Sorry, but you are right in that this series of drops was very much expected. MLPs historically operate on a calendar schedule, paying pretty much on the same weeks. This means they all undergo a quiet period following the date of distribution. After all, active traders will be reasoning thusly:
"Hmmmmm.... obviously there's no money to be made here so I'm gonna move on so I can feed the family. If I can latch onto a dip at the right time, I'll relaunch a position. See you guys in a couple of months!"
Clearly they are being reasonable, I believe most here will agree. Yet as a committed long even I must admit I think these distribution hunters are fools because anything hitting the news wires between now and the next next ex-distribution day is almost sure to create a major splash capable of driving NGL towards $15. And that will stop a lot of investors from joining in the run to accumulate units anew.
The price point adjustments we're now witnessing are completely normal and to be expected. I know I've covered this amply in previous posts, hoping to help others preserve confidence.
My own goal is that of adding about 600 units of NGL. It may take a month from here to happen, if at all.
As for price? I'll swing into action at $11.90 with a nibble of just100 units. My thinking is that the price may drop back to $11.25.
I hope I'm wrong, as you'd expect. But I know we make money when the price rises and we bait the trap by building a pile of dry powder to be put to work when the unexpected occurs as it almost certainly will. Knowing this has enabled me to build my position with a cost basis of $10.31.
It's very important to be aware of this much:
Investors will be watching for opportunities to grab units on the cheap BEFORE THE NEXT RUN- UP sure to happen because we all know NGL is coming back from the dead and destined to become a major money-maker for us. So it'll come down to who can outlast the other poker faces in the game. Guidance will say everything for at least half of all investors because they don't have the stomach to make their own decisions. Frankly I don't respect them in the least, viewing them as a combination of gutless and stupid.
So there you have it from me. I hope it helps some here.
As for my buys going forward, count on me to inform the board of every move I make. I think we'll test $12 tomorrow and if it happens, I'll get picking 100 units up at $11.90 before the end of the week.
My advice would be to stay strong. The units will increase in value as we get closer to ex-distribution. We know NGL will price at above $15. So ask yourself if it's worth paying $12 today knowing your $12 will fetch $15 in two months. I like gaining 25%.
Best of good fortune, everyone!
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