d_teller's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/50403/comments http://seekingalpha.com/article/162390-preferred-stock-etfs-still-attractive?source=feed#comment-685748 685748 Mon, 21 Sep 2009 23:01:12 -0400 http://seekingalpha.com/article/161567-the-nine-best-natural-gas-oil-pipelines-for-income-and-capital-gains?source=feed#comment-680146 680146

On Sep 16 11:53 AM GimliJan wrote:

> One of the best articles I have read on MLP's and how they work.
> I appreciated the information about holding them in a Roth IRA as
> that is what I am doing. I had read on the forums that due to the
> tax consequences on the UBTI if you made over a $1000 a year you
> could lose the Roth IRA status and have to pay taxes on your whole
> account! I don't a large account and the $1000 a year is way more
> than I will realize in profits from the MLP portion of my portfolio.
>
> I also would like some more information on the reasons you picked
> the companies you hold and also about the "arbitrage". I bought TPP
> at $17 and have thoroughly enjoyed the run up and the merger with
> EPD. I plan on adding Pembrian and maybe WPZ.
> Thanks for a great article!]]> Wed, 16 Sep 2009 21:33:02 -0400

On Sep 16 11:53 AM GimliJan wrote:

> One of the best articles I have read on MLP's and how they work.
> I appreciated the information about holding them in a Roth IRA as
> that is what I am doing. I had read on the forums that due to the
> tax consequences on the UBTI if you made over a $1000 a year you
> could lose the Roth IRA status and have to pay taxes on your whole
> account! I don't a large account and the $1000 a year is way more
> than I will realize in profits from the MLP portion of my portfolio.
>
> I also would like some more information on the reasons you picked
> the companies you hold and also about the "arbitrage". I bought TPP
> at $17 and have thoroughly enjoyed the run up and the merger with
> EPD. I plan on adding Pembrian and maybe WPZ.
> Thanks for a great article!]]> http://seekingalpha.com/article/161567-the-nine-best-natural-gas-oil-pipelines-for-income-and-capital-gains?source=feed#comment-680139 680139
You can find the info at the NASDAQ site under the "pink sheets" listings, (OTCBB) and also at www.QuantumOnline.com

which has quite a number of the Cdn Income trusts listed with their TMX(TSX) and OTC equivalent listings.


On Sep 16 06:19 PM wg wrote:

> "PMBIF. This company transports about 1/2 the oil produced in the
> western Canadian sedimentary basin, offers a current distribution
> yield of approximately 10%, and pays monthly. "
>
> all of the financial stats sites I visit say PMBIF pays no dividend/yield.
> What's up?]]> Wed, 16 Sep 2009 21:24:55 -0400
You can find the info at the NASDAQ site under the "pink sheets" listings, (OTCBB) and also at www.QuantumOnline.com

which has quite a number of the Cdn Income trusts listed with their TMX(TSX) and OTC equivalent listings.


On Sep 16 06:19 PM wg wrote:

> "PMBIF. This company transports about 1/2 the oil produced in the
> western Canadian sedimentary basin, offers a current distribution
> yield of approximately 10%, and pays monthly. "
>
> all of the financial stats sites I visit say PMBIF pays no dividend/yield.
> What's up?]]> http://seekingalpha.com/article/161567-the-nine-best-natural-gas-oil-pipelines-for-income-and-capital-gains?source=feed#comment-680125 680125
The problem of UBTI (Unrelated Business...Taxable Income) that has accumulated to a single taxpayer's I.D. across all the taxpayer's shelters - is really very simple:

if it exceeds $1000.00/tax year, it has to have the Fiduciary of one of the shelters file a Tax Identification Number request and pay any UBIT (tax) from the shelter to the IRS. This isn't the income from the MLP's or pipelines...it's only the profits directly passed through to the limited partners...the taxpayer... that represents the income that is "unrelated to the limited partnership registration". An example, last year, a lot of MLP's had negative UBTI or losses, due to the swoon of commodity pricing.
The previous year, many had a lot of UBTI from selling a portion of their assets or raising debt. This varies from year to year.

Fiduciaries need the copies of the K-1's, and charge fees to get a TIN (920t) for the sheltered account. This is After the tax season closes, so interest and penalties accrue. The tax payer (beneficial owner) of the shelter may NOT pay the UBI tax directly, because it is:
a. After the year of the record
b.Considered an excess contribution.

With regard to Roth's, this can disqualify the Tax-Exempt status, and has other ramifications.

In any case, all of the return of capital, losses carried forward, and other allowed depreciation from the original price of purchase are totally wasted in a tax-sheltered account...those that aren't Roth's will pay tax at marginal rates...there's no Capital Gains advantage when e.g., Enterprise' ROC or Tax-loss carry-forwards ( which reduce the capital basis of the securities in a taxable account) can't be used to offset withdrawals.

The beneficial owner has to notify the fiduciary of the sheltered account that will be used to pay the tax, because the fiduciary (Brokerage) probably doesn't "know" what's on the K-1...they don't get copies. Only the Registration agent of the MLP (the accountants) and the IRS and the tax-payer get these forms.

In addition, it hasn't yet come to pass, but it probably will, that ETF's and Holdrs and other issuers of K-1's that take delivery and hold in storage >90 days...are considered COMMODITY HOLDERS: the IRC has an explicit prohibition vs holding commodities in a tax shelter, unless one has a "self-directed" IRA, with a fiduciary (not just a brokerage or advisor) who will file the TIN and 990 Tax forms...and these charge a percentage of assets or fees from $200-2500/year.

In summary:

UBTI across all sheltered accounts with a single Taxpayers's I.D > $1000, requires a fiduciary to file and pay tax.

The various schema to reduce "basis' or defer income, are wasted in a tax sheltered account.

The costs for setting up a "self-directed" IRA can exceed $2500/year.
]]> Wed, 16 Sep 2009 21:10:12 -0400
The problem of UBTI (Unrelated Business...Taxable Income) that has accumulated to a single taxpayer's I.D. across all the taxpayer's shelters - is really very simple:

if it exceeds $1000.00/tax year, it has to have the Fiduciary of one of the shelters file a Tax Identification Number request and pay any UBIT (tax) from the shelter to the IRS. This isn't the income from the MLP's or pipelines...it's only the profits directly passed through to the limited partners...the taxpayer... that represents the income that is "unrelated to the limited partnership registration". An example, last year, a lot of MLP's had negative UBTI or losses, due to the swoon of commodity pricing.
The previous year, many had a lot of UBTI from selling a portion of their assets or raising debt. This varies from year to year.

Fiduciaries need the copies of the K-1's, and charge fees to get a TIN (920t) for the sheltered account. This is After the tax season closes, so interest and penalties accrue. The tax payer (beneficial owner) of the shelter may NOT pay the UBI tax directly, because it is:
a. After the year of the record
b.Considered an excess contribution.

With regard to Roth's, this can disqualify the Tax-Exempt status, and has other ramifications.

In any case, all of the return of capital, losses carried forward, and other allowed depreciation from the original price of purchase are totally wasted in a tax-sheltered account...those that aren't Roth's will pay tax at marginal rates...there's no Capital Gains advantage when e.g., Enterprise' ROC or Tax-loss carry-forwards ( which reduce the capital basis of the securities in a taxable account) can't be used to offset withdrawals.

