I like your book review, and would like to add my $0.02.
Jackass Investing is worth taking the time to read. I enjoyed how Mike Dever challenged the status quo, and provided excellent research and apt anecdotal stories.
If you are tired about reading about the same theories, then try this for a change - many of the standard "truths" are treated as myths. Myth #13 (It’s Best to Follow Expert Advice) and Myth #15 (The Largest Investors Hold All the Cards) were my favourites.
Frankly, I do not agree with everything in the book, but perhaps it is the reason I found it interesting.
Analyzing Canadian REITs, Part X: Highest Yields And Lowest Risks [View article]
Hi Chubby,
BPO is co-listed on the TSX and NYSE. Most of the assets are in the USA and Australia, The company (and its parent Brookfield Asset Management - BAM) is domiciled in Canada.
I am not an expert in this area, however, I can share with you my experience. I held BPO in a Canadian account, and my dividend was denominated in CAD. I held Brookfield Infrastructure - BIP (another Brookfield subsidiary) - in a US account, and the yield was in USD.
The dividend info on their website (http://bit.ly/xBxvTb) stated that for 2011: "U.S. Residents: Common share distributions paid to U.S. shareholders should be treated as a return of capital. Distributions on preferred shares should be treated as fully taxable." Below this, they identified the exchange rates used, and a consistent listing of the $0.14/fiscal-quarter payment for the shares listed on the NYSE. Therefore, I conclude that they distribute in USD to NYSE shareholders.
Although I admit to a certain bias (I am Canadian), I view the Canadian Dollar (CAD) as a "safer" currency than the USD. We have not had "quantative easings", and our relative debt and deficits are lower than those being run by the U.S. My strategy differs from yours as I actively seek to diversify into CAD, USD, AUD, and (unfortunately some) Euro, denominated securities, and deliberately do not hedge the currency risks.
For disclosure purposes, I hold BAM and BPO preferred shares. I previously held other BAM related securities, and may buy them again. I hope that you find this helpful. Perhaps some other readers can provide more specific feedback?
Analyzing Canadian REITs, Part XI - Alphabetic Listing Of All Canadian Real Estate Companies [View instapost]
Hi,
Thanks for your positive feedback and suggestions.
Although I recognize the validity of recategorizing BTB REIT, it would create "referential integrity" issues between this table and the cross-referenced articles. Therefore, I ask that you accept a few inconsistencies... There are others - another reader had suggested that Medical Facilities Corp not be considered a real estate investment. Clearly, some of the categorization is open for negotiation :)
I cannot believe the price levels that Canadian real estate, and Canadian real estate securities have attained. Although my approach is to treat this part of my portfolio as a "HOLD", I have sold much of my Canadian Bank position, as I believe that both sectors have the same return drivers (and the banks pay a lower yield). Again, please be as careful when you buy, as what you buy. Just my $0.02...
Analyzing Canadian REITs, Part V: Retail [View article]
Hi income hunter,
Thanks for your interest.
I had a pretty broad definition of "real estate companies", but Parkland did not make the cut - their propane retail business makes them a high-yield Canadian retailer, but the value of their security appeared to be driven by non-real estate factors. I do not have a position in this security, but some of my friends do.
Analyzing Canadian REITs, Part VIII: Brookfield Asset Management And Real Estate Funds [View article]
Hi,
Thanks for your feedback. I appreciate your interest.
I wrote the article, this week, but the most recent analysis and commentary was the CIBC report from December 19, 2011. Unfortunately, the italics did not come through, but this information was a quotation. I have also been trying to consistently use Q3/2011 data across the series of articles to maintain consistency - I did mention this, but I believe that this was back in Part I. Also, for BAM, I used Canadian (TSX) pricing (as with the tables in the other articles), but neglected to mention this - good catch!
Dividend Stocks: Which Way To Go - Blue Chips Or High Yield? [View article]
Thanks, John. This is a brilliant article!
I would be interested to learn about your perspective on how you manage your asset allocation to address risk. This was one of my statements, but I am looking for alternatives:
"Each mid / small-cap security should represent an average of 1% – 2% of your portfolio... Smaller capitalizations do present greater risk of insolvency, and this is the reason to invest in “bite-sized” chunks. Investing 10% of your portfolio in AT&T, with its $172B market capitalization, has a different risk profile than investing in Atlantic Power (AT), with under $1B market cap. This is why one should spread the investment risk across more securities." (http://seekingalpha.co...)
I have holdings of each investment class in your article (but different securities), and am trying to decide in which areas to add exposure.
