Steven Ward

Royalty Trusts: Maintaining Income in a Volatile Market

On a fundemental basis I see a strange paradox in investor opinion on gas stocks in general. We have energy portfolio managers in Canada and the US loading up on gas stocks, primarily those that have an increase in productio, but they gladly acknowledge that a tremendous amount of new supply is comming on stream in the US next year.

Also, industry journals have sounded alarm bells on the few LNG port facilities we have in the US for the import of LNG may well be underutilized for several years due to the large volumes of gas comming on stream next year and in 2010.

Due we expect a hard winter? Do we expect CNG to be widely implemented? To we expect a global price for gas like oil? That would eliminate any fears of over supply and lower royalty payouts.
Is that realistic? I just find it ironic that experts are plowing into gas all the while warning of large increases in volumes.

Royalty Trusts: Maintaining Income in a Volatile Market

To Fitzman: My word of caution to nbvestors was soley based on a narrow view of the investment itself not a macro view of tax amd monetary policy.

The reason we are all getting these lush dividends as compared to Treasuries is the risk factor of changing commodity prices. There is risk here beyond what I see in the Blogs. Yes, I own some of these as well but I'm not loading up--yet.
Dems need money pure and simple. The FICA witholding on W-2's will not hold up. They will sooner or later repeal tax incentives for Trusts as they wish to repeal such incentives for oil companies. Trusts will be next.Additionally, expect FICA witholding on trademark, copyright and other royalty streams of income as well as rent.

If that strengthens the dollar so be it. It's just going to happen in my opinion.

Royalty Trusts: Maintaining Income in a Volatile Market

The 600 pound gorilla in the room on all income oil and gas stocks is this year's election. The Dems need money and they are already opposed to drilling, next will be non-W-2 income streams, such as Royalty Trusts.Wait and see first then move.