Official Short-term Investments Thread

[Canmorite]

Almost everything on the V is getting bashed. Nothing wrong with the companies, just the slide in commodity prices.

I see SKE, PLE heading lower in the next few weeks.

[djayz]

i sold ple at .64 i need the money for PTU plus i couldve sold at 1.20 just like all of us and i thought its about time i sold considering its lost half its value already.

PTU is almost my largest holding in my portfolio now...hope it pays off.

[benyl]

PTU has been a dog. What is the deal?

[Mckenzie]

Some sweet news out for URA today:

Commencement of drilling on a property they acquired last month and the filing of drilling permits for their uranium claims.

Not too bad....two news releases in one!

I cant wait for this one to come to fruitition in 6 months time when their uranium properties are near development.

[djayz]

Originally posted by benyl
PTU has been a dog. What is the deal?

yah alot of the uranium companies have been dogs this whole year
DEN went up quite a bit ptu however slowly went down day by day as there was no news or anything. But they have been busy and this next month should bring a lot of positive news releases and the SP should definately reflect that. Hang on tight its a long term investment and the payout might be huge...maybe light ARU?...lets hope haha

[liquid1010]

Anybody else looking at this drop in Oil as an opportunity? I'm starting to seriously look at Dollar-Cost-Avergaing my way down the slope....

[89coupe]

Originally posted by liquid1010
Anybody else looking at this drop in Oil as an opportunity? I'm starting to seriously look at Dollar-Cost-Avergaing my way down the slope....

Smart move, it will only get lower though so be patient. Oil could drop as low as $35/barrel again, watch!

[benyl]

Yeah, I am not putting another penny in oil stock until the end of November. Although I just bought another 1500 shares of Rol.a

[liquid1010]

I highly doubt it will drop below $50-55. A drop that far would kill a lot of juniors IMHO.

[snoop101]

Seems like a lot of the gold companies will have NR by the end of the month. NSM, PLE, and best of all SKE.

[89coupe]

Originally posted by liquid1010
I highly doubt it will drop below $50-55. A drop that far would kill a lot of juniors IMHO.

Yes it would. Think about it though, less then three years ago the price of oil was around $30, there is a good chance it will come back down. Time will tell.

[Canmorite]

Originally posted by snoop101
Seems like a lot of the gold companies will have NR by the end of the month. NSM, PLE, and best of all SKE.

Gold is not the place to be right now.

http://img142.imageshack.us/img142/9873/goldoc6.jpg

[liquid1010]

Where'd you pull that image from?

[Canmorite]

Originally posted by liquid1010
Where'd you pull that image from?

My charting platform.

[Billet]

we will see $50/bbl in the near future

[natejj]

If you guys are looking for some high risk action, check out VAV. They are a small company developing 3d software, and they currentl have a bid in for the contract to replace the snowbirds. I grabbed 20,000 shares at 2 cents.

[Rav4Guy]

Originally posted by natejj
If you guys are looking for some high risk action, check out VAV. They are a small company developing 3d software, and they currentl have a bid in for the contract to replace the snowbirds. I grabbed 20,000 shares at 2 cents.

Venga Signs Agreement to Acquire an Interest in Gold Mining
Company


What exactly do they do...... everything? mining.. aerospace... furniture manufacturing? doggy daycare?

[wtb]

Originally posted by Rav4Guy


Venga Signs Agreement to Acquire an Interest in Gold Mining
Company


What exactly do they do...... everything? mining.. aerospace... furniture manufacturing? doggy daycare?


lolololol

[modded46]

Originally posted by Rav4Guy


Venga Signs Agreement to Acquire an Interest in Gold Mining
Company


What exactly do they do...... everything? mining.. aerospace... furniture manufacturing? doggy daycare?

They make nice PDF presentations? :nut:

[natejj]

Originally posted by Rav4Guy


Venga Signs Agreement to Acquire an Interest in Gold Mining
Company


What exactly do they do...... everything? mining.. aerospace... furniture manufacturing? doggy daycare?

To be honest... I don't know. All I know is I want it to go up to 4 cents.

[Rav4Guy]

WHAT!?!??! really? hmm... taking a closer look at VAV.. they have partial ownership in all their projects...

8.6 mil revenue in 2005
237mil loss from operations in 2005

guess a lot of that went to.... research.

