The place to be in this vicious market

A portfolio of master limited partnerships that yields roughly 6% is there for the asking.

By Jim Cramer Aug 11, 2011 9:07AM

jim cramerthe streetSomeone 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 master limited partnerships Wednesday. On a day when the Dow ($INDU) tanked more than 500 points, almost all were 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, catching a monster move, knows.

 

You just caught a four-point move from the $32 level simply focusing on yield, or focusing on insider buying, which is aggressive in LINE.

 

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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 throughput 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.

 

At the time of publication, Cramer had no positions in any of the securities mentioned.

 

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network’s sites.


Follow Cramer's trades for his Charitable Trust.
9Comments
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Come on monitor, get rid of the sexy 28 year old nurse already.!!!!!!!!!!!!!
Aug 11, 2011 11:27AM
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Jimmy you've been working way to hard for us home gamers , you need to start thinking of yourself for a change, a vacation Jimmy ,  a long one, A world cruise ,    You and the wife   Go Jimmy Go
Aug 11, 2011 9:22AM
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Now that you think Obama will win the re election next year....I have stopped reading your lines...GADS..
Aug 11, 2011 10:16AM
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The buck stops with the people. After losing trillions of dollars of our stock market value political actors wonder why folks riot in the streets and poll their displeasure. This wake-up call is going to cost many actors and pundits their high paying worthless careers.
Aug 11, 2011 9:53AM
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Do not put them in an IRA ...... they can create a tax nightmare .....
Aug 11, 2011 4:23PM
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Cramer never talks about the tax complications of these.  I own 400 shares of EPD and apparently that's not enough to trigger some of the headaches likes being required to file returns in multiple states, so frankly I'm afraid to really load up because at some point it will greatly increase my tax prep bill, with no guarantee of good returns.  
Aug 11, 2011 12:39PM
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reverend cramer

ranting against how unfair the ultra short funds are raises 3 questions:

1.since there are both long and short ultra funds isn't that balanced and fair?

2.if the ultra short funds are so powerful that they overwhelm the market doesn't that indicate

we should be buying them

3.or is it that your individual stock thesis is wrong and etf's are proving you wrong?

 

you know the answers you idiot

 

sds when short..........dia when long  .......hedging with covered calls is the proper way

 

getting  killed by high yielders who cut dividends and have accounting "surprises" is cramer's

way of slaughtering his followers with his outdated thesis ........rigor my ---ss

 

Aug 12, 2011 6:57AM
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Ya gotta love msn money. Article asks "Has Gold Topped Out?". Three articles above it "US Mint Suspends Collector's Coins Due To Soaring Prices." So, wonder what today's Fraud de Jour will be? As to Cramer, note at the bottom of the piece it states "At the time of publication, Cramer had no positions in any of the securities mentioned".

MAY THE FARCE BE WITH YOU!

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cheezy2:  

 

I was thinking the same thing.   If President Obama gets re-elected  I will know the people in this country are crazy. 

 

Now he is looking to put all Fannie and Freddie defaulted homes in the rental business for the Gov't.    He wants to nationalize everything and we would vote him in again???    Wow!   Is he related to Hugo?

 

Otherwise MLPs have been good for a long time.   They were especially good when the bottom hit in March of 09.  The ones I bought very low have doubled since then with some good yields of over 5 - 6%.  I wish I would have had a million to spend at that time.

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