MLPs in November

November was another down month, but markets recovered strongly off their lows in the last week as was the case for the Alerian MLP Index. It's hard to remember, but these securities traditionally have low betas (forgotten this year). They started the month trying to push thru the 220 ceiling which would have carried the index to territory last seen in early Sep. But they were caught up in the market sell-off taking them to a little under the 160 lows following the Lehman demise in early Oct. They were swept along in the rally in late Nov, ending the month at 183.


Alerian MLP Index --- November 2008




Their story is similar to the ones for REITs & high yield (junk) bond funds. All are selling at very depressed prices offering extraordinarily high dividend yields for the brave. At the same time, the 10 year Treasury bonds yields less than 3%.

Even though their fundamentals remain quite good, they are facing more selling pressure in Dec (along with the rest of the stock market) from tax loss selling, year end adjustments (a kind way of saying selling) & more fund redemptions.

Blackfriday retail sales came in a little above last year, but margins could be lower. An analyst on Bloomberg TV said she saw Wal-Mart customers were focused on getting presents for kids (with an emphasis on electronics) & necessities. Other purchases were deferred & they were not continuing on to other retailers. Apparel is having one tough year, most merchandise is reduced 60+%.

I am now an Amazon Affiliate, hosting 3 of their ads in my right column. I'm also looking to get one of the new netbook computers for practical reasons. Amazon is among the vendors I'm checking with because they have good prices & many of these products have free shipping. There is one widget for their deal of the day & another to search all their merchandise. Amazon is one of the largest retailers in the world hosting a wide variety of products at excellent prices.

This week I'll be in & out but will work hard to keep market posts current. Retail sales along with the fate of the auto companies are 2 of the major stories to follow. Combining them, the auto companies should be reporting Nov sales shortly & they are expected to be dreadful.