|Dow||+175.83 to 16,838.74
|S&P 500||+16.67 to 1,971.73|
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|10-YR Yield||+0.042 to 2.387%
|Gold||-$6.40 to $1,299.80|
|Crude Oil||-$0.82 to $96.53|
Do you have an E-ZPass transponder you use in New York? A SunPass in Florida? A FasTrak in California? Or maybe you’re one of those old-fashioned types who likes the sound of coins clanging into the basket at a traditional toll booth.
No matter what, chances are you’ve paid hundreds of dollars in tolls on pay roads or high occupancy lane usage over several years of commuting and vacationing. It’s no fun. You may be sick of it. But it’s an unavoidable expense if you want to get from Point A to Point B!
So what if I told you there was an easy way to turn the tables around? A way for you to make money from unavoidable “tolls,” rather than someone else?
Well, there is. You can buy shares of master limited partnerships (MLPs) that own the nation’s energy byways, thruways and storage depots!
Think of it. Every oil or natural gas well in this country is just the starting point in a long energy journey. Every drop of crude or cubic foot of gas that comes out of the ground is basically useless from a business standpoint … unless the company that extracts it can get it to market and sell it.
“Every oil or natural gas well in this country is just the starting point in a long energy journey.”
Trucks, tanker trains, ships and pipelines are the primary means of transportation. Vast tank farms are utilized for storage along the way. And all along the way, someone is collecting tolls for their usage.
The thing is, those tolls don’t really depend on the value of the product being shipped. They depend on volume. The more oil, natural gas, or natural gas liquid being shipped and stored, the more money the toll collectors stand to make.
In this country, many of those collectors are publicly traded MLPs — companies you or I can buy right from a standard brokerage account! Not only do they offer you a unique way to profit from the growth associated with the domestic energy boom, they pay out handsome dividends from the cash flow the tolls they collect generate! You can easily make double or triple the lousy return that government bills, notes, and bonds offer.
|Getting energy to the consumer involves a long journey and includes trucks, tankers, ships and pipelines.|
So if you’re interested in getting paid from every beep of the energy toll-way transponder, give MLPs a look. It’s worth pointing out, as the Wall Street Journal does today, that MLPs have returned almost twice as much as the S&P 500 over the past half decade.
Do you have a favorite MLP in the bunch? What do you think about the concept of making money from energy toll-ways? Is there anything that can derail the strong performance of these companies? Or do you, like me, believe this trend has years to run? Share your thoughts at the Money and Markets website!
|OUR READERS SPEAK|
The comments keep pouring in on the conflict in Ukraine and on other topics, such as Wal-Mart Stores (WMT, Weiss Ratings: B).
Reader H. Craig B. said: “Larry Edelson is right, the ‘cycles of war’ (and conflicts) just ramped-up another notch … Good luck and sleep tight! No gunfire around here for us at this time, unless you live in a place like St. Louis, Missouri. Larry has repeatedly warned readers here that the ‘cycles of war’ are global, AND domestic here at home.”
Reader Larry added that: “Putin is determined to prevent Ukraine from becoming a NATO country. That is clear. He is testing the ground and how far he can go without causing an all-out war. He believes that the West would not risk the war to protect Ukraine. That is also clear. I believe that Putin will get what he wants. Once the power is balanced, peace will come.”
Finally, Reader Bob said: “The thing people need to realize is that the possibility of WWIII is very small. The Russian/Ukraine dispute is a proxy fight like the Spanish Civil War. Both Obama and Putin are playing poker while people are getting killed and lives being destroyed.”
Diverse opinions all around. It’s worth noting that others on the website believe Ukraine’s own government leaders are no better than Putin, and that neither side can be trusted when it comes to describing events on the ground.
My personal take is in line with Larry’s above — that Putin is trying to push the boundaries to see how far he can go without provoking a more serious response from the West. If he goes too far, however, the low-grade proxy war could turn into something much worse!
As for Wal-Mart, we got a couple different perspectives over the past couple days. Reader Chuck B. said: “I recently bought a new pair of eyeglasses at Wal-Mart. They had a frame style I liked better than at other places I tried, and for about the same price, and I got very good service.
“But I’ve essentially given up on them for most things. They seldom have food my pet likes, for example, and it’s frequently on sale for a better price at a regional supermarket chain owned by Ahold. And when my old TV gave up a couple of years ago, I did find one I liked at the local Wal-Mart, but it was out of stock and they wouldn’t make any promises. I went home and ordered it from Amazon for a lower price with free shipping and no sales tax.”
Finally, Reader Jean said: “My husband grew up in Benton, Illinois and his father knew Sam Walton well. When one of your readers said that Sam Walton would be turning in his grave, she wasn’t kidding! He was very good to his employees and paid a fair wage. He tried to provide as many products made in the USA as possible.
“When his children took over the business, their only goal was to make as much money as they could. I don’t have any problem with a company making a profit, but not at the expense of their employees and customers. I try to shop at locally owned businesses and, with few exceptions, stay as far away from Wal-Mart and Sam’s Cub as possible!”
Wal-Mart definitely has had problems with keeping inventory of important products in stock, a source of frustration for me on multiple occasions. I tend to buy staples like paper towels or plastic silverware there, but stick to my local supermarket for typical groceries. The pricing is competitive and the shopping experience is much more pleasant!
Feel free to keep those comments coming at the website!
|OTHER DEVELOPMENTS OF THE DAY|
Family Dollar (FDO, Weiss Ratings: B) may sell cheap stuff. But its stock price is getting more expensive, now that Dollar General (DG, Weiss Ratings: B+) has joined the bidding war for the discount retailer. Dollar General is offering $9.7 billion, topping a previous $9.2 billion bid from Dollar Tree (DLTR, Weiss Ratings: B+).
Turmoil continues to grip Ferguson, Missouri in the wake of the shooting of an unarmed African-American teenager, Michael Brown, by a white police officer. The National Guard was mobilized overnight to restore calm. Protesters allege the shooting was unjustified, while local and federal law enforcement officials say the investigation is ongoing.
California’s historic drought continues to weigh on farmers and other water users in that state. Almost 60 percent of the state is experiencing “exceptional” drought conditions, threatening to impact key fruit and vegetable crops.
A Federal Reserve that has basically fallen behind the curve in every major tightening or loosening campaign in the past three decades swears this time it won’t. Riiiggghhhtttt.
Big money from overseas continues to find its way into some of the most overheated real estate markets in the world. Case in point: The Sultan of Brunei, an oil- and natural gas-rich, Southeast Asian nation, is trying to buy the Plaza Hotel and Dream Hotel in New York City and the Grosvenor House in London for $2 billion. The Plaza is currently controlled by the Sahara Group of India, which spent $430 million for its large stake two years ago.
Reminder: You can let me know what you think by putting your comments here.
Until next time,
P.S. The stocks and ETFs in the Weiss Million-Dollar Ratings Portfolio have made Dr. Weiss $345,690.56 richer. Click here and learn how to get the next set of “buy” and “sell” signals BEFORE he acts on them.