The beneficial owner has to notify the fiduciary of the sheltered account that will be used to pay the tax, because the fiduciary (Brokerage) probably doesn't "know" what's on the K-1...they don't get copies. Only the Registration agent of the MLP (the accountants) and the IRS and the tax-payer get these forms.

In addition, it hasn't yet come to pass, but it probably will, that ETF's and Holdrs and other issuers of K-1's that take delivery and hold in storage >90 days...are considered COMMODITY HOLDERS: the IRC has an explicit prohibition vs holding commodities in a tax shelter, unless one has a "self-directed" IRA, with a fiduciary (not just a brokerage or advisor) who will file the TIN and 990 Tax forms...and these charge a percentage of assets or fees from $200-2500/year.

In summary:

UBTI across all sheltered accounts with a single Taxpayers's I.D > $1000, requires a fiduciary to file and pay tax.

The various schema to reduce "basis' or defer income, are wasted in a tax sheltered account.

The costs for setting up a "self-directed" IRA can exceed $2500/year.
]]> http://seekingalpha.com/article/157825-today-s-best-risk-reward-income-investments-part-i-canadian-power-stocks?source=feed#comment-644476 644476
They are exempt, as are Cdn REITS, and a few other specific trusts. Some were planning to convert to MLP's but realized that U.S. Unit holders would get whammed by a special tax on MLP's from Canada. (PGH converted last year, then reconverted to a corpn., this July to avoid the taxation to U.S. unit holders).

This special taxation provision was enacted in October, a couple of years ago, by the Harper Govt., to "prevent abuse of flow-through profits" from business trusts...and it had a severe, negative effect on a lot of Cdn Unit Trusts, except, slowly, people (investors) woke up to the facts of the trusts future write off's of various business expenses when they convert to corporations (Unit Investment Trusts can't write off depletion, etc., but Corporations can, so the tax burden may be pretty small until 2013.)

I currently hold ATPWF and many other Cdn Units, some purchased directly at the TSX and others from the "pink sheet" equivalents...when commodity prices go up, the dividends go up, if they are producers...but if they're in services or utilities, their values and dividends tend to move with the economy.

Currently, a 15% Cdn income tax is withheld on any dividends paid, but in a taxable account...this 15% is a tax-credit (whether you file a standard or deduction-filled return)on U.S. Federal returns. If foreign taxes exceed $400.00 U.S., one can still get a credit by filling out a tedious, but simple additional form, because the U.S. has a tax-treaty with Canada (and many other countries).


On Aug 24 01:32 PM Bob Mc wrote:

> Virtually all of ATPWF's revenues comes from the US. Isn't this an
> important drawback as compared to the other stocks. I have invested
> in the others and refrained from ATPWF for that reason.
> Comments?]]> Mon, 24 Aug 2009 21:19:44 -0400
They are exempt, as are Cdn REITS, and a few other specific trusts. Some were planning to convert to MLP's but realized that U.S. Unit holders would get whammed by a special tax on MLP's from Canada. (PGH converted last year, then reconverted to a corpn., this July to avoid the taxation to U.S. unit holders).

This special taxation provision was enacted in October, a couple of years ago, by the Harper Govt., to "prevent abuse of flow-through profits" from business trusts...and it had a severe, negative effect on a lot of Cdn Unit Trusts, except, slowly, people (investors) woke up to the facts of the trusts future write off's of various business expenses when they convert to corporations (Unit Investment Trusts can't write off depletion, etc., but Corporations can, so the tax burden may be pretty small until 2013.)

I currently hold ATPWF and many other Cdn Units, some purchased directly at the TSX and others from the "pink sheet" equivalents...when commodity prices go up, the dividends go up, if they are producers...but if they're in services or utilities, their values and dividends tend to move with the economy.

Currently, a 15% Cdn income tax is withheld on any dividends paid, but in a taxable account...this 15% is a tax-credit (whether you file a standard or deduction-filled return)on U.S. Federal returns. If foreign taxes exceed $400.00 U.S., one can still get a credit by filling out a tedious, but simple additional form, because the U.S. has a tax-treaty with Canada (and many other countries).


On Aug 24 01:32 PM Bob Mc wrote:

> Virtually all of ATPWF's revenues comes from the US. Isn't this an
> important drawback as compared to the other stocks. I have invested
> in the others and refrained from ATPWF for that reason.
> Comments?]]> http://seekingalpha.com/article/140538-mlps-for-tax-deferred-acounts?source=feed#comment-526598 526598
The Unrelated (to) Business Taxable Income (UBTI) limit is per TAXPAYER ID, across all tax-sheltered accounts (Roths, SEPs, IRA's ,401K's), etc. The K-1's go electronically to the IRS from the Fiduciary of the Business (The MLP, HOLDR. Commodity trading Index maker, such as Deutsche Bank for the DBA & others)...and the tax payer , NOT the IRA's fiduciary, gets a paper copy.

The tax-payer has to notify one of the sheltered accounts' fiduciary to prepare a IRS form 990t (and the brokerage or investment house legal dept. will send forms to be filled out and charge a fee to be paid from proceeds of that shosen IRA account for the cost of preparing a Tax-Shelter's Tax Identification Number [990t is a TIN registration form])...and then the data needs to be sent to that TIN issuer, and that Fiduciary will pay the UBIT (Unrelated Business Income Tax) to the Federal Govt.

This process can take some weeks, and always occurs after the due date for income taxes. The tax-payer can't pay directly...it would be after the fiscal year end, and be considered an "excess contribution" for the IRA.

The fees can range upwards of $200.00, and are similar to those that are used for "Self-directed IRA's" that may hold commodities, rental property and other investment real estate, collectibles and prcious metals.

The only forms the regular IRA's file to the Feds are the 1099R's and the 4698 "end-of-year" statements of contributions, sales and withdrawals.

There are a whole slew of Closed End Funds that handle all the vexatious paper work (and part of their high fees are the costs to do this), Kayne Anderson has KYE, KYN, etc. Tortoise has TYG...and others, which MAY be held in a sheltered account. Wait to invest until they trade at a significant discount to NAV, which is usually when commodities are being dumped or decreasing in value (which occurred last Fall, see "Robert Young"s comments, above).

It is best not to hold a K-1 generating security in a sheltered account, nor a Grantor Trust, such as GLD or SLV, nor a commodity fund that states that it might take physical possession of the commodity (DBA, for example), since these aren't allowed in the usual sheltered accounts.

To "Robert Moyat",

ETN's have recently been classified by the Treasury Dept., as "Bond" type investments, since they are debt offerings from an investment group. Their "interest" payments or "dividends" are considered as marginally taxable dividends. They MAY be held in sheltered accounts.
]]> Mon, 01 Jun 2009 12:22:25 -0400
The Unrelated (to) Business Taxable Income (UBTI) limit is per TAXPAYER ID, across all tax-sheltered accounts (Roths, SEPs, IRA's ,401K's), etc. The K-1's go electronically to the IRS from the Fiduciary of the Business (The MLP, HOLDR. Commodity trading Index maker, such as Deutsche Bank for the DBA & others)...and the tax payer , NOT the IRA's fiduciary, gets a paper copy.

