Investing 102

[bdahlg68]

One stock I'd like to add for discussion is MV Oil Trust (MVO) [especially for those investing via 401k/IRA/SEP/ROTH]. High yield (via profit distribution and NOT dividend) at 8.79%, and a decent looking chart (only 5 years though). Distribution is back on the rise since the 2008/2009 drop. 5 year total return is 179.29% (at least according to ycharts.com). I like it and I'm considering getting in on this dip.

[Bucketlist2012]

Originally Posted by bdahlg68

One stock I'd like to add for discussion is MV Oil Trust (MVO) [especially for those investing via 401k/IRA/SEP/ROTH]. High yield (via profit distribution and NOT dividend) at 8.79%, and a decent looking chart (only 5 years though). Distribution is back on the rise since the 2008/2009 drop. 5 year total return is 179.29% (at least according to ycharts.com). I like it and I'm considering getting in on this dip.

Yes, ask Greg about Oil Royalty Trusts.. BPT, and PBT, have been some of my holdings.. Most of mine are dividend paying assets..BPT is an 8 % dividend with a 50% plus rise in 3 and 5 year chart. The total return was 107% to 167%.
3, and 5 year PBT is a 6 % dividend, with a 30 % and 45% rise in 3 and 5 year charts.

I am just asking.



although the gains are stellar, i am looking at the dividends...well both, but i am after income stream.

[Woody]

Originally Posted by solarguy09

Yes, ask Greg about Oil Royalty Trusts.. BPT, and PBT, have been some of my holdings.. Most of mine are dividend paying assets..BPT is an 8 % dividend with a 50% plus rise in 3 and 5 year chart. The total return was 107% to 167%.
3, and 5 year PBT is a 6 % dividend, with a 30 % and 45% rise in 3 and 5 year charts.

I am just asking.



although the gains are stellar, i am looking at the dividends...well both, but i am after income stream.

One of the things that would concern me is that the performance is obviously tied to the price of crude oil. Take a look at a crude oil chart.


http://futures.tradingcharts.com/chart/CO/M

The charts of BPT and PBT are highly correlated. If you look at the dividends, during the declines in crude oil prices you will see the dividends declining as fast as the price of crude. While they currently pay a high dividend, I would not expect that to continue if the price of crude declined.

These look much riskier to me than most of the other stocks we have been discussing.

[Bucketlist2012]

Originally Posted by Woody

One of the things that would concern me is that the performance is obviously tied to the price of crude oil. Take a look at a crude oil chart.


http://futures.tradingcharts.com/chart/CO/M

The charts of BPT and PBT are highly correlated. If you look at the dividends, during the declines in crude oil prices you will see the dividends declining as fast as the price of crude. While they currently pay a high dividend, I would not expect that to continue if the price of crude declined.

These look much riskier to me than most of the other stocks we have been discussing.

Good point..that is why I have been more of a listener than a poster..

I do not want to cloud the Investing 102 thread at all..Thanks for your input..

[bdahlg68]

MVO correlates to oil just like those two stocks and the Dow. Obviously lots of other factors affect share price, not just oil price. MVO has done pretty well considering. Connection to a certain commodity or region or ... is something really to be considered before investing in a stock. Just make sure you consider more than one outside influence on stock price!

[Woody]

Originally Posted by bdahlg68

MVO correlates to oil just like those two stocks and the Dow. Obviously lots of other factors affect share price, not just oil price. MVO has done pretty well considering. Connection to a certain commodity or region or ... is something really to be considered before investing in a stock. Just make sure you consider more than one outside influence on stock price!

Agreed. In fact these stocks seem to have more risk than just being tied to the price of oil.

I would just hate to see someone think they are getting a safe dividend payer and put a significant portion of your portfolio into those stocks. I think they could be a small percentage of one's portfolio to help boost your overall returns, though.

Also, I am by no means an expert, so I am just throwing my two cents in for what it may be worth.

[Bucketlist2012]

Originally Posted by Woody

Agreed. In fact these stocks seem to have more risk than just being tied to the price of oil.

I would just hate to see someone think they are getting a safe dividend payer and put a significant portion of your portfolio into those stocks. I think they could be a small percentage of one's portfolio to help boost your overall returns, though.

Also, I am by no means an expert, so I am just throwing my two cents in for what it may be worth.

Good call. In reality, it is a small portion of my portfolio. i will have to be more clear when i mention things..

Just like I won't talk about other investments I am doing...not really the nuts and bolts of Investing 102..

[GregWeld]

Originally Posted by solarguy09

Yes, ask Greg about Oil Royalty Trusts.. BPT, and PBT, have been some of my holdings.. Most of mine are dividend paying assets..BPT is an 8 % dividend with a 50% plus rise in 3 and 5 year chart. The total return was 107% to 167%.
3, and 5 year PBT is a 6 % dividend, with a 30 % and 45% rise in 3 and 5 year charts.