[troyl]

Purepoint Uranium Group Inc: Confirms New Targets at Fire Eye Project

TORONTO, ONTARIO, Oct 12, 2006 (MARKET WIRE via COMTEX News Network) --
Purepoint Uranium Group Inc. (TSX VENTURE: PTU) announced today the results of their electromagnetic and magnetic survey on its 100 percent owned, 10,500 hectare Fire Eye property located in the Canadian Athabasca Basin, host of the world's premier uranium deposits.

Highlights:

- The survey identified clear conductive targets, interpreted as representing areas conducive to uranium deposition;

- Depth to basement is locally less than 600 metres based on magnetic interpretation making this an economical exploration target;

- Purepoint's Fire Eye property lies on trend with the historic Uranium City deposits;

- The Fire Eye property is located 70 kilometres North of the Cluff Lake uranium mine that produced in excess of 60 million pounds of uranium;

- A surface geophysical crew will be mobilized later this month to refine these targets for drilling.

"All of our seven, 100 percent owned projects were originally staked only after reviewing historic data and identifying indicators we consider essential for a uranium ore deposit." said Scott Frostad, Vice President, Exploration, Purepoint Uranium Group Inc. "We are excited to once again confirm the validity of our approach and look forward to advancing these targets to the next stage."

A 377 line kilometre MEGATEM II airborne electromagnetic and magnetic survey was flown over the Fire Eye property at a line spacing of 400 metres in order to confirm depths and areas of conductivity. Purepoint plans to conduct a transient magnetotelluric ground survey on the property commencing later this month.

Purepoint Uranium Group Inc. is focused on the precision exploration of its seven, 100 percent owned, highly prospective projects in the Canadian Athabasca Basin. Established in the Basin well before the resurgence in uranium, Purepoint is actively advancing some of the hottest drill targets in the world's richest uranium region.

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contacts: Purepoint Uranium Group Inc. Chris Frostad President and CEO (416) 603-8368 Website: www.purepoint.ca

SOURCE: Purepoint Uranium Group Inc.

http://www.purepoint.ca

Copyright 2006 Market Wire, All rights reserved.

[troyl]

Looks like PTU is stating to move. Should hear some more from them this month! Things are looking up. Good call Djayz!

[modded46]

Hope no one had stock in Jed Oil.. :eek:

[djayz]

Originally posted by troyl
Looks like PTU is stating to move. Should hear some more from them this month! Things are looking up. Good call Djayz!

:thumbsup: ...north korea is going to want a lot of that uranium :rofl:

[benyl]

Originally posted by benyl
CSHD

Conversion Solutions Holdings Corp (CSHD) US

Just hit $3.10

Trippled my money already.

People are saying it will hit $40.

It is only trading at $2.00 right now, but if you bough in before yesterday, the company is giving out 6 shares for every 1 share you owned. This was an attempt to squeez out the short positions.

There is talk of going to the NASDAQ. There is talk of share prices in the $12 range as that is book value.

This company has the appearance of being Legit in that it is SOX compliant. This could be a lottery winner or the biggest scam! hahaha I have $15K invested that overnight became $84,000. Too good to be true? probably, but $15K to get $84K... me likes the odds.

Anyone else get in? Wonder who is going to sell the movie rights to this one.

This stock is so up and down that TD Waterhouse stopped all buy orders from Canadians yesterday. Something is up with this stock... haha My guess is TD Waterhouse is super short on this stock.

[Canmorite]

Explosive looking chart on CSHD.

[djayz]

BLE had a nice jump again today :thumbsup:

and i just bought another 10k of ptu...my biggest holding now...this better pay off haha

[wtb]

is the ticker CHSD.OB? trading at 1.80?

[iroccragg]

anyone watching SLT.V

[benyl]

Originally posted by wtb
is the ticker CHSD.OB? trading at 1.80?

Yup, that is the one.

It might be CSHDE.OB now.

what a roller coaster ride.

[Mckenzie]

SLT is probably getting some steam from their neighbour ASX. It is rumoured that they hit the motherload. Their PP just closed today and assay results are expected to be released from now until christmas time.

Cannot wait for this one to see what kind of results!!

PS- they applied for a TSX listing...in my experience companies that do not hit with their drilling results do not apply for TSX listings. ;)

[89coupe]

Read http://cnrp.ccnmatthews.com/client/paramount_resources/release.jsp?year=2006&actionFor=617524&releaseSeq=0

This could be very lucrative.