The tax-payer has to notify one of the sheltered accounts' fiduciary to prepare a IRS form 990t (and the brokerage or investment house legal dept. will send forms to be filled out and charge a fee to be paid from proceeds of that shosen IRA account for the cost of preparing a Tax-Shelter's Tax Identification Number [990t is a TIN registration form])...and then the data needs to be sent to that TIN issuer, and that Fiduciary will pay the UBIT (Unrelated Business Income Tax) to the Federal Govt.

This process can take some weeks, and always occurs after the due date for income taxes. The tax-payer can't pay directly...it would be after the fiscal year end, and be considered an "excess contribution" for the IRA.

The fees can range upwards of $200.00, and are similar to those that are used for "Self-directed IRA's" that may hold commodities, rental property and other investment real estate, collectibles and prcious metals.

The only forms the regular IRA's file to the Feds are the 1099R's and the 4698 "end-of-year" statements of contributions, sales and withdrawals.

There are a whole slew of Closed End Funds that handle all the vexatious paper work (and part of their high fees are the costs to do this), Kayne Anderson has KYE, KYN, etc. Tortoise has TYG...and others, which MAY be held in a sheltered account. Wait to invest until they trade at a significant discount to NAV, which is usually when commodities are being dumped or decreasing in value (which occurred last Fall, see "Robert Young"s comments, above).

It is best not to hold a K-1 generating security in a sheltered account, nor a Grantor Trust, such as GLD or SLV, nor a commodity fund that states that it might take physical possession of the commodity (DBA, for example), since these aren't allowed in the usual sheltered accounts.

To "Robert Moyat",

ETN's have recently been classified by the Treasury Dept., as "Bond" type investments, since they are debt offerings from an investment group. Their "interest" payments or "dividends" are considered as marginally taxable dividends. They MAY be held in sheltered accounts.
]]> http://seekingalpha.com/article/134953-an-alzheimer-s-expert-discusses-the-next-generation-of-drugs?source=feed#comment-490779 490779 Tue, 05 May 2009 15:36:11 -0400 http://seekingalpha.com/article/127942-canadian-energy-trusts-the-best-long-term-income-and-dollar-hedge?source=feed#comment-443717 443717
I believe the limit on 1040 foreign tax credits (without filing form 1116) is $400.00 U.S. ...but you could check the irs.gov site and the directions for the Fed Pub 17 (the summary guide to the 1040), which means in a taxable account you probably could receive >$2650.00 in Cdn dividends, before filling out form 1116.

Unless you buy your Cdn Trust securities from the issuer directly, all the required info will be on the 1099 that a brokerage sends...the dates and $ for purchases, sales, dividends, any non-taxable returns of capital...with the exception of any Publicly Traded Partnerhips, such as PGH, which send a fairly detailed K-1 form directly, and not via a 1099 (the brokerage doesn't send any K-1s), and that can come as late as March 30th.

Nearly all the CanRoys' dividends are qualified, and for U.S. investors, many of the Cdn REITs also issue qualified dividends. One thing to watch for ---in a taxable account---are "Stapled Units' which pay interest on a bond plus dividends (these also are known as EIS', etc.) and are common in the U.S and overseas...for taxable accounts, the portion of the distribution that is from the bond interest is not qualified for the reduced 15% rate.]]> Sat, 28 Mar 2009 21:39:57 -0400
I believe the limit on 1040 foreign tax credits (without filing form 1116) is $400.00 U.S. ...but you could check the irs.gov site and the directions for the Fed Pub 17 (the summary guide to the 1040), which means in a taxable account you probably could receive >$2650.00 in Cdn dividends, before filling out form 1116.

Unless you buy your Cdn Trust securities from the issuer directly, all the required info will be on the 1099 that a brokerage sends...the dates and $ for purchases, sales, dividends, any non-taxable returns of capital...with the exception of any Publicly Traded Partnerhips, such as PGH, which send a fairly detailed K-1 form directly, and not via a 1099 (the brokerage doesn't send any K-1s), and that can come as late as March 30th.

Nearly all the CanRoys' dividends are qualified, and for U.S. investors, many of the Cdn REITs also issue qualified dividends. One thing to watch for ---in a taxable account---are "Stapled Units' which pay interest on a bond plus dividends (these also are known as EIS', etc.) and are common in the U.S and overseas...for taxable accounts, the portion of the distribution that is from the bond interest is not qualified for the reduced 15% rate.]]> http://seekingalpha.com/article/126269-the-closed-end-fund-discount-quandary?source=feed#comment-430064 430064 Tue, 17 Mar 2009 23:03:25 -0400 http://seekingalpha.com/article/122265-regulators-an-apology?source=feed#comment-402270 402270
FWIW, in the October 2008 issue of "Portfolio" magazine, beginning on page 84, ther's an article by Scott Paltrow, entitled "S.E.C. No Evil", which details the (misfeasance) or (following the Boss' injunction to 'Go Easy on Business') that I believe is a must read...

THE SEC DELIBERATELY REDUCED ITS ENFORCEMENT AND FINES, for even...criminal and egregious cases. At the present time, there's obviously going to be a lot of catch-up, and this may provide significant revenue going forward.

In the case of Madoff, with funds segregated from the actual trading section, and with "blinded" investors (both institutional and individual), there's no way the SEC could have known that the shenanigans were ongoing...except that numerous complaints and allegations were suppressed/ignored.

Remember, this article was written BEFORE the Madoff announcement. So Cox's policies of non-enforcement and slap-on-the-wrist fines led to a lot of fleecing, and a lot of pain, not just here, but in foreign banks and funds.

A major hurdle for the S.E.C. going forward, is the lack of trust by whistle-blowers; the loss of investigative reporters for the print media who have the talent and insight to follow this trail; the loss of S.E.C. personnel who actually wanted to pursue corruption...etc.]]> Tue, 24 Feb 2009 21:32:32 -0500
FWIW, in the October 2008 issue of "Portfolio" magazine, beginning on page 84, ther's an article by Scott Paltrow, entitled "S.E.C. No Evil", which details the (misfeasance) or (following the Boss' injunction to 'Go Easy on Business') that I believe is a must read...

THE SEC DELIBERATELY REDUCED ITS ENFORCEMENT AND FINES, for even...criminal and egregious cases. At the present time, there's obviously going to be a lot of catch-up, and this may provide significant revenue going forward.

In the case of Madoff, with funds segregated from the actual trading section, and with "blinded" investors (both institutional and individual), there's no way the SEC could have known that the shenanigans were ongoing...except that numerous complaints and allegations were suppressed/ignored.

Remember, this article was written BEFORE the Madoff announcement. So Cox's policies of non-enforcement and slap-on-the-wrist fines led to a lot of fleecing, and a lot of pain, not just here, but in foreign banks and funds.

A major hurdle for the S.E.C. going forward, is the lack of trust by whistle-blowers; the loss of investigative reporters for the print media who have the talent and insight to follow this trail; the loss of S.E.C. personnel who actually wanted to pursue corruption...etc.]]> http://seekingalpha.com/article/122241-epi-my-pick-from-all-india-focused-funds?source=feed#comment-402241 402241
IFN paid a lot, and its NAV went down, subsequently. If only the NAV or the Market Price (with CEFs the Market and the Nav are often widely different), then the chart isn't very useful.

