I have traveled in the Middle East for 50 years.

When I first hitch hiked across North Africa in 1968, camels were everywhere, and most of the population was barefoot.

These are the things I recall when dictator Muammar Gaddafi was deporting me from Libya.

When I grew up a few years later, I covered the neighborhood wars for The Economist magazine during the 1970's.

While representing Morgan Stanley in the firm's dealings with the Saudi royal family in the 1980's, I paused to stick my finger in the crack in the Riyadh city gate left by a spear thrown by King Abdul Aziz al Saud when he captured the city in the 1920's, thus creating modern Saudi Arabia.

They only mistake I made in my Texas fracking investments is that I sold out too soon in 2005, when natural gas traded at $5 and missed the spike to $17.

By now, the only camels you ever see are tourist rides at the foot of the pyramids, the racing camels of the Gulf Emirates.

So let me tell you about the price of oil.

It's going up.

No matter how much oil there is in the world, it is tough to beat a global synchronized economic recovery.

China, Europe, and Japan all running hot at the same time. I bet you didn't know that all of these economies are currently beating America's 3% growth rate, in some cases by miles.

Giving a bow to my new long term forecasts, I don't see the end of global quantitative easing until October 2018. The current bull market in stocks should end in mid 2019, and the next recession won't hit until 2020.

So there is ample room to get one more trade here in oil.

You should do well buying majors like Exxon Mobile (XOM) or Chevron (CVX). You can probably beat those returns through investing in Occidental Petroleum (OXY).

But I'll tell you where the real money will be made:

Master Limited Partnerships, or MLP's.

I always find it a useful exercise to sift through the wreckage of past investment disasters. Not only are there valuable lessons to be learned, sometimes decent trades emerge.

I have been doing that lately in the energy sector, a hedge fund favorite these days, and guess what?

MLP's are back. And no, I'm not talking about the Maui Land and Pineapple Company (MLP) (yes, there is such a thing!).

But these are not your father's MLP's.

With overnight cash yields still at a paltry 0.50%, the allure of high yielding MLP's is still there.

Let me start with my investment thesis.

It is always better to invest in an asset class that has its crash behind it (energy) than ahead of it (equities, bonds).

And lets face it, the final bottom in oil at $25 is in.

We may bounce around in a $45-$60 range for a while. But eventually, I expect a global synchronized economic recovery to take it higher.

And while I have never been a fan of OPEC, they are showing rare discipline in honoring the production quotas negotiated in late 2016.

That eliminates much of the downside from MLP's for the next 18 months and makes it one of the more attractive risk/reward trades out there.

The fact is that the energy revolution in the U.S. remains very much intact.

Keep a laser like focus on the weekly Baker Hughes rig counts, as I do, and you see that we have been on a relentless upturn for nearly two years.

Except that this time it's different.

Thanks to hyper accelerating technology (yes, there's that term again), new wells employ a fraction of the labor of the old ones, and are therefore more profitable.

That means they can function, and even prosper, with a much lower oil price.

Since everything is political these days, I would remiss in not bringing this unsavory issue up.

To say that the new administration is friendly to the oil industry would be the understatement of the century.

Look no further than the Keystone pipeline, which after languishing for eight years, saw approval from the new president during his first week in office.

That means lower taxes, more subsidies, and less regulation of the business, all profit boosting measures.

There is another angle too.

By now, you should all be experts on inflation plays, since you read my opus on the subject in my newsletter only yesterday.

Oil is a great inflation play. As prices rise, consumers can pay ever-higher prices for energy.

The great thing for MLP investors is that many revenue streams are inflation-linked according to fixed formulas, much like TIPS, (Treasury Inflation Protected Securities).

But you have to be clever by half to take advantage of these new trends.

Thanks to the crash, the surviving MLP's are now a much better quality investment.

Balance sheet quality has improved as a result of deleveraging in the last three years, and the worst of the ratings downgrade cycle is behind us.

Importantly, some $50 billion- $60 billion worth of growth opportunities for MLPs are expected during FY2017-2020.

That makes the industry one of the great secular growth stories out there today.

As an old fracker myself I can tell you that the potential of the revolutionary new technology has barely been scratched.

Thanks to technology that is improving by the day, a Saudi Arabia's worth of energy reserves remain to be exploited, and maybe two, turning the US into an energy-exporting powerhouse.

Industry experts expect MLP distributions to grow by 3%-5% annually over the coming years. Few other industries can beat this.

That means avoiding upstream Exploration and Production companies; where there is still a ton of risk, and placing your bets on midstream companies that operate pipelines.

And by midstream I don't just mean pipelines, but also processing facilities for natural gas liquids and storage and terminal facilities.

You especially want to look at companies with high barriers to entry and attractive assets in high- growth and low-cost production regions.

Companies with a sustainable cost advantage, operated by experienced management with proven geological prowess are further pluses.

MLP's also stack up nicely as a diversifier for your overall portfolio.

Over longer time periods MLP's have generated similar returns to equities, with similar to slightly higher levels of volatility.

Historically they have traded at lower yields than high yield bonds, but currently they are yielding 250 basis points more.

And now for the warning labels.

This is not a new story.

As you can see from the charts below, MLP's have been rallying hard since oil bottomed in January, 2016.

Still, with yields in the 7%-10% range, a certain amount of pain is worth it.

Still interested?

Take a look at the Alerian MLP ETF (AMLP) (6.11%), the Global X MLP Energy Infrastructure ETF (MLPX) (6.11%), and Valero Energy Partners LP (VLP) (4.72%).

By the way, can any readers tell me if my favorite restaurant in Kuwait, the ship Al Boom, is still in business? The lamb kebab there was to die for.

Don't Throw Out the Baby With the Bathwater