BP Prudhoe Bay Royalty Trust: Why Worry About This High Yielder? [View article]
I am among the few who do not like the US royalty trust model. This excerpt from an article explains my position (http://seekingalpha.co...):
US Royalty Trusts and any other investment vehicle which extinguish the asset with their distributions qualify for a “sell” rating. The high yield is tempting, but you are simply getting back your own money. Lacking a means to reinvest and build their business, all of them will (eventually) reach a zero-value. I would like to get my money back from my investments, so this is a non-starter. Let’s look at an example. Back in January, 2011, there were fantastic articles about the value of BP Prudhoe Bay Royalty Trust (BPT) - BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All (http://seekingalpha.co... ) and BP Prudhoe Bay Royalty Trust: Most Overvalued or Most Misunderstood? (Part I) (http://seekingalpha.co... ) and (Part 2) (http://seekingalpha.co... ). The two authors did brilliant work examining the return and assumptions around this royalty trust, and the many comments from the readers added to our understanding. Regardless of the financial models and exact calculations, the conclusions were consistent – this royalty trust was overvalued relatively to the expected return over its lifetime. If this would be common shares, with the ability to invest and build the business (and sustain the payout), perhaps it would be an attractive investment; however, with the depleting asset, the yield is only the return OF (not return ON) your invested capital, with the hope of timing the market for the right exit point before the asset value equals zero.
I own many Canadian REITs (including Riocan), and am in the midst of a series of articles identifying Canadian real estate investment opportunities (if you are interested, the link to the article which mentions Riocan is: http://seekingalpha.co...).
I believe that it is worthwhile to mention 2 caveats regarding your list: 1. Canadian real estate, and related securities, are currently at highs, and various government and industry leaders are warning that there may be a correction. 2. Cominar has offered to buy Canmarc REIT (formerly Homburg REIT), which may be either good or bad for performance in 2012. This may disqualify it as 1 of the 4 best Canadian REITs. My $0.02 is that Calloway, Canadian Apartments, Chartwell, Killam (I am long the latter 3) and some others, may provide a better balance of risk and return in the top 4. Of course, it depends on one's definition of "top" :)
Your Canadian Dividend Stocks website is a great resource!
Analyzing Canadian REITs, Part VI: Hospitality, Hotel And Leisure [View article]
Hi hat_trick3, Good idea to leave this one alone. I am also long (and break-even) on Rogers Sugar and Canexus. Although I own the larger Canadian Banks (BNS, CM, BMO), I suggest that there is a lot more growth in Canadian Western. I like your Liquour Stores investment, but it has not dropped to a price for me to buy-in. Frankly, at this juncture, I am just watching for potential investments - I rarely buy within 20% of the 52-week high. Cheers, Monty
Analyzing Canadian REITs, Part VI: Hospitality, Hotel And Leisure [View article]
Hi Hat_trick3,
I have no positions in this real estate sector, as I am not overly optimistic. Also, I propose that none of these would qualify for "blue chips" - all seem to have declining financial results and returns. InnVest may be a better choice among this group of securities, but I would not define this a high-quality/low-risk. Hotels depend upon business activity and vacationers. My read of the situation is that in tough times, businesses cut travel budgets, and people do not vacation when they are indebted and feel insecure about their future cash-flow..
Lanesborough has not had a positive Operating Income in the last 5 years. Moreover, they have restated their financials for most of this period. They are selling their properties to compensate for decreasing cashflows (check out their press release: http://bit.ly/zeJ037). There are covenant breaches on their mortgages. In 2011, they extended the maturity of their debt for 4 years at an additional 2% premium (over the previous 7.5%). In other words, I suggest that their distribution may be at risk, as their financial position is not strong.
Analyzing Canadian REITs, Part IV: Residential [View article]
Hi Howard,
Great point! I was looking at how non-Canadians can buy (through a discount broker) the Canadian TSX/S&P real estate indices, real estate ETFs, and CEFs on US exchanges. I drew a blank - nothing OTC or on the usual exchanges.
One of the next articles will be devoted to the various funds, but it seems that non-Canadians must use a full-service broker (and possibly pay significant fees).
That said, you have some great researching talent, and may come up with something for all of us!
Analyzing Canadian REITs, Part II: Diversified Office, Retail, And Industrial [View article]
Hi,
Thanks for your comments! If it makes you feel any better, Canadians are subject to similar withholding taxes with US investments, and our tax-sheltered retirement plans.
Book Review: Jackass Investing [View article]
I like your book review, and would like to add my $0.02.
