.... and that's when you WOULD NOT want to try to catch a falling knife! I've tried to catch a falling knife... it doesn't buff out.

What you should do before taking any action - buying more or selling - is to try to dig deeper and read as much as you can PRO and CON.... and then maybe choose to do NOTHING... or choose to take your loss and sell... or back the truck up and buy.


Here is how Richard Kinder (CEO and Founder) responds to the article...



" Like now, back in 2006, we had an enormous backlog of projects. And like now, many experts will find that we were too big to be able to continue to grow at an acceptable rate. We proved the doubters wrong the first time around, and I anticipate the same result this time. Reflecting this belief in the Kinder Morgan companies, as many of you know, I’ve been a buyer of KMI shares. I’ve purchased over 800,000 shares in December alone. So I guess my message to those who saw the story less positively was you sell, I’ll buy, and we see who comes out the best in the long run."
-- Richard Kinder, CEO on the Jan 15, 2014 Q413 conference call

On Feb 20, Kinder revealed that he bought 100,000 more shares at a cost of around $3.3 million.