One popular investing myth is that the market always efficiently prices stocks. The truth is that active traders have a herd mentality, and often push prices to extreme levels in the short term.
That’s when it truly pays to be a contrarian, to be able to buy when prices are down and dividend yields are up.
I believe this is currently the case with energy master limited partnerships (MLPs). Crude oil fell 7% in July, which was its worst monthly performance in two years. Natural gas also declined more than 4%.
However, the two names I’ve found are pipeline and transport firms that have largely fee-based businesses and are not affected by a temporary drop in energy prices.…