Mar 13, 2022Liked by Dominic Frisby

DEAD MONEY IN PIPELINES? The recent price rises over the past year, particularly oil & gas, probably shouldn't be a surprise to anyone. Still, it looks like I've managed to position myself in such way, as to miss-out on a sizeable chunk of the price action.

The past 10+ years have been dreadful for energy investing - I've been no exception! (I got burned by coal & still bear the scars).

In an effort to reduce risk & collect some dividends along the way, I decided to change tact and set a portion in the US oil & gas pipelines - up until mid 2020 it seemed reasonable, with limited downside during the crash, dividends continued to be paid & even increased along the way.

The situation has changed rapidly since then however, (particularly inflation), so those 6 & 7% yields don't quite cut it anymore without any major appreciation in share price.

By far my largest pipeline position, is Kinder Morgan (KMI) & a bit of a disappointment to be honest, then Enbridge (ENB), and some smaller positions in Pembina Pipeline Corp (PBA), The Williams Companies (WMB) and Oneok (OKE). I also took a punt at Cheniere (LNG) (gas liquefaction, which HAS been delivering more recently).

My dilemma, is whether to trim my positions in KMI & ENB and try to grab more of the tail in the current commodities bull or just leave alone - "Strong & Stable" to quote from a short lived British P.M.?

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UPDATE, I've since decided to just sit on these names & stick to the plan, rather than chase the market & prices elsewhere. Good quality, tangible, critical infrastructure assets in an inflationary environment - could be worse I guess. Shall I heat the room or buy a Starbucks lifestyle in a carton instead?

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