(Idea) MPLX
Buy For Its Multiple Layers Of Protection
With the S&P 500 soaring to new highs on a daily basis and investor euphoria in the air, investors must take heed of growing downside risk. Markets are getting frothy, which always brings to my mind the Warren Buffett quote that “the less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs.”
In that vein, I’d like to point investors to an investment with multiple layers of protection in nearly any economic scenario, namely, the equity of the master limited partnership MPLX (MPLX).
I bought MPLX units for the HFIR Energy Income Portfolio on April 30, 2021, at an average cost of $27.27 per unit. Since then, I’ve covered the name extensively in the HFIR Energy Income service. MPLX units have paid $9.93 in distributions over the holding period. Their total return since purchase is 98.5%, for a 22.3% compound annual return. The units will remain a core income portfolio holding. Indeed, I consider them a ballast portfolio position to stabilize performance when the going gets rough.