It would be remiss of me to fail mentioning today's news of a severe distribution cut in SDLP. Many investors assume that everything will be just fine once we're merely days away from a pick's going ex-distribution. The SDLP news comes to us just a week prior to the company's going ex-D. Thus, the fact that we're mere days from a juicy distribution is not any sort of guarantee whatsoever and it's important that we investors remember this fact well. When it comes to making a profit in the stock market, it is extremely unwise to count on anything but our own personal shortcomings.
Now, then--- last month I sold my JPEP position. I'd built up a gain but sensed the company would be forced to cut back on its distribution program. That, of itself, was not a primary reason I sold. Rather, it was about the drop in valuation I awaited, should there be a severe cut in the distribution forthcoming. Sector performance indicated there was/is no way the company can sustain its distribution policy without implementing a cutback. To date, nothing has occurred publicly that would corroborate my earlier position.
I may have been wrong on my call. Still, we don't know yet. But we're witnessing even some of the largest sector operators in the business resorting to mothballing some of their leading projects despite having to cough up money to compensate suppliers, eating crow, as it were, due to contango.
So I'm ok with being out of JPEP for now. I will not be out forever and will report back here as I make changes myself or see cause for glee or concern.
Need I say this, however?--- My gains were marginal. If yours are substantial, please consider taking those gains off the table before marrying what may well turn into a mistake worthy of divorce. SDLP is now down 27%. That's a hellova hit, imo.
