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Part 2: Money Making Lessons From The 2014 Data For Midstream MLP Investing

I am going to borrow and paraphrase a few words from a very good Seeking Alpha article on risk. "To measure risk, the finance industry focuses on an asset's return volatility. Return volatility simply means how dispersed an asset's returns are about that asset's average return over a certain period of time, including to the upside and to the downside. An asset whose returns are more stable is considered less risky, while an asset whose returns are more volatile is considered more risky. For individual investors, a risky stock is one where you have lost money on the investment."

I use intra-year DCF (Distributable Cash Flow) projection changes as one of my key metrics for measuring risk. There are fundamental explanations for the numeric volatility of these earnings projections. The volatility for MLPs is due to the type of contracts a company has own its assets. The higher the… Read More …