[Toma]

Well..... staying away from spec garbage... my Wrigleys (yes, the gum) options made me 182% this morning in about 2 hours ;)

Now I can go to SEMA ;)

[Mckenzie]

Poor Cameco today. Now that's bad news!!!

I wonder how much premium from that mine was already built into the share price.

[benyl]

Originally posted by Toma
Well..... staying away from spec garbage... my Wrigleys (yes, the gum) options made me 182% this morning in about 2 hours ;)

Now I can go to SEMA ;)

I need some of that action.

This finance class I am taking better get me up to speed on options trading.

[Toma]

Originally posted by benyl


I need some of that action.

This finance class I am taking better get me up to speed on options trading.
I've been dabling in stocks for 15 years. All I learned in that time is that there is nothing to most stocks except perceived value and hype....since they always trade at mulitples..... you can do all the DD you want, but guessing the multiple or basing it on others in that sectors is...well... guessing and hype.

Options on the other hand are of course based on underlying stock price, but you can easily also compute fairly resonably if the option itself is over or undervalued.... pretty straight foreward and what works for me is the common Black-Scholes model. My options workstation does it for me automatically, and I dont buy often, but when I do, I seldom lose anymore. But it is a fast buy, and you need to stay vigilant.

Recenlty, with what I expect to be a long bull market, LEAPS are gonna be what I play for my long term savings.....

[2000impreza]

hypf - anyone looking at this? i bought in a few days ago, seems to be doing fairly well.

[liquid1010]

I don't trade in options yet, primarily because I don't know enough about them. However Warren Buffett has devised a system to value a stock in just a few seconds basically in his head. Essentially takes into account the Present Value of all future cash flows, adjusted to a risk rate, and compared to a risk free investment (Gov't Bond)

Here's a question I have. How often are stocks valued under their book value? I found an investment I like, and currently their book value (assets - Liabilities) is greater than the share price times the stock float.

[Rav4Guy]

Originally posted by Toma
Well..... staying away from spec garbage... my Wrigleys (yes, the gum) options made me 182% this morning in about 2 hours ;)

Now I can go to SEMA ;)

you a buyer/seller? call/put? which brokerage do you use?

[Toma]

Originally posted by Rav4Guy


you a buyer/seller? call/put? which brokerage do you use?
Questrade. Most always use some sort of spread, straddle etc...

[Mckenzie]

ASX is moving nicely this morning. I think everyone should have a uranium junior in their portfolio that is near producing in the next couple of years after what happened at Cigar Lake. This mine was expected to produce over 18 million pounds of uranium a year when it came on line- who do you think will fill the gap? Answer- current or future producers.

Here is an article that should be read.

My picks right now are ASX (rumoured to being looked at by Cameco- probably thinking a lot more serious after this weekends events) and URA (should be drilling old uranium claims soon).
Thestreet.com "Beginning of a mega-boom"

Canadian Flood Isn't Gonna Sink the Uranium Bulls
By Sean Brodrick
Special to TheStreet.com
10/25/2006 9:35 AM EDT
URL: http://www.thestreet.com/markets/metals/10317328.html

Editor's Note: The following is a guest column by Sean Brodrick, an editor at Weiss Research. The views expressed in this article are his own. TheStreet.com accepts unsolicited manuscripts but will respond only to those it considers publishing. If you would like to submit a column for consideration, please email [email protected].


The uranium industry was rocked this week by news that Cameco (CCJ) , the world's biggest uranium producer, suffered a disastrous flood at its Cigar Lake mine.

Cigar Lake was supposed to go into production in 2008 and produce as much as 18 million pounds of uranium a year; 18 million pounds -- that's more than a tenth of last year's total global demand of 171 million pounds. In 2008, uranium demand was already expected to exceed supply by 25 million pounds. With Cigar Lake out of commission, that gap will be 32 million pounds -- an increase of 30%.

"Losing Cigar Lake in the uranium world is like the oil market having to deal with the loss of Saudi Arabia," says Kevin Brambrough of Sprott Asset Management.

I agree. So as an investor, what should you do now?

Don't buy Cameco. What looked like an undervalued company last week now looks like an underwater disaster. While Cameco hopes to bring Cigar Lake back on line by 2009, there could be other problems ready to surface. For now, stay away. It looks cheap, but it could get cheaper.

