canadian income trusts to be taxed

Quote from Hurricane:

The question is simply will the USD fall against the CAD? The USD may weaken for all the reasons indicated but might still strengthen relative to the CAD. The Canadian economy is starting to slow down (due to the U.S. slow down) and further interest rates increases seem unlikely. I heard two firms make projections about the CAD over the past two weaks. One looked for a 2007 high of .89. The other looked for a 2007 low of .81 to .82. Both might be right but it still makes me think there's more downside than upside.
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I suppose if I am going long I should look into some mechanism to hedge or profit from a USD/CAD relationship change. This is a bit of a new area for me. I don't currently play currency futures or currency forwards at all since my broker does not support it. So if I keep to my current broker I probably need to find a way to passively and indirectly hedge through the equity and bond markets some how. Perhaps buying options on a dollar index or something. I know Rydex has a currency fund that can be used to play on changes in dollar strength. For example: Rydex Dynamic Strengthening Dollar (RYSDX) or Rydex Dynamic Weakening Dollar (RYWDX) amplifies 200% an underlying dollar change. But I'd prefer to use an direct ETF currency index with an options chain if I knew of one. This way I could write an upper and lower credit spread using an Iron Condor to earn premium from slow non-trending movement and build up a profit reserve for future currency shock. It would be a lot of work to do collar or straddles/strangles on each of the equities and unfeasible for some since most trusts are not directly listed on our US exchanges except as pink sheet closing price mirrors.

Right now I am going to watch it for a quarter and see how things trend. Right now I think the currency relationship favors me since the dollar is low and I am paid high yield relative to CA dollars. If CA currency starts to trend down back to its more traditional ranges (e.g. about 30% discount to dollar) I'll start backing out. But I think that Canadian currency is destined to move toward par with US currency in the long run; either that or we eventually adapt a single "North American" trading currency. :D

TS
 
11-13-06 08:04 AM

ent, pvx, pwi, pwe, pgh, hte, erf, cne, bte, aav, pds, fdg....These are the ones I have owned in the past.....


I do like PDS and FDG at these levels....FDG especially to start a position, below $20....I bought on FRIDAY @ 19.72

Well including dividends on FDG a nice +50% return that I was happy to take today at 29.34.....BTW 11/13 was the bottom in FDG.....I guess every once in a while I get one exactly right on the entry....But exiting only time will tell, greed got put on hold today when I got out of 85% of the position today....I'm quite happy because this was a very large position for me and I had been waiting for a day like today to exit.......

I have no real reason for the move today, but all the CANROY's that I own got a nice haircut from me today.....No real fundamental reason, but just a gut feeling the market was very over extended and option market makers were just sticking it to anyone who bought MAY PUT options on anything expecting recent history to repeat itself....Don't get me wrong I was expecting more volatility than this in May, but it might just start on monday.....

HTE and FDG had been my largest positions in this area and I was getting greedy with this kind of performance over the past 5 months.....HTE was 60% sold off today...

ERF, AAV, PDS, PWE, PGH and CNE were bought in early march when the flight to yield was occuring and managers were looking for anything with yield.....The play has paid off in decent conservative capital gains...All got reduced by at least half today...

JUST THOUGHT I SHOULD BRING THE THREAD BACK INTO PLAY CONSIDERING THE RECENT STRENGTH OF THIS SELECT ENERGY SECTOR THAT MANY PEOPLE WROTE OFF 7 MONTHS AGO.....LIKE I HAVE JUST SAID I WAS A NET SELLER OF STOCK IN THIS AREA, BUT THE RECENT MOVE IS CORRELATING WITH EVERY STOCK IN THIS AREA.....REMEMBER CASH AND DIVERSIFICATION IS KEY

$COSTAverageMAN
 

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Hey thanks for the bump - I have not been on this site in months.

Yes indeed the Canadian Trusts have been my BEST investment since Nov 2006 to date. I am up on average of over 30% on basic price movement not to mention the HUGE dividends.

Some of them gave me a little scare when they suddenly delisted off the pink sheets. Apparently trading officials realized late that some of the partnership types were not permitted to be held by foreigners. But I think what it was all about was the Canadian government trying to back peddle the huge mistake of taxing these trusts and are now afraid foreigners are going to take over these assets by buying them out. So they are starting to enforce the rules on ownership.

I wish I had not dumped FDG on 31 Dec for tax losses. That one I bought before the huge halloween massacre. Not its way out of range to be taking chances on. Another trust - True Energy scared that crap out of me when greedy directors officers tried to vote away the trust status and convert to a growth company and stop dividend payouts to help in new acquisitions. Man - that hurt! Lost 25% overnight and then realized that it was way under book value so I tripled down and backed up the truck to buy more. Fortunately we stockholders nixed that idea and we replaced a bunch of the board for screwing us. The dividends are restarted and the price is going back up again. I'll dump when I get way positive again.

All the others I am keeping. The globe is flush with cash and yield hungry. There is at least 20% more to the upside just on commodity plays. If the government reverses the tax rules or they convert to Master Limited Partnerships or rehost in the states to avoid taxes we are going to have windfalls yet to come.

Canadian Trusts post Mr. Flaherty's insanity have been by far the best and fastest investment windfall I have ever made. It's just too bad that it came on the backs of all those poor Canadian Pensioners who got raped by their idiotic government.

BTW - a number of them have already been bought up and taken over by private equity just like I predicted...
 
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