With regard to the relative holdings, the CEFs are under some reasonable restraint (unlike ICICI, HFDC and other investment banks), to purchase securities with a transparent, and verifiable cost...in other words, there may be thousands of securities available...and many may represent good value to a local, and knowledgable investor, but from overseas, the Indian SENSEX is not easy to follow, nor are its listings adequately analyzable.

I am not faulting your efforts, but wish to query the findings in deeper detail. The relative costs/expenses is useful, but it would be also interesting to compare the total holdings (number of securities, share classes, [other holdings, such as non-dividend -paying securities]), as one does for open-ended mutual funds.

Finally, is there any basis for the concentrations, such as cap-weighting?]]> Tue, 24 Feb 2009 20:38:46 -0500
IFN paid a lot, and its NAV went down, subsequently. If only the NAV or the Market Price (with CEFs the Market and the Nav are often widely different), then the chart isn't very useful.

With regard to the relative holdings, the CEFs are under some reasonable restraint (unlike ICICI, HFDC and other investment banks), to purchase securities with a transparent, and verifiable cost...in other words, there may be thousands of securities available...and many may represent good value to a local, and knowledgable investor, but from overseas, the Indian SENSEX is not easy to follow, nor are its listings adequately analyzable.

I am not faulting your efforts, but wish to query the findings in deeper detail. The relative costs/expenses is useful, but it would be also interesting to compare the total holdings (number of securities, share classes, [other holdings, such as non-dividend -paying securities]), as one does for open-ended mutual funds.

Finally, is there any basis for the concentrations, such as cap-weighting?]]> http://seekingalpha.com/article/117254-dividend-stocks-the-good-the-bad-and-the-ugly?source=feed#comment-372296 372296
The CanRoys, but not any xLP or Holdr or GrantorTrust are suitable for U.S. Tax-Sheltered accts.: IRA's SEP, S' and Roth's. The 15 % Cdn tax on dividends cannot be reclaimed from a tax-shelter.

But , since most are "qualified divs' for current IRS (U.S.) tax purposes, (even the Cdn REIT's divs are, although U.S. REIT divs aren't qualified) the net of the Cdn tax is an offset ...it's a tax credit on the U.S. 1040, so the current 'qualified" dividend tax has been paid at the source, because of the U.S.- Cdn. tax treaty.

After 2011, some of the CanRoys may change, some have sufficient Cdn expenses that their dividend stream will be unchanged for 2-3 additional years. Others, such as Atlantic Power Income Trust (ATP.Un/TO) have income from U.S. operations, and won't be subject to the Cdn. 2011 taxes on income produced in Canada. Some, e.g., Pembina, Enerplus, Provident, may reduce dividends, as oil/gas revenues decline, but others such as Bonterra and Boralex may increase them as the weather looks colder/longer.

There's a listing of the trusts from the TSX site that's in Xce (xls) format; and one column has the "type" of Trust...Commercial, Oil/Gas, etc.

When you go to the listing on the TSX, you can see if it's a "Stapled" unit (the combination of bond and equity, such as TimberWest Forest Products; whether it's interlisted on major U.S. exchanges, or has a Nasdaq "Pink-sheet" listing; what its business is, in some detail, etc.

There's also a note for U.S. investors, that about 1/3 of the CanRoys are not for "Foreign" investors, and you get this, and their dividend history from the link to the investor-relations section at the company's home page.]]> Sat, 31 Jan 2009 23:56:29 -0500
The CanRoys, but not any xLP or Holdr or GrantorTrust are suitable for U.S. Tax-Sheltered accts.: IRA's SEP, S' and Roth's. The 15 % Cdn tax on dividends cannot be reclaimed from a tax-shelter.

But , since most are "qualified divs' for current IRS (U.S.) tax purposes, (even the Cdn REIT's divs are, although U.S. REIT divs aren't qualified) the net of the Cdn tax is an offset ...it's a tax credit on the U.S. 1040, so the current 'qualified" dividend tax has been paid at the source, because of the U.S.- Cdn. tax treaty.

After 2011, some of the CanRoys may change, some have sufficient Cdn expenses that their dividend stream will be unchanged for 2-3 additional years. Others, such as Atlantic Power Income Trust (ATP.Un/TO) have income from U.S. operations, and won't be subject to the Cdn. 2011 taxes on income produced in Canada. Some, e.g., Pembina, Enerplus, Provident, may reduce dividends, as oil/gas revenues decline, but others such as Bonterra and Boralex may increase them as the weather looks colder/longer.

There's a listing of the trusts from the TSX site that's in Xce (xls) format; and one column has the "type" of Trust...Commercial, Oil/Gas, etc.

When you go to the listing on the TSX, you can see if it's a "Stapled" unit (the combination of bond and equity, such as TimberWest Forest Products; whether it's interlisted on major U.S. exchanges, or has a Nasdaq "Pink-sheet" listing; what its business is, in some detail, etc.

There's also a note for U.S. investors, that about 1/3 of the CanRoys are not for "Foreign" investors, and you get this, and their dividend history from the link to the investor-relations section at the company's home page.]]> http://seekingalpha.com/article/117327-kinder-morgan-a-kinder-gentler-investment-opportunity?source=feed#comment-371669 371669
The dividends they pay, as regular, 1099 - reports will show- are from income-tax-paying corporations (unlike the LP's and Holdrs, and grantor trusts, wherein the profits & losses flow through to the limited partners). The M. L.P.'s are set up to avoid having to pay income tax.

These holding companies (or Chapter C corporations, or RICs, or Limited Liability Funds, (e.g., KYE vs KYN) are paid a percentage of the LP's profits before the limited partners get theirs...the "parent" company, for instance KMR, may get 5% of the first NN profits; 10 % of the next OO profits, 20 % of the next PP "tranche of profits" from the Parrtnerships that it "sponsors" by holding a significant portion of the Publicly-Traded Limited Partnership securities, for its own account.

When the partnership's income is tremendous, the parent company may not pay out so much...but these are quite safe to hold in a tax-sheltered acct.: there's no K-1 to delay tax-filings in a regular account either.

There's also no benefit from MLP " tax-loss carry-forwards" in a tax-sheltered account; nor is there anything but a quasi capital loss from a return of capital (which many Closed-End Funds also use to manage their income streams of constant dividends...the shares go down in value as the ROC continues).

In contrast, in a short period in a taxable account, these "tax-sheltering" tricks can be useful by converting marginally taxed stream of dividends to a reduction of basis so that a long-term cap gain appears, if the MLP shares are sold before their basis becomes negative.

Even if the chance of a >$1000.00 total of Item 20 V on the various K-1s is low--if they were unknowingly placed in a sheltered account (Item 20 V is income to the limited partner from activities that are "Unrelated Business" vs. what the tax-shelter registration of the MLP states...maybe it sold a pipeline, or a gas storage facility, when its income is supposed to be royalties collected from transferring the fuels), the hassle of contacting the IRA's fiduciary, and getting them to file for a Tax Identification Number for the IRA, and then having them file the form 990t, to pay - from the IRA - the Unrelated Business Income Tax (UBIT)...is pretty costly, because of the charges the IRA fiduciary will make to do all this paperwork...lest the sheltered accounts become TAXABLE!, ]]> Fri, 30 Jan 2009 21:20:58 -0500
The dividends they pay, as regular, 1099 - reports will show- are from income-tax-paying corporations (unlike the LP's and Holdrs, and grantor trusts, wherein the profits & losses flow through to the limited partners). The M. L.P.'s are set up to avoid having to pay income tax.