Buy other near-term producers. The flooding of the Cigar Lake mine is a boon to uranium prices and uranium stocks, especially stocks of companies that are already producing or will bring mines on line in the next couple years. For companies such as BHP Billiton (BHP) , the big bull market is just starting.

Uranium has been on a rocket ride -- up over 270% in the past two years alone. Have you missed the boat? Heck no! I believe we're at the beginning of a mega-boom, one that will be fueled by white-hot demand for uranium in China, India, Russia and many other energy-dependent countries.

On a historical basis, uranium is still quite cheap. In 1978, uranium topped out at $43.40 per pound. Adjusted for inflation, that's around $145 per pound in today's dollars.

Recently, uranium traded at $56 per pound. It could more than double in price and still not surpass its old highs on an inflation-adjusted basis. I believe uranium will hit at least $70 per pound by the end of 2007 -- a 32% rise from present prices. And that could be a conservative estimate.

Outside of Cameco, there are longer-term forces driving uranium prices, including:

A Supply/Demand Squeeze: The flooding of Cigar Lake puts an even bigger squeeze on an already-tight supply picture. Production from world uranium mines now supplies only 62% of power utilities' requirements. About a third of annual demand for uranium is met by Russia's highly enriched uranium weapons de-commissioning -- a program that is going to end in seven years. Utilities and other users are scrambling now to fill future demand.

Global Warming: An operating nuclear power plant produces zero greenhouse gases. Compare that to your average coal plant, which can spew 3.7 million tons of carbon dioxide (a greenhouse gas) into the air every year, along with hundreds of tons of heavy-metal laden ash.

Economics: Despite the rising price of uranium, nuclear power is getting cheaper, thank to standardization in power plant construction. The cost of uranium is a much smaller part of the cost of a nuclear power plant than the cost of natural gas is of a natural gas-fired power plant. And while natural gas prices have dropped in the short-term, their long-term trend should be much higher.

Building Boom: There are 28 new plants under construction. Asia is especially hot for nuclear power, with 18 being built and another 77 are planned or proposed.

China, India and other countries realize they can't meet their growing energy needs through fossil fuels alone and are embarking on very ambitious nuclear programs. China is adding two nuclear power plants per year until 2020, effectively planning to double the percentage of electricity it gets from nuclear power.

Even Russia, the "Saudi Arabia of natural gas," realizes that gas won't last forever ... or even much longer.

That's why Russian President Vladimir Putin has targeted nuclear power's share of Russia's energy use to increase to 25% by 2030 vs. 15% currently. To get from here to there, Russia needs to add 40 gigawatts (40,000 megawatts) of nuclear energy each and every year -- building at least 42 new nuclear reactors and perhaps as many as 58.

But don't worry about hundreds of new Chernobyls. The current generation of nuclear power plants is also much safer than the old models -- with mechanisms that automatically shut the reactor down in the event of a problem.
Build Your Own Atomic Portfolio

BHP Billiton is an Australian miner of all types of metals, and one of its properties is the Olympic Dam mine. That's one of the biggest uranium deposits -- 40% of the world's known resources. And aggressive drilling recently upgraded the ore body by more than 11%, adding 188,000 metric tonnes of uranium.

BHP's uranium production from Olympic Dam is being delivered under contracts that are good at least until 2008 -- contracts that still price uranium in the mid-teens (U.S. dollars). With each month that passes, however, old uranium contracts are coming up for renewal. And that's when uranium producers will really start to reap the rewards of price increases that have already occurred.

BHP is a fine company and should reap plenty of profits in the bull market for all metals, not just uranium. Indeed, it currently gets more revenue from copper at Olympic Dam than it does uranium.

An even better choice might be Energy Resources of Australia, which operates Australia's Ranger Mine and supplies about 12% of the world's uranium production. Its stock, which trades on the Australian Stock Exchange and the Pink Sheets here under the symbol EGRAF, has been on fire lately, but I believe it could go much higher.

There are many fine small-cap uranium stocks trading on Canadian exchanges. For a list of Canadian uranium stocks by market cap, click here. Just remember, the general rule is, the smaller a stock, the more risky it can be.

You could also buy a mutual fund or ETF that holds uranium. There are few of those, though, and none are listed primarily on U.S. exchanges (yet). I believe there will eventually be a U.S.-based uranium ETF, and it will be a major driver in the markets.

