W. Buffett and Kinder Morgan Inc.

A lot of speculation has been thrown around lately about Buffett's bet on oil giant, Kinder Morgan (KMI). The bets have been about whether or not he has been profitable on it, whether or not this is one of his few losing bets that he's made, and even if this was some sort of outcome he didn't predict. After all, so many investors wait on his moves and simply follow him on his trades without a second thought. It leaves a lot for the movement of a stock. Therefore, today I want to discuss the bet the Buffett made on Kinder Morgan.

Buffett made his gamble on KMI back when the stock had supposedly hit rock bottom - when it was trading in the low twenties to high teens per share. With that being said, the stock now trades in the high $17 range for the day (currently as I write this article). This means that Buffett likely has yet to make a profit unless he was lucky enough to bag his two million plus shares of the company for a slash off the top. This being unlucky, it's more likely that he had to pay a premium to obtain them as such a large number would not come easy. Buffett then would be said to have to break the low twenties in order to become profitable on his stock pick this time around. If you do the math, that means that Buffett even just currently is down a massive percentage on today's market. Needless to say though, the amount were talking about is such a small blip on the radar of a company as big as Berkshire so the returns are negligible at best.

Watch List: Kinder Morgan

If you’re like a large handful of investors right now, you’re probably asking yourself if it’s a good idea to load some of your cash into Kinder Morgan. The stock that was only recently trading for more than double its current value finds itself at an impasse as it has now plummeted to a measly $17.71/share over a few short months. This presents a chance for dividend growth investors because even though they slashed the high dividend payment to only 2.88% now, it is now trading at a huge discount. Also, the big man Mr. Buffett decided to load his eggs into their basket at the discount price. You’d almost think that the stock was being sold at Walmart on rollback!