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January 4, 2013
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MLPs took off like they were shot out of a cannon this week. We’ll see how long it takes for gravity to take effect. Perhaps gravity will take the form of a fresh slew of equity offerings in the coming weeks, or the next DC crisis which we forestalled for at least a month or two this week. But for now, its all good.
MLPs were up each of the 4 trading days, and week over week the MLP Index was up a staggering 7.0%, the best week over week change since March 2009 when the index was up 10.3%. There was clearly some money on the sidelines waiting for the fiscal cliff deadline to pass, or just waiting for the first of the year to allocate capital to the MLP space. The pop has pushed MLPs out to an early lead on the S&P 500.
This week was so epic, I came up with two analogies for this week’s action (the first being the cannon thingy above). I mentioned this on Twitter, but this week reminded me of the 90s movie PCU. The premise of that movie was that in order to save their on-campus housing, a group of campus outcasts had to bring together all the random politically correct groups (hippies, african americans, feminists, etc.) for an all campus party. Its a fun movie if you’ve never seen it. But this week’s market action was akin to an all campus party after the fiscal cliff. Stocks of all types, all the MLPs, everything was up. The last few years of roller coaster price action has trained us to prepare for a hangover after such parties, but MLPs are well positioned after their “down” year to sustain some out-performance this year.
Winners & Winners
Not one single MLP had a negative week this week. I can’t remember the last time that happened. Very rare. The high beta, low liquidity names led the pack, with AMID popping 18.5% to lead everyone.
I Realize You Have a Choice When it Comes to MLP Content…
Because the content on this site is free, I have no real obligation to continue to produce content here, but the rewards for doing so continue to be incredible. I’ve met (or virtually met) many new and interesting people, gained some new clients, gained plenty of publicity/credibility, and attracted speaking engagements all from this blog. I even got my job from a reader. Since I launched the site in 2009, there has been an explosion of MLP articles in mainstream publications, on Seeking Alpha, Motley Fool and other random blogs like mine. Through all that noise, you all have continued to read this site and tell friends about it,which is much appreciated. Having said all that, my posts these next few months will likely be fewer and with less words than usual. At my day job (at Guzman & Company), we’ve got some very exciting plans for MLP equity research that I will share in more detail here by the end of the month. But for the next 30 days or so, I will be exhausting most of my content producing efforts in the execution of those plans. I hope you understand.
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