Man ---- You guys are some serious INVESTORS!!


Okay --- Oil Royalty Trusts -- of which there are many -- and really "land leases" -- where the trust owns the mineral rights -- and they generate cash and spin that off to the "investors" in the trust. They are GIANT CASH COWS when oil prices are high!!

Now here's the tricky part. Nobody really knows how much oil is there - and how long it will be flowing - and at what rate - and at what cost to lift - and what the market price will be.

BPT is an OLDER trust - pumping some 20 years.... So ask yourself -- do they have 100 years of oil left? Do they run dry next week? RISKY -- you bet. Remember what you get with RISK?? Higher "rewards" thus the high dividend - because all the stars are aligned! I own a similar trust -- Chesapeake Granite Wash Trust (CHKR)....

Like all of these things we discuss --- Each person needs to do their research --- and understand all of what they're getting into. Asking here for input is okay --- and should be done -- but remember! They're just OPINIONS... and what is appropriate for me to invest in - may not be suitable for someone with 10,000 or (name an amount). These things all depend on age - $$ - use... and blah blah blah.

[Bucketlist2012]

Originally Posted by GregWeld

Man ---- You guys are some serious INVESTORS!!


Okay --- Oil Royalty Trusts -- of which there are many -- and really "land leases" -- where the trust owns the mineral rights -- and they generate cash and spin that off to the "investors" in the trust. They are GIANT CASH COWS when oil prices are high!!

Now here's the tricky part. Nobody really knows how much oil is there - and how long it will be flowing - and at what rate - and at what cost to lift - and what the market price will be.

BPT is an OLDER trust - pumping some 20 years.... So ask yourself -- do they have 100 years of oil left? Do they run dry next week? RISKY -- you bet. Remember what you get with RISK?? Higher "rewards" thus the high dividend - because all the stars are aligned! I own a similar trust -- Chesapeake Granite Wash Trust (CHKR)....

Like all of these things we discuss --- Each person needs to do their research --- and understand all of what they're getting into. Asking here for input is okay --- and should be done -- but remember! They're just OPINIONS... and what is appropriate for me to invest in - may not be suitable for someone with 10,000 or (name an amount). These things all depend on age - $$ - use... and blah blah blah.

Greg,Thanks.

Oh ya, I am as serious as can be when it comes to Investing. That is what I live on.

And I just have a passion for it...Did I mention that I made my new KDW's as sticky as can be today ?

One quick thing.. I am starting a shift from being the lender, bonds/fixed income, and going to being the owner,stocks, not by much, but I see a shift and do I want to be the lender, that they promise to pay me back, aka europe, ect.., or do iIwant to own more, and be an owner/dividends ??? I think the owner... I feel that the promise to pay me back is getting thin all over the world...

People think fixed income and bonds are safe...hmmmm.....maybe they are not..

And again, I am riskier in PM's, and Oil, so although I share with you, I don't recommend it to the masses. I do it with my money.

But thanks for the kudo's...I will be trying to research and step up my Game with my posts..

Took me a long time to start chiming in..

Last thing..I don't really look at my total balance..it may go up and down due to some of my plays..

I am concerned with income stream, and the dividends..A certain asset i own may go down in balance, but it pays 6 to 14%. depending on the asset, but the point i guess, is that the dividend gets paid, and the income stream is there..

Also I am spread out , and some of these plays are very small in the mix..

I do believe that we are going to be spending in 2012..NO president ever gets re elected in a complete meltdown, and and we will be falsely propped up with government spending, because re election at all costs..and the dollar will continue to suffer..But that is only my opinion...

And my 2012 strategy...kinda the same as 2011, but with the bonds to stock shift of maybe 15 to 20 percent of the total blend...

[GregWeld]

Originally Posted by solarguy09

Last thing..I don't really look at my total balance..it may go up and down due to some of my plays..

I am concerned with income stream, and the dividends..A certain asset i own may go down in balance, but it pays 6 to 14%. depending on the asset, but the point i guess, is that the dividend gets paid, and the income stream is there..

Also I am spread out , and some of these plays are very small in the mix..

See --- that's where you and I are exactly the same kind of investor I look at the investment -- it goes up - it goes down... but what I look at is the dividend stream. If you invest $200,000 and it's paying you 5% per year in dividends - it's spinning off $10,000 a year in income... do I care if it's "down" $5,000 or even $20,000 temporarily? NOPE.... Own it over a 3 or 5 year period -- it's going to be UP and it will be kicking out that cash!

What I'm trying to get others to think about is that cash that you and I live on NOW -- is the same cash that will BUILD UP and buy more shares and snowball for everyone else. Either way - it's a win win.