As things settle in on my addled brain, I'm thinking I may have been too abrupt in putting DKL on the proverbial back burner.
True, trading volume is paltry, at best. But that need not mean I shouldn't hold a position. I just need to scale position size to what will become executable, should the need arise.
That said, I picked up another 100 units today and now hold 200 units of DKL with a cost basis of $28.50 or a dime above the prevailing price/unit.
Something we might want to think about is the bottom line effect of dropping down assets into DKL, an event-in-waiting already announced by DK, the General Partner for DKL. There should be no doubt as to this becoming instantly accretive to DKL's bottom line. With that in mind I'm expecting to continue adding here, knowing full well that I may elect to tap out should NGL go on fire sale level or some other pick do so. DKL, for the moment, represents a petty cash drawer.
It can't possibly hurt me to place a smallish amount of cash into this pick paying about 10% yield. The active investor engaging in frequent trades could do far worse than taking a position in DKL.
Is it money being placed into a passive fund of sorts? Sure, it most certainly is. So what? Is that bad?
I think not. None of us can be sharp or smart all of the time. Having a bit of a cushion sitting in the background undisturbed will probably result in some nice distribution money accumulating. This frees me up for dealing with far larger positions in other picks. And a position of just over a few hundred units is most likely going to fetch about $1,000 annually with more to come following the dropdowns from ALDW.
This is interesting and I'm thinking I may have been hasty in not reserving a place for a very modest outlay of cash.
Ponder, everybody.
