Delojozafado

The High Dividend Stock Investor's Collapsing Dollar Survival Guide, Part 3

Might you consider including Bird Construction BIRDF/BDT.UN as part of the Canadian Energy Infrastructure class?

Canadian Clean Energy Trusts: Best High Yield U.S. Dollar Hedge?

Carney and The BOC have already "indicated, hinted at", that at the end of the meeting of 4/24 they will spell out more precisely the plan and guidelines of Canada's own "Q" easing policy. So far they have indicated that this "Q" easing would be going towards the buying up of corporate debt. At any rate this electronic money machine Loonie creation will likely have a very sharp short term impact on the Loonie. I would expect to see the CAD $ to briefly breach the .78/1.30 mark.
I would see this as a major buying opportunity for (ATPWF),(GLHIF), and the very irascible (BIRDF).

Despite the continued struggle in the OIL Sands arena Bird has pushed sharply higher after recently breaking well below $16CD/Unit. They recently had a big project with Suncor (FireBag) put on hold, delay or maybe to be canceled. Bird exhibits the very bullish W chart pattern.

We can add some insight to the (GLHIF) as a previous poster noted in terms of 1st qtr hydrology. Today GLH announced the date for it's release of the most recent 1st qtr numbers and a conference call. We should expect some poor results against the last three previous quarters. This is perhaps partially reflected in the unit price not performing very closely in line with the over all market averages as of late. @ $12.19 US dollars we see a full 7% monthly distribution rate against the withholding and a .81 currency factor. We are about to see the results of first quarter hydrology reflected in the numbers that will be reported. A good deal of snow and high pressure persisting reducing precipitation and resulting in seasonal accumulations of ice and snow pack detracting from the water flows we would expect to be much improved in the next three quarters. An analyst, a Ms Vargas at Clarus securities of Toronto has placed a buy on GLH as of the first week of March. She has assigned the shares a target price of $18.50. The recent addition of $65 million in new generating assets that were acquired and not contracted to be built became accretive in FEB. A BDF closed in DEC with a subsidiary of (BAM) a majority owner through their subsidiary Brookfield Power, purchasing units at $16Cd per unit. Recently a unit buy back program (NCIB) was initiated proposing to retire 2.4% (1MM units) of the unit float exclusive of the units owned by BAM's subsidiary which has indicated their units will be with held from the market until the NCIB ends in March of 2010.

(ATPWF) despite a long delay 'til the very end of March in releasing their 2008 and 4th quarter results, seems to be validaing some Cliff notes posters who have categorized it as the baby with the bath water. Because of it's tax advantaged structure, a stapled unit, it is particularly appealing to the IRA /401-K investor. Generally only 40% of the distribution is subject to the Canadian with holding. The other 60% ends up being an interest payment. This should be noted by investors as the interest on the note portion will not qualify as a qualified dividend and will be fully taxed by the IRS as interest, as that is what it is.

In terms of the tax situation I thank Cliff for at least remarking, "It's as yet unclear if or how that will change in 2011". I am willing to be sanguine and believe that Labor faction of government is unlikely to gain anything significant, certainly not the PM seat. With the Tory's having a strong political base retaining Mr Harper as PM, tax policies in Canada will be moderate in terms of not wanting to chase out foreign capital. We can see this week the province of Alberta offering to knock down taxes and tariffs to O&G exploration and production as their O&G revenues have fallen off by 52% in just one year.

2011, A Canadian Tax Odyssey: Canadian Income Trust Investors' Guide

As no one as yet has offered an explanation of the "clarification" question I have posed. I will add my understanding of this as currently applies.

If you GOOGLE: "US Canadian tax treaty IRA with holding", one of the very first sites that appears is the "Canadian Tax Resource" web site. A blog there of 1/12/09 by one "Tax Guy" explained how this tax issue inside an IRA currently is treated.

"Unfortunately you will not be able to recover the withholding taxes related to Fording Coal because Fording Coal was structured as a trust. However dividends you receive from Teck should not be subject to Canadian withholding taxes at all, since Teck is a corporation. Under the Canadian - US income tax treaty, interest and dividends received from investments inside an IRA or 401-K are EXEMPT from Canadian taxes. "

Teck of course acquired Fording near the peak of the "met" coal hysteria in late 2007 or early 2008. Their bonds are now virtually traded as "junk". The unit holders received a near triple of the 52 week bottom in the unit price at the time the deal closed.

