Surely all of us are jubilant, what with NGL moving so decisively towards the upside. And while nothing ever goes up without falling back at some point, clearly this trajectory will continue for the next several weeks. Things will change following the issuance of guidance and then that will be followed by the distribution event itself.
What I wish to address now is this:
What should we be doing now while we see our gains adding up quickly?
It's a loaded question in that there are a number of things we might do. The lone proviso for me, personally, is that I do not consider relinquishing any of my NGL units at this time. I'm open to making changes in other positions but not this one as I see continuing gains that ought not be squelched through selling prematurely.
So I thought I might speak to what I am comfortably doing right now:
While we're always looking at other possible positions in other picks, the one thing that is inescapable is the need to fund acquisitions. This calls for accumulating cash aka "dry powder" to be used when launching positions and adding through secondary purchases.
Recently I mentioned here that I'd built up a reserve fund in the amount of $160,000. As of today it stands at $170,000. This is pure cash in a tethered (tied in) checking account with ACH (electronic cash transfer capability) privileges built in. This has me positioned to push money around in a matter of seconds with no day-long wait period required.
So then, why so much money?
So glad you asked! Something is going to happen and it will set us up for absurd opportunities. It might be something of a global concern, perhaps a U.S.-denominated thing only. But things have been chugging along without major mishap for long enough to have me thinking there will be a calamity and I want to be ready to avail myself of unexpected opportunity.
There is, in reality, no such thing as "unexpected." A former marathoner, I learned years ago that it is incumbent upon each of us to prepare for the unexpected or find yourself unable to make it to the finish line. Just two years ago, more or less, my stock accounts were showing a total value of $235,000. My present cash component alone today is 72% of that earlier total value and you know the size of my NGL position.!
That should tell you how convinced I am that something is going to happen and we need to be ready for it. In track lingo we call it "pacing." Preparedness is at the root of all attempts to pace oneself.
And if I should be wrong? It's easy enough to spend money. It will not be a problem for anybody here!
Each of us must decide for himself how to move forward but one thing is for certain: If we're raking it in now, it's because of the cash we put into motion before. If your NGL cost basis is lower than someone else's, it's because you coughed up the money when units were cheap.
So I'm now asking that we give some thought as to building a cash pile right now, before the drama begins.
Your thoughts on this and all other pertinent matters are always important to this board. So have at it!
As for my selling any NGL? As I've said before, not a single unit will be sold without first apprising this board of same. Today we're edging towards the $12.50 point. I will not sell at anything even remotely near this number. I got into this for the long haul in a wish to make a killing. My $56,000 gain is hardly a killing. But I believe it will continue moving in the right direction.
Stay on track, folks!