These holding companies (or Chapter C corporations, or RICs, or Limited Liability Funds, (e.g., KYE vs KYN) are paid a percentage of the LP's profits before the limited partners get theirs...the "parent" company, for instance KMR, may get 5% of the first NN profits; 10 % of the next OO profits, 20 % of the next PP "tranche of profits" from the Parrtnerships that it "sponsors" by holding a significant portion of the Publicly-Traded Limited Partnership securities, for its own account.

When the partnership's income is tremendous, the parent company may not pay out so much...but these are quite safe to hold in a tax-sheltered acct.: there's no K-1 to delay tax-filings in a regular account either.

There's also no benefit from MLP " tax-loss carry-forwards" in a tax-sheltered account; nor is there anything but a quasi capital loss from a return of capital (which many Closed-End Funds also use to manage their income streams of constant dividends...the shares go down in value as the ROC continues).

In contrast, in a short period in a taxable account, these "tax-sheltering" tricks can be useful by converting marginally taxed stream of dividends to a reduction of basis so that a long-term cap gain appears, if the MLP shares are sold before their basis becomes negative.

Even if the chance of a >$1000.00 total of Item 20 V on the various K-1s is low--if they were unknowingly placed in a sheltered account (Item 20 V is income to the limited partner from activities that are "Unrelated Business" vs. what the tax-shelter registration of the MLP states...maybe it sold a pipeline, or a gas storage facility, when its income is supposed to be royalties collected from transferring the fuels), the hassle of contacting the IRA's fiduciary, and getting them to file for a Tax Identification Number for the IRA, and then having them file the form 990t, to pay - from the IRA - the Unrelated Business Income Tax (UBIT)...is pretty costly, because of the charges the IRA fiduciary will make to do all this paperwork...lest the sheltered accounts become TAXABLE!, ]]> http://seekingalpha.com/article/117265-is-a-20-yield-sustainable-look-at-atlas-pipeline-partners?source=feed#comment-370563 370563 Thu, 29 Jan 2009 21:18:31 -0500 http://seekingalpha.com/article/117265-is-a-20-yield-sustainable-look-at-atlas-pipeline-partners?source=feed#comment-370560 370560 Thu, 29 Jan 2009 21:16:25 -0500 http://seekingalpha.com/article/117123-tip-etf-a-high-dividend-stock-and-inflation-hedge?source=feed#comment-370554 370554 Thu, 29 Jan 2009 20:59:54 -0500 http://seekingalpha.com/article/116321-peak-water-as-big-a-threat-and-opportunity-as-peak-oil?source=feed#comment-367051 367051
PICO is the symbol for Pico Water Holdings, which has and buys Western U.S. water rights and sells them at a profit.

However, with Majority Leader Reid's embrace of Nevada housing development, barring a major earthquake, the Ogallalah and other SW aquifers will go dry in a generation.]]> Mon, 26 Jan 2009 21:01:44 -0500
PICO is the symbol for Pico Water Holdings, which has and buys Western U.S. water rights and sells them at a profit.

However, with Majority Leader Reid's embrace of Nevada housing development, barring a major earthquake, the Ogallalah and other SW aquifers will go dry in a generation.]]> http://seekingalpha.com/article/96902-china-milk-crisis-quality-is-everybody-s-problem?source=feed#comment-366086 366086 Sun, 25 Jan 2009 22:53:58 -0500 http://seekingalpha.com/article/116156-energy-infrastructure-mlps-among-the-very-best-high-dividend-stocks?source=feed#comment-366067 366067
The K-1 forms are sent by the MLP's accounting office...not the fiduciary 9the brkerage) that holds your securities (who may not have a clue what's on a K-1 that you receive, because the identifiers on the K-1 are your Tax shelter account {RA Account #} and their Tax Shelter restistration number) (and they come in late March and early April, way after any 1099's from "usual' trades and dividends arrive)...

BUT-


it's only if ITEM 20 V sums up to more than USD$1,000.00 in all of the IRA's that a 990t has to be filed and tax paid to the Feds.


For an example...DBA's K-1 comes from Deutsche Bank...the index provider: I held DBA for a while, and they reported >$10K in "dividends" from contracts and straddles on a K-1 that I received in one of my IRA's. I called the IRS and checked and the IRS reaffirmed that the income to the IRA was not reportable...only any excess of $1K across the IRA's under K-1 Section 20 V was a concern.

To: "ArfulDodger"-

Yes charities, and religious tax-exempt organizations have similar rules, The form they file is (I believe) a 920t - similar in purpose to the 990t.

And there's a whole list of other forms for these tax-exempt entities to file on income received. They are usually listed under IRC 501(c).

And to all, above, who've questions...the taxpayer receives (doesn't fill out) the K-1...and each comes with a diagram for where on schedule A, or E or C, the amounts are to be entered. None of this is entered if the K-1 is in an IRA---only Item 20V is a problem -- and only if the sum for all tax-sheltered accts is >1K.

...then, one has to notify the fiduciary of one of the IRAs to file a 990t and they charge $ for the Taxpayer (IRA pays the tax) Number Setup forms (TIN forms for an IRA) and for filling out the 990t Unrelated Business Income Tax forms and sending sufficient proceeds from the IRA to cover all the taxes due to excess UBTI.

]]> Sun, 25 Jan 2009 22:21:55 -0500
The K-1 forms are sent by the MLP's accounting office...not the fiduciary 9the brkerage) that holds your securities (who may not have a clue what's on a K-1 that you receive, because the identifiers on the K-1 are your Tax shelter account {RA Account #} and their Tax Shelter restistration number) (and they come in late March and early April, way after any 1099's from "usual' trades and dividends arrive)...

BUT-


it's only if ITEM 20 V sums up to more than USD$1,000.00 in all of the IRA's that a 990t has to be filed and tax paid to the Feds.


For an example...DBA's K-1 comes from Deutsche Bank...the index provider: I held DBA for a while, and they reported >$10K in "dividends" from contracts and straddles on a K-1 that I received in one of my IRA's. I called the IRS and checked and the IRS reaffirmed that the income to the IRA was not reportable...only any excess of $1K across the IRA's under K-1 Section 20 V was a concern.

To: "ArfulDodger"-

Yes charities, and religious tax-exempt organizations have similar rules, The form they file is (I believe) a 920t - similar in purpose to the 990t.

And there's a whole list of other forms for these tax-exempt entities to file on income received. They are usually listed under IRC 501(c).

And to all, above, who've questions...the taxpayer receives (doesn't fill out) the K-1...and each comes with a diagram for where on schedule A, or E or C, the amounts are to be entered. None of this is entered if the K-1 is in an IRA---only Item 20V is a problem -- and only if the sum for all tax-sheltered accts is >1K.

