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  • Canada: The Industrialized Market for the Coming Decade [View article]
    I bought heavily into the canadian REIT area.....as I also believe Canada will grow substationally in the future.

    So why did I pick the reits. I do think the canadian dollar (loonie) will appreciate. But if you are mining the stuff and your operating costs are in loonies, and your selling product in US dollars.....you are now stuck with the scenario of....does the loonie appreciate faster than the commodity being sold in US dollars...or vice versa.

    If the loonie appreciates more quickly....then the cost of production increases quickier than the cost of goods sold.....leading to a pinching of margins over time than an expansion....its a tough call what will appreciate more quickly.

    The reits don't have this currency problem....as costs and revenue are both in the same currency.

    One company that could get crushed if they don't hedge is nintendo...major sales in USD....costs in Yen.

    Its just something to keep in mind.....but again....I own a lot in canadian oil sands and penn west energy, etc.....just because thats where the reserves reside.
    Sep 22 09:00 am |Rating: +5 0
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