Someone listened to the Federal Reserve Chief, who gutted any opportunity to make money in Treasurys, and went and got some yield.
That's the only explanation that I can come up with for the incredible resurgence in the master limited partnerships today. Almost all of them are up, as witnessed by the moves in Enterprise Products Partners (EPD), Markwest Energy (MWE) and Energy Transfer Partners (ETP).
I don't care that I sound like a broken record about yield, but a portfolio of master limited partnerships that yields roughly 6% is there for the asking. These mlps are amazing in their comebacks as anyone who bought Linn Energy Limited Liability (LINE) the other day and has caught a monster move knows.
You just caught a four-point move from the $32 level just focusing on yield, or focusing on insider buying which is aggressive in LINE, even as it is supposed to doing a secondary sometime soon.
In rough times like this you need touchstones. MLPs with good yields are touchstones because they are, for the most part, toll roads. During the gigantic business downturn of 2008 the throughout on all of these mlp pipelines barely budged. It was remarkable. They were much more consistent than even the ordinary utilities that we are supposed to trust for consistent earnings.
You are not reaching for yield. These have all fallen from their highs, in some cases fallen hard. That, of course, also tells you that they can lose you money as any stock can versus a short-term treasury.
Nonetheless, buyers of these are obeying Bernanke's wishes and accepting that they have to go find other forms of "fixed income." These mlps have a lot of the characteristics of fixed income and remain the best place to be if you want equity exposure in this vicious market.