Investing 102

[CamaroMike]

Im late to the party, but yes there was a big hike in KMP. Im still holding though!

[GregWeld]

Okay --- We'll use this Kinder Morgan Partners (KMP) as a good example today of how I work.

I owned 11,000 shares at a cost of $81.43 a share = $895,730

These shares paid me $15,290 per quarter. The dividend is already "X" for the period - so on August 14th I'll be paid.

I sold this morning - the entire lot - for $1,120,290 netting a nice $224,560K

Add in the dividend capture and it's $240,000 this quarter.


My point in all this is --- whenever I have an unexpected windfall like this -- I'm going to take that gain. I'll buy the new entity when and if it's approved and takes place if the new dividend meets my needs --- or I can buy something else. Nobody ever went broke taking a profit.

OKay -- but for "102" -- you guys should be longer term thinkers and your profits (actual real dollars) are probably not quite as large as mine. Nearly a quarter million dollars is real money. Not that $2500 isn't -- but I'm saying that you have to balance the gain against your total - and whether or not this is a taxable event for you (long or short term hold). And then make a judgement call. For me -- that gain pays for the Pinkee's build... so I'll take it and say thank you very much. If it was in a 401K or IRA or ROTH -- and was only a $200 or $1000 gain - I'd probably let it ride and pick up the dividend - and the cash that's going to get paid and the shares in the new entity. I still LOVE this company so will bet with them again.

[SSLance]

Nice 1 day gain there Greg... Hard to say no to that especially when you figure in the toiling for so long in the red...

I bought some KMI a couple of times early on when I got back in and the 9% gain today put me at about 22% gain overall since February. I'm keeping my couple hundred shares in hopes that Richard keeps paying his shareholders back like he has been for years. Nice to see the big green days though, they sure are fun.

[WSSix]

So if this deal is approved, does that mean those of us who owned KMP will be cut a check for $10 per share and have it sent to us? Will it be received simply as a payout like the dividend is/was? I wonder what the tax implications are since KMP was an MLP. Not knowing any better, I'm looking at the shares received in KMI and cash payout as a return for the sale of the business I am a partner in.

[GregWeld]

Originally Posted by WSSix

So if this deal is approved, does that mean those of us who owned KMP will be cut a check for $10 per share and have it sent to us? Will it be received simply as a payout like the dividend is/was? I wonder what the tax implications are since KMP was an MLP. Not knowing any better, I'm looking at the shares received in KMI and cash payout as a return for the sale of the business I am a partner in.

You will receive the appropriate amount of shares in KMI... some 2+ for 1... and yes -- a cash payment deposited to the account holding your shares of $10.77 per share you hold in KMP.

That will be treated as a return of capital - which is how a MLP does things. So it's not a gain and while I'm not an accountant -- I don't think it's taxable.. but it depends on how the paperwork goes for the transaction. If they SELL the shares to KMI it might be taxable --- but I'm thinking they're doing a dissolution of KMP and giving you back your $10 and then swapping the balance for the new KMI.

These things can change - so up until it actually happens -- it's fluid.

[GregWeld]

Originally Posted by SSLance

Nice 1 day gain there Greg... Hard to say no to that especially when you figure in the toiling for so long in the red...

I bought some KMI a couple of times early on when I got back in and the 9% gain today put me at about 22% gain overall since February. I'm keeping my couple hundred shares in hopes that Richard keeps paying his shareholders back like he has been for years. Nice to see the big green days though, they sure are fun.

Every once in awhile even a blind squirrel finds a nut. LOL

I fully intend to re-invest in the new KMI -- at what level remains to be seen but I believe in their business and I like the way ownership has treated the investor... and that goes a long way for me.

[GregWeld]

Originally Posted by GregWeld

Okay --- We'll use this Kinder Morgan Partners (KMP) as a good example today of how I work.

I owned 11,000 shares at a cost of $81.43 a share = $895,730

These shares paid me $15,290 per quarter. The dividend is already "X" for the period - so on August 14th I'll be paid.

I sold this morning - the entire lot - for $1,120,290 netting a nice $224,560K

Add in the dividend capture and it's $240,000 this quarter.


My point in all this is --- whenever I have an unexpected windfall like this -- I'm going to take that gain. I'll buy the new entity when and if it's approved and takes place if the new dividend meets my needs --- or I can buy something else. Nobody ever went broke taking a profit.

OKay -- but for "102" -- you guys should be longer term thinkers and your profits (actual real dollars) are probably not quite as large as mine. Nearly a quarter million dollars is real money. Not that $2500 isn't -- but I'm saying that you have to balance the gain against your total - and whether or not this is a taxable event for you (long or short term hold). And then make a judgement call. For me -- that gain pays for the Pinkee's build... so I'll take it and say thank you very much. If it was in a 401K or IRA or ROTH -- and was only a $200 or $1000 gain - I'd probably let it ride and pick up the dividend - and the cash that's going to get paid and the shares in the new entity. I still LOVE this company so will bet with them again.

I maybe should have explained how I arrived at the sales numbers. I live the market and wake early... and saw the premarket trading activity and put in a sell order... The early bird gets the worm sometimes.... LOL

In other words --- the premarket HIGH this morning was $104 per share.


Pre-Market Volume: Pre-Market High: Pre-Market Low:
1,424,588
(08:17:37 AM)
$ 104

(04:00:00 AM)
$ 84.23

[GregWeld]

For those interested in seeing a HISTORY of a particular stocks dividends -- and or when they pay and go ex etc... this is a freebie NASDAQ site with that info... you just have to put in the symbol or name.


My other link didn't work as modified and posted..... so here's a "starter link" -- this chart is showing Wells Fargo (WFC) so just change the symbol to check the stock of your choice.


http://www.nasdaq.com/symbol/wfc/dividend-history

[GregWeld]

To all of you that bought Kinder Morgan Partners (KMP) --- you've enjoyed an 18% Year to date gain.... and you just got your dividend posted today.... You're welcome! LOL


As posted earlier - I captured my gain in KMP and then started to build a position - 25,000 shares so far - in Kinder Morgan Inc (KMI) the parent company and acquirer of KMP. I already now have a nice gain in it (3% but that's in just a few days).


Here's the point for Investing 102... The market is both kind and an evil douche at any given time. But you'll never reap any of the rewards if you're not "in" it. Being on the sidelines and watching or waiting for just the right moment - will always have you OUT when good things happen. While it's true that being out when bad things happen might save you some sleepless nights... you'll never get ahead that way.

Build your trust over time... average your way in to positions over time - but most importantly - continue to put money to work when it's the darkest days. Know that you're buying the best companies in the world and that eventually they will go your way and you will be rewarded.

[CamaroMike]

Good stuff!