Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.


$1,230 in Instant Income?

$1,230 in Instant Income?Our top income expert recently pulled the wraps off his breakthrough moneymaking technique. And he proved beyond a shadow of a doubt how you can use it to generate instant cash payouts of up to $1,230 (or more). Over and over again. But then he took things a big step further and guaranteed you can make $1 million by following his program. And the second he did, our phones went nuts! Space is limited — get the details here.



These Signals Delivered Loud ‘16 Gains

By Robert Rapier on July 1, 2016

Over the past few months I have written several articles about signals that have historically indicated that a sector is undervalued. One pattern from the past is that when natural gas prices drop below $2.50/MMBtu, the price generally doubles within two years. This makes natural gas stocks and ETFs potentially attractive. In my presentation at Investing Daily’s recent annual Wealth Summit in Las Vegas, I highlighted these dips below $2.50/MMBtu over the past 20 years:


At that time (mid-May) the price of natural gas was hovering around $2/MMBtu, but it has since increased about 50%. Now closing in on $3/MMBtu, this indicator is no longer the screaming buy signal of recent months. A pullback isn’t out of the question considering that natural gas inventories are at all-time highs for this time of year, so if you missed the opportunity the first time around you could get a second chance.

Another indicator I have highlighted is the yield of the Alerian MLP Index (AMZ), which is a composite of the 50 most prominent energy MLPs. The index includes MLPs involved in gathering and processing, natural gas transportation, petroleum transportation, exploration and production, coal, compression services, propane, refining and shipping, and captures about 75% of the sector’s market capitalization. The index tracking the total returns of AMZ components, including distributions, is known as AMZX.  

The average yield of the AMZ since 1995 is 7.46% (annualized, but recalculated daily). Historically, when the yield drops below about 6% it signals that the sector is becoming overvalued, and a correction ensues. Likewise, when the yield tops 10% it signals that the sector is undervalued. Until last December, this had occurred twice in 20 years. When the AMZ yield exceeded 10% in December 1999, the next 12 months saw the AMZX rally 46%. When the yield rose above 10% in December 2008, the AMZX rose 76% over the next year.

I highlighted this signal back in December in The Loud Message of Fat Yields. Shortly after I did so, on Dec. 14, the AMZ yield went above 10%, so I was able to highlight only the third such instance in the past 20 years in another slide presented at the Wealth Summit:


The AMZ yield spent two days above 10% in December, and then it spent over a dozen days above 10% in January and February 2016. In fact, on Feb. 11 the yield reached 12.01% before retreating.

So was this signal reliable this time around? Indeed it was. If you had purchased the AMZ on Dec. 14 (which you can do through many exchange-traded notes and funds) when the signal was first triggered, you would have realized a total return of 32% thus far. Had you waited until the yield hit 12% you would have realized a total return of 57%, but note that this was a yield that had only been reached once previously.

The AMZ yield has now dropped to 7.26%, below its historical average. Thus, the sector isn’t as deeply discounted as it was a few months ago. The historical 10% buy signal may not be reached again for years, but when it happens again we will be here to remind you to buy the sector. Likewise if natural gas prices again drop below $2.50/MMBtu.

But you don’t have to wait around for buy signals that only come once or twice a decade. To take advantage of in-depth research and winning energy income recommendations, consider subscribing to MLP Profits.

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)


You might also enjoy…


Obscure Tax Law Forces This Company to Pay Out 90% of its Profits

A 50-year-old loophole is forcing one company to pay out $9 of every $10 it makes from ironclad contracts with the U.S. Government.

In fact, over the past seven years, it’s made payments ranging from a few dollars… to tens of thousands of dollars… 30 times. Without a single cut! 

Most folks don’t even know this company exists, but the ones that do are making a mint.

Like Ted B., who’s set to receive a check for $1,096 just a few days from now.

Merrill H., a 58-year-old from New York, has collected over $3,385 so far. 

And retirees Beth and Terry P. have raked in $16,555.

I’ve put together a special report that will give you all the details, including simple instructions on how to get your name on the payout list before the next cutoff date.

You can get your copy here.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.