As of today, my choice is Uranium Participation Corp., a Canadian fund that buys physical uranium. It's very similar to the way that the streetTRACKS Gold (GLD) gives investors a stake in gold.

The Uranium Participation Corp. trades on the Toronto Exchange under ticker symbol U. In the U.S., the symbol is URPTF on the Pink Sheets.

Do your due diligence, and you can find some great companies. The big uranium bull market has a long way to go, and the sooner you start, the bigger your profit potential.

[RX_EVOLV]

I agree Uranium seems to be a pretty good place especially w/ the Cameco disaster. Already have URA and ASX in my portfolio and currently looking to potential jr. uranium companies to invest.

[liquid1010]

My darkhorse has moved a ton over the past few days. GCE has started to move, and will continue to move. It is under book value, and is starting to turn its revenue around.

[Z_Fan]

PLE on the move today.

I hate that stock so much!

It went from .82 to .88 in like 5 minutes.

Gayness.

[benyl]

yup, really gay... cause I have been out for over 1 month.

[Z_Fan]

I just sold mine at .82 and my stocks sat on the market for a LONG time before they sold at .82 (like a long time today) and then BOOM, as soon as my shit is gone it's at .88.

Muthafawka.

[Z_Fan]

PTU doing well today too.

I'm selling mine. :poosie:

[benyl]

PTU is finally back where I bought it at... I am tempted to sell as well!

If it goes to $0.60 tomorrow, I am out. It was supposed to be a day trade. I think I have been holding almost 9 months now... haha

[Z_Fan]

Originally posted by benyl
PTU is finally back where I bought it at... I am tempted to sell as well!

If it goes to $0.60 tomorrow, I am out. It was supposed to be a day trade. I think I have been holding almost 9 months now... haha

I bought mine in the thirties, so I'm good on this one. But my shares didn't sell ... and the FUNNY thing, I was gonna buy a whack of shares this morning from the proceeds of my PLE. But I didn't, and then (of course) PTU went way up. LOL. That would have been a sweet daytrade, but, nadda cuz I have no luck.

[troyl]

Originally posted by RX_EVOLV
I agree Uranium seems to be a pretty good place especially w/ the Cameco disaster. Already have URA and ASX in my portfolio and currently looking to potential jr. uranium companies to invest.

Check out PTU! Big move today. Results expected by month end.

We can thank DjayZ!!!

[Mckenzie]

Great green day for me-

URA jumped 25% today.

PLE up huge too....made a couple Gs at .85c and still have some holdings for when the drill results

ASX is getting ready to lift-off. Assay results are rumoured to be there next week!

Patience is a virtue and it has payed off.

[djayz]

i sold out of PLE a long time ago and was waiting for another entry point but as usual its gone up..ohh well

and ptu sell :eek: are you crazy this is only the beginning i think i might buy more with my energy fund i just sold.

[Canmorite]

PLE was under heavy short selling, but with this recent jump those guys might have to cover at a loss, sending the price even higher.

[djayz]

Originally posted by Canmorite
PLE was under heavy short selling, but with this recent jump those guys might have to cover at a loss, sending the price even higher.

:banghead: damn it and i missed the ferry hah

[wtb]

i dunno about SIRIUS, ive been holding 1000 shares for the past year, not that much movement, im getting tired of waiting haha, i think im gonna pull out soon

[Canmorite]

Originally posted by wtb
i dunno about SIRIUS, ive been holding 1000 shares for the past year, not that much movement, im getting tired of waiting haha, i think im gonna pull out soon

SIRI looks like a lost cause. It will probably go lower before it goes up.

[fiveabi]

yo guys check out gbdx for monday-wed.

its a new diamond wholesaler, opening its office for the first time on wednesday. I bought in at 0.019, looks like its still a good time to buy, expect atleast 0.05 by wed. They also "may" have links to alrosa, russias largest exporter of diamonds, who supplies 20% of the worlds diamonds.
Either way its diamond season with christmas comming up so this has one way to go, and that is up.

[benyl]

Do not buy GDBX monday morning. It will likely gap up. Wait till later in the day for the pull back to get in cheaper. This is a longer term hold and not a flipper... as always, do your own DD.