...then, one has to notify the fiduciary of one of the IRAs to file a 990t and they charge $ for the Taxpayer (IRA pays the tax) Number Setup forms (TIN forms for an IRA) and for filling out the 990t Unrelated Business Income Tax forms and sending sufficient proceeds from the IRA to cover all the taxes due to excess UBTI.

]]> http://seekingalpha.com/article/116156-energy-infrastructure-mlps-among-the-very-best-high-dividend-stocks?source=feed#comment-365261 365261
Scimitar is right about states trying to tax an out-of-state MLP-security holder, and if your state has a reciprocity agreement with the state levying this tax, a lien on your property may occur. Arizona, California and Nevada MLPs are subject to this extortion, Texas domiciled MLP's aren't. I haven't checked all the diferent states, but the paperwork to file is much worse than plugging K-1 data into Turbotax or TaxAct. Even when a security is held in a tax-sheltered account, the states will try to tax it...in violation of Federal rules.

Tim Plaehn, a frequent contributor to the SA articles, wrote a nice comparison of 3 of the ATLAS pipeline MLP family, to compare their earnings, debt, funding etc. The article noted is #104942.

Some other MLP prospects (or their C-Corp. equivalents) have shown diametrically opposite recent movements; e.g. Kayne Anderson: [KYN (down) KYE (up)].

Another interesting one is an MLP called ATN...which also has some articles listed here.

Finally, for the securities called 'Canroys", not all are affected by the Cdn. govts. plan to require income taxes at the source in 2011, specifically:

REITS are not affected - and many of the lesser-known ones that earn income from U.S. holdings, are not to be subject to Cdn Income taxes, either.

One example of the latter is "Atlantic Power Income Trust", ATPWF, {ATP.UN on the TSX}. It's a power generating utility income trust with power plants in the U.S. In a taxable account, the 15% withheld in Canada is a tax credit vs the income on a U.S. 1040, so its dividends will be "tax-qualified", unless the foreign tax-credits are repealed after the "qualified" dividends are in 2011. In an tax-sheltered account, these 15% Cdn withholdings on dividends aren't recoverable, currently.]]> Sat, 24 Jan 2009 21:27:50 -0500
Scimitar is right about states trying to tax an out-of-state MLP-security holder, and if your state has a reciprocity agreement with the state levying this tax, a lien on your property may occur. Arizona, California and Nevada MLPs are subject to this extortion, Texas domiciled MLP's aren't. I haven't checked all the diferent states, but the paperwork to file is much worse than plugging K-1 data into Turbotax or TaxAct. Even when a security is held in a tax-sheltered account, the states will try to tax it...in violation of Federal rules.

Tim Plaehn, a frequent contributor to the SA articles, wrote a nice comparison of 3 of the ATLAS pipeline MLP family, to compare their earnings, debt, funding etc. The article noted is #104942.

Some other MLP prospects (or their C-Corp. equivalents) have shown diametrically opposite recent movements; e.g. Kayne Anderson: [KYN (down) KYE (up)].

Another interesting one is an MLP called ATN...which also has some articles listed here.

Finally, for the securities called 'Canroys", not all are affected by the Cdn. govts. plan to require income taxes at the source in 2011, specifically:

REITS are not affected - and many of the lesser-known ones that earn income from U.S. holdings, are not to be subject to Cdn Income taxes, either.

One example of the latter is "Atlantic Power Income Trust", ATPWF, {ATP.UN on the TSX}. It's a power generating utility income trust with power plants in the U.S. In a taxable account, the 15% withheld in Canada is a tax credit vs the income on a U.S. 1040, so its dividends will be "tax-qualified", unless the foreign tax-credits are repealed after the "qualified" dividends are in 2011. In an tax-sheltered account, these 15% Cdn withholdings on dividends aren't recoverable, currently.]]> http://seekingalpha.com/article/116158-which-way-are-shipping-stocks-headed?source=feed#comment-364739 364739
I hold GMR, DSX, EGLE, GNK, OCNF, NGPC, PRGN, and not more than 2% of a total portfolio in any one.]]> Fri, 23 Jan 2009 23:33:26 -0500
I hold GMR, DSX, EGLE, GNK, OCNF, NGPC, PRGN, and not more than 2% of a total portfolio in any one.]]> http://seekingalpha.com/article/116156-energy-infrastructure-mlps-among-the-very-best-high-dividend-stocks?source=feed#comment-364732 364732
The problem for the owner of the S or SEP or IRA is the K-1 form on which the partnership or ML-Holdr or other type of K-1 reporting entity (such as GLD or DBA) reports its pass through of profits and losses to the limited partners.

The history of this is way back when Congress allowed such Publicly-traded partnerships to form, they required a tax-shelter registration which says the nature of the business...so that if an MLP or PTP has income that is NOT from the registration type , then this income is considered to be "Unrelated to the Business for which the Registration was filed"...and is item 20V in the K-1. This was to protect ordinary, tax-paying corporations from the competition of a company which did not have to pay income taxes.

This UBIT or UBTI (Unrelated Business Taxable Income) may not exceed $1000/tax reporting individual in a shelter...or the shelter ---that is the IRA itself, not the beneficial owner- needs to file a 990t income tax return to the IRS. The Fiduciary can pay the tax from the IRA, but the owner may not...it's after that fiscal year, and the fiduciary has to create a tax-identification number for that sheltered account.

Further, failure to file/pay may disqualify the tax-shelter for the individual...and the K-1 data are reported...not necesssarily by the brokerage or fiduciary who holds the records, but by the security's accountants directly to the IRS...with their registration # and the taxpayers account # automatically, and electronically filed in March of the following year (03-15-09 for end of year 2008).

So if the total UBTI for your traditional+SEP+S+Roth exceeds 1000.00, then the tax-shelters are disqualified and taxable.

So you have to notify Fiduciaries who report your ususal 5498 end-of-year holdings to the IRS about the 20V amounts and get them to file a tax return to the Feds! They charge $200-2000 for the paperwork.

That's the reason to NEVER HOLD A SECURITY THAT ISSUES A K-! in a tax-sheltered account...unless the fiduciary will set up a TIN and file a 990t for you (these are so-called 'self-directed' IRAs).

UBTI from energy transfer or pipeline partnerships occur when pipelines are sold , or funds are borrowed by the MLP to develop additional business.

There are stock (C-Corporations not MLP's) that are the beneficial owners of MLPs, and are standard, 1099-filing entities, KMR /KMP, EEQ/ETP, etc. They get a part of the MLP's income, and pay taxes, and they're also high dividend paying, but less dangerous holdings in a tax-shelter.

Finally, all of the MLPs K-1 tax-loss and return of income (in lieu of dividends, which might get a short-term marginal taxation, many give a return of capital- which in taxable accounts reduces the basis, and converts income to long-term cap gains, at a beneficial reduction of tax rates) - ARE TOTALLY WASTED in a Tax-Sheltered Account, because the ouput is taxed at marginal rates, or just reduces the capital basis of a Roth.

Go to the IRS.gov site and look up the term UBIT or UBTI. Tax-sheltered entities do have to pay Income tax on unrelated business income: charities, IRAs, Churches, etc.]]> Fri, 23 Jan 2009 23:11:48 -0500
The problem for the owner of the S or SEP or IRA is the K-1 form on which the partnership or ML-Holdr or other type of K-1 reporting entity (such as GLD or DBA) reports its pass through of profits and losses to the limited partners.