So those under water in their Can-Roy investments MAY be OK in a longer term scenario based on what occurred with Fording.
The person (Tax Guy) blogging on this site pretty much supports my contention that US taxpayers who hold NON-trust structured shares, NOT "UNITS" in Canadian CORPORATIONS will not have a 15% withholding applied to their tax sheltered investment distributions. If Cliff or there is any blogger here that can explain how this is to be "clarified", or changed I would certainly want to gain that insight.

As long as this situation applies to Can-Roys that are eventually morphed into Corporations, REITs (?) or even perhaps MLP*s, that means no with holding will be taken against the tax sheltered US investor with these newly structured Canadian holdings, then we are left to a possible conclusion. The tax reserve pools that many Can-Roys have been creating against maintaining or increasing the current distributions are in some sense creating a closed end fund at a discount, type investment. If a frog had a glass ... he wouldn't jump around so much. If we look at the IRA investor who is under distributions. Increasingly that would be the Boomers going forward we might surmise. They might be inclined to buy commodities and energy centric themes with yield. A trader who bought CHK-PRD in the shadow (after) of the last ex dividend date would now be sitting on a profit of $1000 + a full year of distributions, in terms of what they have now against their cost basis. Any way you can see how some of these Can-Roys when morphed might gain some following among the asset managers looking for these kind of investments for IRA clients that will provide some kind of protection against the coming great inflation. Unintended consequences... This beaten down asset class could emerge as the next excellent diversification segment to a broad group of US tax sheltered investors. They will effectively be getting the benefit of the tax pools now being created against the distributions of current unit holders. It is like that portion of the property tax bill a 78 year old pays that represents "Capital Reserve funds", to build new libraries, police stations, sewers, and buy fire trucks and such. They pay but never enjoy the benefits that accrue from these taxes as they find themselves not outliving the reserve funds.
*In the case of a morphing into an MLP there would be other complications,

This morning on Bloomberg we find a snippet postulating that the "Q" easing that is expected to be announced on or around 4/24 , by Mr. Carney "barker" and the BOC , will be a watered down less pernicious version against what the US has already been doing. US investors of all things Canadian should brace for the Loonie to briefly breach .78/1.28 in the wake of that statement near the end of the month. This may then be a great buying opportunity? EH?

2011, A Canadian Tax Odyssey: Canadian Income Trust Investors' Guide

"Also the way the withholding tax was applied to retirement accounts was clarified." ?????? It has been my understanding that Canada would no longer assess/withhold any taxes to US holders of these investments or the structures they might morph into if held in an IRA. If you own (RY) in your IRA do you pay Canadian tax on your dividends? If this issue/question has in fact been clarified could some one share with us what this clarification's guide lines are proposed to be? As I understand it the (ATBUF), is for instance already proceeding into a restructuring into a REIT.


On Apr 02 03:10 PM dvlatas wrote:

> This is a very informative article. I made a bundle of money investing
> in canroys, and lost a bundle when the Canadian Government decided
> to stop the rush to trust form. As I recall, Bell Canada was about
> to switch from corporate to trust form. In any event, I decided
> that Canada was going to act like a banana republic, so that it was
> time to search for that other bull market somewhere else.
>
> If anyone considers investing in Canadian Royalty trusts they might
> want to investigate the following.
>
> The treaty governing taxes between the Canada and the USA has been
> renegotiated/modified, but not yet approved by the US Senate. I
> had heard, and this should be checked out, that Canada will be allowed
> to withhold 25% rather than 15% at present. Also, the way the withholding
> tax was applied to retirement accounts was clarified.
>
> Additionally, there was a Congressman from Massachusetts that put
> a bill in the hopper last year to eliminate the favorable treatment
> of canroy distributions by the IRS.