[fiveabi]

It will gap, will return to ~0.03, but remember and keep in mind that on wed it will show a huge gap up, and we will have to see what happens?

[wtb]

sorry, whats happening on wednesday with GBDX?

[Z_Fan]

I'm wondering about SKE.

Good thing I didn't buy 15000 shares on Friday. LOL. I was going to and changed my mind. :poosie:

[djayz]

BLE FTW! :clap:
and DEN WOOT!

another good uranium junior is CVV they had a great day today but once it dips down it would be a good buying opportunity.

anyone still holding PLE?...wtf is going its going back up to the dollar range again :banghead:

[Mckenzie]

Still holding PLE...great day there. It looks like investors were not impressed with SKEs results and they threw their money at PLE.

URA had another great day!!

ASX results around the corner too.

Also, Uranium mining special Nov. 4th on global TV featuring a small bit on ASX....should be some great publicity there.

[Canmorite]

Ouch for SKE...

PLE looks like it might get stuck here or at $1.00..:dunno:

[wtb]

i bailed out of ske today....i should have on friday, WTF WAS I THINKING

[EG STyLeZ]

Got out of SKE last friday, jumped back in on monday. Guess the first set of drill results weren't quite as good as some people wanted. the second set, which could come in the next 3-4 weeks or something, will probably be better.

[natejj]

I missed out on the PLE train once again.... maybe next time.

Picked up some OCL on thursday.... hopefully this thing gets moving.

[RX_EVOLV]

picked up some more ASX and SKE today with the pull back. The 2nd set of SKE result should be alot better ( not that the first one was thattt bad, people have too high expectations).

the PLE NR shows how far they are from actually drilling, lots of time to jump in and out. If it bounce back up to ~ $1 I'm going to sell some, if it goes back to ~ 70cents Im going to stock up, either way cant lose!

[Mckenzie]

Huge news releases for ASX and PLE today.

Confirmation of Alunite in the Bolsa zone and more high grade samples.

And now I have no doubt about ASX now...re-checking assay results because the numbers were too high!!

Although it was not what the market wanted, it defenitely gives me confidence that the team there is doing everything by the book and that they do have goods that are good enough to re-check before releasing to the public.

[Altezza]

Flaherty just gave most Canadians a big kick in the ass earlier this evening. Tomorrow is not going to be a pretty day.

[Z_Fan]

^ Yup. Agreed. Will be interesting and I'm glad I didn't buy anything today.

http://news.sympatico.msn.ctv.ca/TopStories/ContentPosting.aspx?newsitemid=CTVNews%2f20061031%2fincome_trusts_061031&feedname=CTV-TOPSTORIES_V2&showbyline=True

[benyl]

That isn't a kick in the ass, it is a kick in the balls.

I have one income trust that is about 30% of my holdings... I guess that stock is going to shit the bed some more...

[djayz]

its not just a kick in the balls either is a kicked and twist in the balls.
same here benyl i have two income trusts that are about 25% of my portfolio and its not going to be pretty. :thumbsdow to flaherty and the fucking greedy ass government

[Gainsbarre]

http://www.globeinvestor.com/servlet/story/RTGAM.20061101.wstocks1101/GIStory/

Fuck! And it looks like one of my biggest holdings (TELUS) is going to open around the $50 mark, more than 20% down from yesterday's close.

[sputnik]

I think in light of this new income trust BS, I am going to have to buy a lottery ticket today.

[Si_FlyGuy]

That's pretty gutsy of the Tories to go back on their campaign promise, along with their income tax increase from July.

[sputnik]

The TSX is down 310 points already.

:(

[benyl]

Nice, my income trust is down 5% already.

[Si_FlyGuy]

My stock options are now completely worthless.:banghead: I hope they compensate by raising bonuses.

[liquid1010]

Perhaps I'm in the minority here... but this may be a good thing. Then again, I'm not holding any trusts in my Portfolio, although it's taking a beating anyways.

[TimG]

so what was so special about income trusts and what did they do to kill them?

[B17a]

You guys should be buying now! The market has panicked and dumped off hugely! Now of course that's easier said than done, but if you've got the balls for it, I'd load up.

[B17a]

Income trusts were "special" because trusts were able to pass on their income to unit holders (the investors) and therefore paid no taxes. That meant the gov't was missing out on big time tax revenue. So now the gov't has slapped a 34% tax on trusts eliminating this advantage.