The history of this is way back when Congress allowed such Publicly-traded partnerships to form, they required a tax-shelter registration which says the nature of the business...so that if an MLP or PTP has income that is NOT from the registration type , then this income is considered to be "Unrelated to the Business for which the Registration was filed"...and is item 20V in the K-1. This was to protect ordinary, tax-paying corporations from the competition of a company which did not have to pay income taxes.

This UBIT or UBTI (Unrelated Business Taxable Income) may not exceed $1000/tax reporting individual in a shelter...or the shelter ---that is the IRA itself, not the beneficial owner- needs to file a 990t income tax return to the IRS. The Fiduciary can pay the tax from the IRA, but the owner may not...it's after that fiscal year, and the fiduciary has to create a tax-identification number for that sheltered account.

Further, failure to file/pay may disqualify the tax-shelter for the individual...and the K-1 data are reported...not necesssarily by the brokerage or fiduciary who holds the records, but by the security's accountants directly to the IRS...with their registration # and the taxpayers account # automatically, and electronically filed in March of the following year (03-15-09 for end of year 2008).

So if the total UBTI for your traditional+SEP+S+Roth exceeds 1000.00, then the tax-shelters are disqualified and taxable.

So you have to notify Fiduciaries who report your ususal 5498 end-of-year holdings to the IRS about the 20V amounts and get them to file a tax return to the Feds! They charge $200-2000 for the paperwork.

That's the reason to NEVER HOLD A SECURITY THAT ISSUES A K-! in a tax-sheltered account...unless the fiduciary will set up a TIN and file a 990t for you (these are so-called 'self-directed' IRAs).

UBTI from energy transfer or pipeline partnerships occur when pipelines are sold , or funds are borrowed by the MLP to develop additional business.

There are stock (C-Corporations not MLP's) that are the beneficial owners of MLPs, and are standard, 1099-filing entities, KMR /KMP, EEQ/ETP, etc. They get a part of the MLP's income, and pay taxes, and they're also high dividend paying, but less dangerous holdings in a tax-shelter.

Finally, all of the MLPs K-1 tax-loss and return of income (in lieu of dividends, which might get a short-term marginal taxation, many give a return of capital- which in taxable accounts reduces the basis, and converts income to long-term cap gains, at a beneficial reduction of tax rates) - ARE TOTALLY WASTED in a Tax-Sheltered Account, because the ouput is taxed at marginal rates, or just reduces the capital basis of a Roth.

Go to the IRS.gov site and look up the term UBIT or UBTI. Tax-sheltered entities do have to pay Income tax on unrelated business income: charities, IRAs, Churches, etc.]]> http://seekingalpha.com/article/116183-etf-vs-mutual-fund-two-ways-to-invest-in-gold-miners?source=feed#comment-364718 364718 Fri, 23 Jan 2009 22:25:53 -0500 http://seekingalpha.com/article/115324-the-moving-average-spectrum-part-2?source=feed#comment-360380 360380 The longer term moving averages were useful for noting both "out-performance" of specialized and sector funds, and "under-performance" as well. I appreciate all the time it took you to generate these spectra. I just used multicycle log-paper graphs to plot the S&P and MSCI or other general sectors, and bought when the 200-day moving avg, was more than a bit below the general trend; + sold when the holding was similarly above the expected trend.
With Mutual funds in a tax-sheltered environment, this allows for a greater purchase of shares when they're relatively cheap, and avoids blindly following a calendar-based purchase of expensive shares. At the beginning of 2008, the swans were beginning to darken, and I moved 40% to cash, despite the low interest rates, and in May 2008, sold off all but two highly-valued (over-priced) REITs from my separate IRA.

Despite the current valuation carnage, I'm comfortable with my holdings and plan to add beaten-down energy + materials securities during the current commodity sell off.]]> Mon, 19 Jan 2009 20:45:14 -0500 The longer term moving averages were useful for noting both "out-performance" of specialized and sector funds, and "under-performance" as well. I appreciate all the time it took you to generate these spectra. I just used multicycle log-paper graphs to plot the S&P and MSCI or other general sectors, and bought when the 200-day moving avg, was more than a bit below the general trend; + sold when the holding was similarly above the expected trend.
With Mutual funds in a tax-sheltered environment, this allows for a greater purchase of shares when they're relatively cheap, and avoids blindly following a calendar-based purchase of expensive shares. At the beginning of 2008, the swans were beginning to darken, and I moved 40% to cash, despite the low interest rates, and in May 2008, sold off all but two highly-valued (over-priced) REITs from my separate IRA.

Despite the current valuation carnage, I'm comfortable with my holdings and plan to add beaten-down energy + materials securities during the current commodity sell off.]]> http://seekingalpha.com/article/110609-the-problem-with-gld-and-slv-etfs?source=feed#comment-330359 330359
Publication 590, explicitly FORBIDS the holding of physical commodities (and except for U.S. minted bullion) any bullion in an IRA. The Treasury has yet to rule on the "holdrs" and other types of combined asset securities that may actually receive physical commodities in their creation or liquidation accounts... but these may also disqualify an IRA. These prohibitions also apply to self-directed IRA's, with a possible exception if a trustee of a fiduciary institution gets a private-letter ruling from the IRS, that the set up and taxpayer (the IRA, itself) reporting information is properly set up.

I would read the first page of IRS Pub 590 very carefully, before purchasing any commodity-related ETF in a tax-sheltered account..]]> Mon, 15 Dec 2008 17:16:14 -0500
Publication 590, explicitly FORBIDS the holding of physical commodities (and except for U.S. minted bullion) any bullion in an IRA. The Treasury has yet to rule on the "holdrs" and other types of combined asset securities that may actually receive physical commodities in their creation or liquidation accounts... but these may also disqualify an IRA. These prohibitions also apply to self-directed IRA's, with a possible exception if a trustee of a fiduciary institution gets a private-letter ruling from the IRS, that the set up and taxpayer (the IRA, itself) reporting information is properly set up.

I would read the first page of IRS Pub 590 very carefully, before purchasing any commodity-related ETF in a tax-sheltered account..]]> http://seekingalpha.com/article/106059-is-hyperinflation-on-the-horizon?source=feed#comment-306889 306889
Secondly, all of the media and lobbyists, (who, if rendered into biodiesel would certainly ameliorate global fuel needs for many years), in every country mentioned, will do all they can to keep their particular ox from being gored.

Thirdly, a law should be passed that those who are elected or appointed to governmental positions must not be allowed to lobby for "x"-years...an ethical non-compete arrangement.

Fourthly, a sincere transition to a consumption-based tax system (NOT a flat tax) such as the one described at fairtax.org, will slowly replace consumerism with capital production, because income won't be taxed, only retail expenditures will be...all savings and dividends and investments will grow...tax-free! No more 66000 pp of Treasury regs on subsidies, shelters, etc. No more corporate income taxes, no more payroll taxes...no more audits, and all the IRS agents will be employed collecting taxes remitted at the point-of-sale. It might take years, but eventually, economies driven by "wants" will be driven by "needs"

One can hope..

]]> Sat, 15 Nov 2008 21:40:49 -0500
Secondly, all of the media and lobbyists, (who, if rendered into biodiesel would certainly ameliorate global fuel needs for many years), in every country mentioned, will do all they can to keep their particular ox from being gored.