Jackass Investing is worth taking the time to read. I enjoyed how Mike Dever challenged the status quo, and provided excellent research and apt anecdotal stories.
If you are tired about reading about the same theories, then try this for a change - many of the standard "truths" are treated as myths. Myth #13 (It’s Best to Follow Expert Advice) and Myth #15 (The Largest Investors Hold All the Cards) were my favourites.
Frankly, I do not agree with everything in the book, but perhaps it is the reason I found it interesting.
Analyzing Canadian REITs, Part X: Highest Yields And Lowest Risks [View article]
BPO is co-listed on the TSX and NYSE. Most of the assets are in the USA and Australia, The company (and its parent Brookfield Asset Management - BAM) is domiciled in Canada.
I am not an expert in this area, however, I can share with you my experience. I held BPO in a Canadian account, and my dividend was denominated in CAD. I held Brookfield Infrastructure - BIP (another Brookfield subsidiary) - in a US account, and the yield was in USD.
The dividend info on their website (http://bit.ly/xBxvTb) stated that for 2011: "U.S. Residents: Common share distributions paid to U.S. shareholders should be treated as a return of capital. Distributions on preferred shares should be treated as fully taxable." Below this, they identified the exchange rates used, and a consistent listing of the $0.14/fiscal-quarter payment for the shares listed on the NYSE. Therefore, I conclude that they distribute in USD to NYSE shareholders.
Although I admit to a certain bias (I am Canadian), I view the Canadian Dollar (CAD) as a "safer" currency than the USD. We have not had "quantative easings", and our relative debt and deficits are lower than those being run by the U.S. My strategy differs from yours as I actively seek to diversify into CAD, USD, AUD, and (unfortunately some) Euro, denominated securities, and deliberately do not hedge the currency risks.
For disclosure purposes, I hold BAM and BPO preferred shares. I previously held other BAM related securities, and may buy them again. I hope that you find this helpful. Perhaps some other readers can provide more specific feedback?
Cheers, Monty
Analyzing Canadian REITs, Part X: Highest Yields And Lowest Risks [View article]
Analyzing Canadian REITs, Part XI - Alphabetic Listing Of All Canadian Real Estate Companies [View instapost]
Thanks for your positive feedback and suggestions.
Although I recognize the validity of recategorizing BTB REIT, it would create "referential integrity" issues between this table and the cross-referenced articles. Therefore, I ask that you accept a few inconsistencies... There are others - another reader had suggested that Medical Facilities Corp not be considered a real estate investment. Clearly, some of the categorization is open for negotiation :)
I cannot believe the price levels that Canadian real estate, and Canadian real estate securities have attained. Although my approach is to treat this part of my portfolio as a "HOLD", I have sold much of my Canadian Bank position, as I believe that both sectors have the same return drivers (and the banks pay a lower yield). Again, please be as careful when you buy, as what you buy. Just my $0.02...
Preferred Stock Primer: Nextera Energy Case Study [View article]
Fantastic article! Bruce CM referred to the most amazing tracking spreadsheet from LordXot. You can find it at:
http://bit.ly/z86ZOq
He also comments extensively on InvestorVillage - here is a sample: http://bit.ly/ybQcvw
Cheers, Monty
Analyzing Canadian REITs, Part IX: Real Estate Development Companies, Mortgage Corporations, And Brokers [View article]
Thanks so much for your kind words! I appreciate it. "Stay tuned" for the final installment...
Cheers, Monty
Analyzing Canadian REITs, Part V: Retail [View article]
Thanks for your interest.
I had a pretty broad definition of "real estate companies", but Parkland did not make the cut - their propane retail business makes them a high-yield Canadian retailer, but the value of their security appeared to be driven by non-real estate factors. I do not have a position in this security, but some of my friends do.
Cheers, Monty
Analyzing Canadian REITs, Part VIII: Brookfield Asset Management And Real Estate Funds [View article]
Thanks for your feedback. I appreciate your interest.
I wrote the article, this week, but the most recent analysis and commentary was the CIBC report from December 19, 2011. Unfortunately, the italics did not come through, but this information was a quotation. I have also been trying to consistently use Q3/2011 data across the series of articles to maintain consistency - I did mention this, but I believe that this was back in Part I. Also, for BAM, I used Canadian (TSX) pricing (as with the tables in the other articles), but neglected to mention this - good catch!