[liquid1010]

The problem is, I don't see the notion of a trust being anywhere near as advantageous now that it's taxed. I wonder if the "trust" will not fall out of favour in the coming months now that they are taxable. All it is now, is a stock with a large dividend.

[B17a]

You're right, there is no advantage now between trusts and companies paying dividends, its still after-tax dollars.

[Altezza]

The drop represented a loss of about C$24 billion ($21.4 billion) in market value for the income trusts, and about C$28.6 billion including BCE and Telus's losses.


What a nice flush down the toilet....

[sputnik]

Originally posted by B17a
You guys should be buying now! The market has panicked and dumped off hugely! Now of course that's easier said than done, but if you've got the balls for it, I'd load up.

You have no idea what you are talking about, do you?

The announcement of taxation will basically keep ALL income trusts trading at 20-25% BELOW their previous levels (based on a 31.5% taxation rate). Foreign ownership is of income trusts is also around 40%. This will also be dumped along with any holdings in pension and mutual funds.

The whole income trust structure will be broken and is no longer a tax advantage whatsoever.

The only thing that you can hope for is that the legislation gets changed before 2011. However that is unlikely to happen since ALL of the political parties support the removal of the income trust tax shelter.

[sputnik]

Originally posted by Altezza
What a nice flush down the toilet....

It was to be expected. The fact that they announced the possibility of turning into an income trust inflated their stock price and it has now just gone back to where it should be as a non income trust entity.

[B17a]

Originally posted by sputnik


You have no idea what you are talking about, do you?

The announcement of taxation will basically keep ALL income trusts trading at 20-25% BELOW their previous levels (based on a 31.5% taxation rate). Foreign ownership is of income trusts is also around 40%. This will also be dumped along with any holdings in pension and mutual funds.

The whole income trust structure will be broken and is no longer a tax advantage whatsoever.

The only thing that you can hope for is that the legislation gets changed before 2011. However that is unlikely to happen since ALL of the political parties support the removal of the income trust tax shelter.

Actually I do. Take a look at the enterprise values of these companies now that they've been beat up and tell me they don't look attractive, either as a trust or back in a "corporate" structure". I don't think you're going to see foreign owenrship dumping this madly, where are they going to invest? At the end of the day, the fundamentals of the companies who are trusts haven't changed.

[sputnik]

Originally posted by B17a
Actually I do. Take a look at the enterprise values of these companies now that they've been beat up and tell me they don't look attractive, either as a trust or back in a "corporate" structure". I don't think you're going to see foreign owenrship dumping this madly, where are they going to invest? At the end of the day, the fundamentals of the companies who are trusts haven't changed.

Sure once everything drops 20-25% they will probably be more in line with what they are worth as a corporation.

Unfortunately these companies are setup in a way in which they need to continually spend money. The energy trusts have over bid on a number of wells and land in the past because they had no choice but to spend spend spend. As a result it has inflated the entire industry.

This wont be just a simple "oh well, now we are a company". There is some MAJOR restructering required for a number of these trusts to become viable and profitable companies. I can imagine that there are going to be some pretty interesting Directors meetings happening throughout the trusts this week.

Here is what RBC Capital Markets has to say about yesterdays announcement.



November 1, 2006

Last night, The Honourable Jim Flaherty, Minister of Finance announced simple, but dramatic changes to the Trust Sector. Effectively, in 2011, trusts will be taxed like corporations. Certain REITs appear to be saved from the wrath. Any new trusts (post October 2006) would be taxed in 2007.

• Potential Market Impact

20% - 25% Significant – Trust market values could be off as much as 20% today, maybe more as time passes. For a market capitalization in the sector of $200 billion REITs excepted), this could be as much as $40 billion. Consider that the “lost tax” was estimated at $500 million, or looked at another way investors would be losing $80 of market value for each $1 of tax lost.

• Now Corporations With a Four-Year Tax Holiday

To better understand the potential impact, assume that Trusts are now taxable corporations that have a four-year tax holiday. Think corporate values plus the present value of the tax holiday.

• Value Compression

Whereas trusts received a value bump on trust conversion, that value bump will be ground out.

• To Fight the Proposal: Five Bell Alarm

Those looking to fight the proposed changes will need to get into high gear immediately. There will be no time to waste; the Federal Government’s resolve appears firm.

