Few things infuriate me as much as companies that advertise themselves to mom and pop investors as safe places to put money when, in realty, they can feel bankruptcy knocking on the door. When I was writing for Seeking Alpha in the early 2010s, there was a company called Linn Energy that billed itself as a monthly dividend income company for retirees that paid out dividends of 12-15%.The idea was, “Hey, give us $10,000, and you’ll collect $125 every month.” For retirees starved for income in the low-interest environment, it sounded tempting. And for those who were tempted, they got burned and lost all of their investment when Linn Energy filed for bankruptcy on May 11, 2016.
But the same story repeats itself every boom and bust cycle in the oil industry. In November 2019, the Wall Street Journal profiled Kimbell Royalty Partners and several other mineral/oil royalty stocks in … Read the rest of this article!