Cheers, Monty
Dividend Stocks: Which Way To Go - Blue Chips Or High Yield? [View article]
I would be interested to learn about your perspective on how you manage your asset allocation to address risk. This was one of my statements, but I am looking for alternatives:
"Each mid / small-cap security should represent an average of 1% – 2% of your portfolio... Smaller capitalizations do present greater risk of insolvency, and this is the reason to invest in “bite-sized” chunks. Investing 10% of your portfolio in AT&T, with its $172B market capitalization, has a different risk profile than investing in Atlantic Power (AT), with under $1B market cap. This is why one should spread the investment risk across more securities."
(http://seekingalpha.co...)
I have holdings of each investment class in your article (but different securities), and am trying to decide in which areas to add exposure.
Thanks, Monty
BP Prudhoe Bay Royalty Trust: Why Worry About This High Yielder? [View article]
US Royalty Trusts and any other investment vehicle which extinguish the asset with their distributions qualify for a “sell” rating. The high yield is tempting, but you are simply getting back your own money. Lacking a means to reinvest and build their business, all of them will (eventually) reach a zero-value. I would like to get my money back from my investments, so this is a non-starter. Let’s look at an example. Back in January, 2011, there were fantastic articles about the value of BP Prudhoe Bay Royalty Trust (BPT) - BP Prudhoe Bay Royalty Trust: The Most Overvalued Trust of All (http://seekingalpha.co... ) and BP Prudhoe Bay Royalty Trust: Most Overvalued or Most Misunderstood? (Part I) (http://seekingalpha.co... ) and (Part 2) (http://seekingalpha.co... ). The two authors did brilliant work examining the return and assumptions around this royalty trust, and the many comments from the readers added to our understanding. Regardless of the financial models and exact calculations, the conclusions were consistent – this royalty trust was overvalued relatively to the expected return over its lifetime. If this would be common shares, with the ability to invest and build the business (and sustain the payout), perhaps it would be an attractive investment; however, with the depleting asset, the yield is only the return OF (not return ON) your invested capital, with the hope of timing the market for the right exit point before the asset value equals zero.
4 Best Canadian REITs For 2012 [View article]
I own many Canadian REITs (including Riocan), and am in the midst of a series of articles identifying Canadian real estate investment opportunities (if you are interested, the link to the article which mentions Riocan is: http://seekingalpha.co...).
I believe that it is worthwhile to mention 2 caveats regarding your list:
1. Canadian real estate, and related securities, are currently at highs, and various government and industry leaders are warning that there may be a correction.
2. Cominar has offered to buy Canmarc REIT (formerly Homburg REIT), which may be either good or bad for performance in 2012. This may disqualify it as 1 of the 4 best Canadian REITs. My $0.02 is that Calloway, Canadian Apartments, Chartwell, Killam (I am long the latter 3) and some others, may provide a better balance of risk and return in the top 4. Of course, it depends on one's definition of "top" :)
Your Canadian Dividend Stocks website is a great resource!
Cheers, Monty
Analyzing Canadian REITs, Part VI: Hospitality, Hotel And Leisure [View article]
Analyzing Canadian REITs, Part VI: Hospitality, Hotel And Leisure [View article]
I have no positions in this real estate sector, as I am not overly optimistic. Also, I propose that none of these would qualify for "blue chips" - all seem to have declining financial results and returns. InnVest may be a better choice among this group of securities, but I would not define this a high-quality/low-risk. Hotels depend upon business activity and vacationers. My read of the situation is that in tough times, businesses cut travel budgets, and people do not vacation when they are indebted and feel insecure about their future cash-flow..
Lanesborough has not had a positive Operating Income in the last 5 years. Moreover, they have restated their financials for most of this period. They are selling their properties to compensate for decreasing cashflows (check out their press release: http://bit.ly/zeJ037). There are covenant breaches on their mortgages. In 2011, they extended the maturity of their debt for 4 years at an additional 2% premium (over the previous 7.5%). In other words, I suggest that their distribution may be at risk, as their financial position is not strong.
I hope that this helps. Cheers, Monty
Analyzing Canadian REITs, Part IV: Residential [View article]
Great point! I was looking at how non-Canadians can buy (through a discount broker) the Canadian TSX/S&P real estate indices, real estate ETFs, and CEFs on US exchanges. I drew a blank - nothing OTC or on the usual exchanges.
One of the next articles will be devoted to the various funds, but it seems that non-Canadians must use a full-service broker (and possibly pay significant fees).
That said, you have some great researching talent, and may come up with something for all of us!
Cheers, Monty
Analyzing Canadian REITs, Part II: Diversified Office, Retail, And Industrial [View article]
Thanks for your comments! If it makes you feel any better, Canadians are subject to similar withholding taxes with US investments, and our tax-sheltered retirement plans.
Cheers, Monty