The High Dividend Stock Investor's Collapsing Dollar Survival Guide, Part 2

So now I have taken 3/4 s of my BCF off the table for a nice gain and stop lossed the rest @ $6.84. I have since added another partial in GLHIF to a round 3K position and with today's strong Loonie move I am up over $500 in my position. The effective dividend also rose to 6.95% against my total cost basis on the bird going to .816. ENY which I continued to average down in to below $8 has exploded higher. I have a target for lightening in the mid $11 range. BSR has also rallied and I would love to get some off the table above $25. The ADM-PRA has really kicked butt as well and I am less than a buck away from taking off 20% of the position. At least I am above water now in my AES-PRC. I may have to find a less ambitious target below $38 to unload 50% of that. I am just even in my REP-PRA but I see it swooned in the after hours trading. Ken Fischer the perennial BULL has endorsed the shares of REP as part of his"Madonna" theme. He is also enthusiastic over DOW & AA. Madonna is easily the best show for the money on earth. 2 hrs and 20 minutes with a 10 minute break and a couple five minute costume changes. Just Awesome!! The female version of Dorian Grey. Sort of like an affordable Beamer. My Chem Trade shares had a very strong move higher today as well . At this price it is ripe for a take out. Teck Cominico now has a bad case of indigestion from the Fording Coal take out. With the Suncor deal and the Dow/Rohm Hass deal a small cao like ChemTrade would just round out a major. GACHF and HLSRF both had strong moves up today as well on a percentage basis. Wow my CHK-PRD is smokin' , now with Nat gas finding a resistance at $4 and trading up and down on the $4.50 handle. If only I had pulled the trigger at $53.xx on another 100 shares of CHK-PRD. Peaking A/C is nearly upon us. And so in that vein the EDE was smokin' again today, The 9% dividend may now be safe if the shares can top up over $18. Half of the discount due to the share dilution of their recent subsequent share public offering is now nearly erased. The A/C season is going to be a good one for them this year with all of their peaking Nat Gas turbine units going on for long runs. I truly believe that the best watermelons come from Arkansas. That means a lot of A/C while those melons are growin'. My shares in BP are really smokin' too. Too bad I did not jump the bones at the same time of some RDS/B. With the move higher today it's +7% yield is slipping away. Hey even Bruce not the Almighty had a big day with BAM adding on +1%. Did you see that intra-day swing in AGQ the day the Fed adjourned and made their announcement of the "Q" plan to destroy the US PE$O? A $33.12 low to a $44.xx handle? Yikes!


On Mar 04 04:03 AM Cliff Wachtel wrote:

> Thanks for the detailed comments. Great minds work alike. Where is
> your blog? Definetely worth checking further. thanks again, will
> try to pursue your suggestions, which at first glance seem very solid.
> thanks again, Cliff

The High Dividend Stock Investor's Collapsing Dollar Survival Guide, Part 3

Fidelity has the best one! 5 star rated by Morningstar. Unfortunately it is usually not available except by having an account or buying it at Fidelity. The symbol is (FICDX). Of course if you go there you may as well partake of an equally excellent fund (FLATX). Better than EWZ as you get plenty of exposure to Mexico, Oil and metals silver etc, Chile with lots of Copper and other resources including fertilizer, and some aggs in Argentina. The Real at least has as good a chance as the Loonie to out last the US PE$O. Of course the trouble these days with mutuals you can't take off the table for 30-180 days nor can you place a trailing stop. As we evolve through this msarket melt more mutuals will convert an ETF or CEF structure to keep their investors on board. With free to $10 trades you can just pick the top ten or 15 holdings and surrogate the fund with owning the stocks.


On Mar 05 01:45 PM 2banana wrote:

> Any kind of mutual fund/ETF come close to a portfolio like this?

The High Dividend Stock Investor's Collapsing Dollar Survival Guide, Part 2

I have no blog but "seeking alpha" has all of my posts on record and the ones on Great Lakes Hydro can be read by simply clicking on " 57 Comments". There is also a discussion of ATPWF in that history.


On Mar 04 04:03 AM Cliff Wachtel wrote:

> Thanks for the detailed comments. Great minds work alike. Where is
> your blog? Definetely worth checking further. thanks again, will
> try to pursue your suggestions, which at first glance seem very solid.
> thanks again, Cliff

The High Dividend Stock Investor's Collapsing Dollar Survival Guide, Part 2

I am on the same page with you! Thank you for your analysis of ATPWF in your 2/15 blog. Wow!... I own so many of these issues that you have outlined in this blog. I would also thank those that contributed insightful remarks there on ATP as well

Mostly I am bearish the US dollar vs Loonie against remarks from Jim Rodgers, Mark Zandi and Dennis Gartman. Now I add your voice to the list. As far as the Loonie goes though it seems a hard road to travel as of late. If you blog into a (FXC) you might find some blogs authored by a Kathy Lien. She is a currency strategist and over the last 6 weeks has made some very prescient and correct observations on the Loonie. She seems to feel this Loonie weakness may persist a bit longer. This morning we have the BOC cutting rates in line with the US Fed. Ms Lien does propose that stronger oil prices are the underlying foundation for a higher Loonie.

At this point I am holding my ATPWF shares but have not added. The acquisition in Fla one poster called "ballsey", is exactly what has held me back along with how far down these stapled units have dropped. I am not 100% comfortable with the debt situation. I don't even know if the debt situation is that well known/understood? They are not reporting 4th quarter and year end total results until the end of March. This seems a little late. Again I would have been more comfortable with some guidance press release in the interim. I recently added 100 (BP)at $39.40 and have not prospered, yet. I have some(AVV) in an IRA. I bought (ENY) to get the Canroy O&G trusts. With a $10.50 cost basis I am getting killed in that . I recently added 300 REP-PRA , I believe this is as solid as TOT. They are going to be on second base when the offshore oilCuba ball game starts. I have a limit order in for 200 VZ below $26. I am getting a little concerned about their claims to continue taking share. The pie is still shrinking even while most dump their land line belfore giving up the profitable mobile. Right now FCX-PRM sells at a $5 premium to the mandatory conversion of 5/01/10. Not that far away. I may bite on it but it looks dicey with the arm twisting so near a date. Yesterday's meltdown allowed me to add to KYE more Canadian Canroy trusts and MLPs. I also added to the "note" BSR the MLP index instrument. I also added the iron ore producer rich BCF. I am holding coal MLP rich BGR which also holds a lot of MLPs as well. My best holding has been the MLP CEF MTP. This one still trades at a discount to NAV as does BSR at its current price. All of these remove the UTBI and K-1 issues. Yesterday I took an initial position in CHK-PRD at $53.62/ ended @$55. I have also recently added a position in ChemTrade CGIFF/CHE.UN. Huge dividend and hugely beaten down like ATPWF. So as far as risky I am the pot calling the kettle... by going there instead of adding more ATP. I think I am just going to wait for these end of year numbers and 4th qtr results to be published at ATP to see if there are any overhangs in this equity.

That leads me to Great Lakes Hydro. With 2800 units It is my largest single holding. I have written on many of these Canadian investment blogs in length on GLHIF, in terms of the (BAM) Flatt issue/ the record profits and production in the 2008 annual results, the leverage to the Loonie / the 1st qtr vs 2nd qtr Hydrology issues and the +$20 52 week high valuation. Even as the US dollar continued to knock down the Loonie and GLH-UN.to was off on the TSX , GLHIF posted a 4 cent move higher in yesterday's melt down. I would encourage anyone to click on my Blogs list, to get my full perspective on GLHIF, which I regard as the value of a life time with it's very secure 6.5-7% effective dividend against it's 8.2% distribution. I have gotten into this position since the closing of the BDF of Dec '08, basically as a whale follower at a valuations below the BDF 16 CD$.

I would hope the author might be able to make some remarks on the Canadian issuances not mentioned CGIFF/Chem-Trade, BIRDF/ Bird Construction, and ATBUF/Acadian Timber (45% owned by BAM). AES another energy international that could benefit from a weaker dollar has been hammered down after reporting EARNINGS! in the last qtr results. They missed by about 15cents to a $1.10 against projected $1.25? I have the AES-PRC @$34 and am under water in it. I am holding and will most likely add on a drop to just below $30 if it gets there. The ADM-PRA is another I just added another 200 to yesterday as well. Rogers loves the soft commodities and Gartman while not keen on commodities yet says the soft commodities should out perform in the sector.