• Who Gets Whacked: Market Values

Everyone.

• Who Gets Whacked: Income After Tax

This will vary significantly.

After-tax, Canadian Taxable Investors are not affected, but we believe they will not feel that they have been spared the rod. Canadian Tax-Deferred Investors and Foreign Investors will feel a 31.5% tax bite on the taxable portion of cash distributions. All effective 2011.

• Will Unit Values be Whacked Equally?

No. But the valuation issues are complex. Debt becomes tax-deductible, but highly levered trusts may feel more pain. High payout ratio trusts may feel more pain. Trusts with high taxability of distributions may feel more pain. Trusts with small market caps may feel more pain. Trusts with less internal tax shield may feel more pain. The burn ward will have many victims.

• How This Might Be Stopped From a Procedural Standpoint

There are two avenues by which the measures announced in yesterday’s Tax Fairness Plan may not be enacted from a procedural standpoint: 1) the Bill(s) introduced to enact these measures into Law are voted down in the House of Commons; or 2) the government succumbs to intense political pressure from lobby groups and decides not to introduce the legislation in the House. We view both cases as unlikely and we expect these measures to be passed into Law.

• Torching Their Own House

Canadian trusts could find themselves at the mercy of opportunistic private equity funds, hedge funds and foreign corporations. Let us be clear on one thing: to many the next few weeks or months may provide an opportunity, perhaps of a lifetime, to acquire great Canadian businesses at potential fire-sale prices. In particular, Canadian Oil & Gas Trusts, some with incredible assets, could find themselves very, very vulnerable. The Federal Government could later be wondering, “What happened?”, after they effectively torched their own house.

[B17a]

No shit! Some of these companies might actually have to reinvest money into their companies, who'd have thunk!?:D

[sputnik]

Originally posted by B17a
No shit! Some of these companies might actually have to reinvest money into their companies, who'd have thunk!?:D

Then what makes them worth buying right now?

I would rather invest my money in a company that isnt going to be going through a major corporate overhaul over the next 4 years. Who knows.

[B17a]

Well, many trusts are still sound businesses that require minimal capex ongoing. But there are some that just baffle me.

[jmc]

Originally posted by sputnik


You have no idea what you are talking about, do you?

The announcement of taxation will basically keep ALL income trusts trading at 20-25% BELOW their previous levels (based on a 31.5% taxation rate). Foreign ownership is of income trusts is also around 40%. This will also be dumped along with any holdings in pension and mutual funds.

The whole income trust structure will be broken and is no longer a tax advantage whatsoever.

The only thing that you can hope for is that the legislation gets changed before 2011. However that is unlikely to happen since ALL of the political parties support the removal of the income trust tax shelter.
The whole problem is the tax system. I wish the government will just get rid of the double dipping-tax system. It's just 'seem' so unfair to first tax the corporation, then again re-tax the people getting the payout from the company. Just tax the company once, and leave the dividends, etc.

'Interim Liberal Leader Bill Graham called the move a flip-flop.
"All I can remember is that during the election, Mr. Flaherty and the prime minister said under no condition would they touch income trusts," he said.'

The Liberal is right, becasue of that 'Conservative campaign promise to avoid taxing trusts', I over-weighted trusts in my holdings. It's one thing to change the rules for new trusts, it's another to apply the rule to exisiting ones in a few years; that move just crushed me. I am holding out hope the tax system will some how get changed after the next election (however unlikely); if not, it'll take many many years for me to recover... This time is personal, I'll remember this, conservative will never get my vote!

[Canmorite]

Ouch. DIA and QQQQ looking to pullback soon as well.

PLE breaking it's upward trendline...

[Ben]

Well that was a rough day, red all the way down the portfolio save one. just shy of 5 figure losses.

Such is life. Should bounce back after this overreaction. Bad move on the part of the Conservatives tho. Seeing as how I recall most of their campaign being based on "False promisses and lies"

[Rav4Guy]

It was a proposal to change the taxation of income trust companies... it hasn't been passed yet. Plus... it'll be 4 years anyways.

What we'll see is a 15% correction in most trusts... but this initial sell off are from investors whom overreact. Income trusts now yield upwards of 20%.. for example Daylight.

[djayz]

so what your saying is this is a gift from god and a great time to buy income trusts?

[KLCC]

I say wait and see, the market will try to correct itself during the next couple days....:banghead: