Nugie

Canadian Royalty Trusts in Need of an American Revolution

I have read both of Mr. Wards articles Nov. 24 and Nov. 26. While I found them informative I also got a sense that Mr. Ward has a large axe to grind, possibly because he was burned by the changes that were announced on Holloween of 2006. My suggestion to him is "Get Over It". Governments change tax structures all of the time. I do believe Mr. Wards point about equal taxation for all is important to contintunity of investments in any foreign countrys securities. Most countrys don't want their resources exploited by foreigners; however if they want the money needed for investment they must deal equally with everyone who invests. In regards to Mr. Wards comments on the survival of Canadian Royalty Trusts, he will be right in some cases and wrong in many others. Each Trust should be examined on it's own investment merits, the same way you would look at individual stocks. The ones with strong innovative management teams and good business plans will survive and flourish and the ones with bad management will die on the vine. It is wrong for Mr. Ward to paint all Canadian Investment trusts with the same broad stroke of his tainted paint brush. I have worked in executive positions in the financial services business for over 40 years and have been an investment advisor, money manager and risk manager. I just started selectively adding Canadian Royalty Trusts to my IRA 3 months ago. In a hostel economic environment like the one we are currently in there are very few places that you can find good yield in companies that have good growth potential and wise managements. There are enough well managed Trusts that you can find good investments with reasonable payout ratios that have long lasting reserves or long term contracts for their services. If Mr Ward thinks oil and gas prices are going to stay at low levels for any length of time than he should do a bit more homework on world oil supplies and forward consumption. I for one will take what I can get in yield from my Trusts till 2011 is upon us. These trusts pay an average yield of 17% at current price levels while yields on U.S. stocks are still less than 4% and no less risky than Canadian Royalty Trusts. Of course I could always buy U.S. Treasurys and still get less than 4% in an economy where the U.S. government us pouring 7 trillion in to prop up it's financial system in a deflationary cycle. Mr. Ward next time you are going to paint an investment picture for the many readers of Seeking Alpha please be more objective about painting all investments with the same broad stroke, and keep sour grapes out of it. Because you are not capable of picking the good Trusts from the bad that is not a reason to make them all look bad.