Thirdly, a law should be passed that those who are elected or appointed to governmental positions must not be allowed to lobby for "x"-years...an ethical non-compete arrangement.

Fourthly, a sincere transition to a consumption-based tax system (NOT a flat tax) such as the one described at fairtax.org, will slowly replace consumerism with capital production, because income won't be taxed, only retail expenditures will be...all savings and dividends and investments will grow...tax-free! No more 66000 pp of Treasury regs on subsidies, shelters, etc. No more corporate income taxes, no more payroll taxes...no more audits, and all the IRS agents will be employed collecting taxes remitted at the point-of-sale. It might take years, but eventually, economies driven by "wants" will be driven by "needs"

One can hope..

]]> http://seekingalpha.com/article/105018-latam-mining-crash-effects-losers-and-bigger-losers?source=feed#comment-302506 302506
This is a nice overview of the valuation reduction for many commodity producers in Latin America (could be as well for Canada and Australia), but it misses some fundamental issues across the countries: incredibly increased infrastructural costs (water, electric, tailing controls and waste abatement); decreased availability of credit for all but a few very strong or partly nationalized companies; political analysis, with provincials wanting more revenue, while revenue is decreasing + local irritation with companies that despoil the agrarian or subsistence farming.

These were all problems that simmered BEFORE the 'demand destruction' brought commodity prices (except for basic food-stuffs) down by 50-75%. There were also some company-specific currency trades that went wrong (SDA is an example), and other problems with, e.g. PCU (Asarco lawsuit) and a number of other large companies, in various countries.

Climate change is another long-term component affecting the Southern-most areas of the world...it's getting DRIER. So orchards, farms and mining mills that require water, and cattle and fisheries are affected, in Argentina, Chile, S.Africa, and Australia.]]> Mon, 10 Nov 2008 20:45:33 -0500
This is a nice overview of the valuation reduction for many commodity producers in Latin America (could be as well for Canada and Australia), but it misses some fundamental issues across the countries: incredibly increased infrastructural costs (water, electric, tailing controls and waste abatement); decreased availability of credit for all but a few very strong or partly nationalized companies; political analysis, with provincials wanting more revenue, while revenue is decreasing + local irritation with companies that despoil the agrarian or subsistence farming.

These were all problems that simmered BEFORE the 'demand destruction' brought commodity prices (except for basic food-stuffs) down by 50-75%. There were also some company-specific currency trades that went wrong (SDA is an example), and other problems with, e.g. PCU (Asarco lawsuit) and a number of other large companies, in various countries.

Climate change is another long-term component affecting the Southern-most areas of the world...it's getting DRIER. So orchards, farms and mining mills that require water, and cattle and fisheries are affected, in Argentina, Chile, S.Africa, and Australia.]]> http://seekingalpha.com/article/101693-dividend-investing-eight-companies-with-positive-feedback?source=feed#comment-290500 290500
The latest from Linn Energy (LINE) is that its costs and loans are secure through 2013-2014. It's a very good buy for a taxable account, IMHO.]]> Sat, 25 Oct 2008 21:16:07 -0400
The latest from Linn Energy (LINE) is that its costs and loans are secure through 2013-2014. It's a very good buy for a taxable account, IMHO.]]> http://seekingalpha.com/article/101693-dividend-investing-eight-companies-with-positive-feedback?source=feed#comment-290498 290498
Paragon has fallen considerably in the past month, as both a shipper vulnerable to spot prices and a tanker company. I'd look at Eagle (EGLE) and Diana (DSX) which have crumbled with the demand destruction hypothesis, but they have little debt and forward hedged rates through the next two years...IMHO, way undervalued.

FRO and other tanker companies have also been hit by the perception that oil shipments will decrease by > 50% (as the price of oil falls 50 %)...Unlkely, and maybe a good entry time.

PCU and Freeport-McMoran, are interesting, because Dr. Copper has fallen below $2.40/lb...an indication that this commodity won't be needed in the upcoming (according to the spot pricing) depression, anyplace in the world. At these prices for PCU and Freeport, and for TX, or SID, if you don't have them, they might be good entry points, put in a small bid at 10% below the latest cost, and leave it for a week..

By the way. for OldTrader, the shipping cycle can be 4 years or longer...and you need to look at the debt costs for the companies, (it's gone up astronomically, as the credit crunch continues) + look at how the contracts for the services are priced...spot = depressed and subject to the shipping index (which says we're headed to a 2001-2 recession) or hedged, as though the costs to ship will stay the same for another two-three years (and with decreasing marine diesel costs, the costs are actually DECREASING), and the company's debt load and marketing process.

Those that rapidly cycle (GENCO= GNK), can vary 25% in a month, and are great for taxable accounts yo-yo-ing btween 15 and 70.

I do hold GMR, DSX, EGLE, AOD, AGD, PRGN, PYGYF, PCU, and others in tax-sheltered accounts. GNK and others are in a taxable account.]]> Sat, 25 Oct 2008 21:12:23 -0400
Paragon has fallen considerably in the past month, as both a shipper vulnerable to spot prices and a tanker company. I'd look at Eagle (EGLE) and Diana (DSX) which have crumbled with the demand destruction hypothesis, but they have little debt and forward hedged rates through the next two years...IMHO, way undervalued.

FRO and other tanker companies have also been hit by the perception that oil shipments will decrease by > 50% (as the price of oil falls 50 %)...Unlkely, and maybe a good entry time.

PCU and Freeport-McMoran, are interesting, because Dr. Copper has fallen below $2.40/lb...an indication that this commodity won't be needed in the upcoming (according to the spot pricing) depression, anyplace in the world. At these prices for PCU and Freeport, and for TX, or SID, if you don't have them, they might be good entry points, put in a small bid at 10% below the latest cost, and leave it for a week..

By the way. for OldTrader, the shipping cycle can be 4 years or longer...and you need to look at the debt costs for the companies, (it's gone up astronomically, as the credit crunch continues) + look at how the contracts for the services are priced...spot = depressed and subject to the shipping index (which says we're headed to a 2001-2 recession) or hedged, as though the costs to ship will stay the same for another two-three years (and with decreasing marine diesel costs, the costs are actually DECREASING), and the company's debt load and marketing process.

Those that rapidly cycle (GENCO= GNK), can vary 25% in a month, and are great for taxable accounts yo-yo-ing btween 15 and 70.

I do hold GMR, DSX, EGLE, AOD, AGD, PRGN, PYGYF, PCU, and others in tax-sheltered accounts. GNK and others are in a taxable account.]]> http://seekingalpha.com/article/100443-how-low-can-mining-stocks-go?source=feed#comment-285280 285280
The Baltic Dry index drop not only reflects earlier fuel costs, but also the deleveraging of bets on commodities' prices by SWF's and Hedge funds.

However, many sound shippers (who've contracted lease rates through 2010-2011) have seen their valuations cut to half of book value :EGLE & GNK (Eagle and Genco) are examples, and may represent reasonable entry points.

On this site a comparison of Freeport_McMoran to Southern Copper, indicated a relative advantage for FCX, but if PCU can resolve the Asarco problem, it will have similar valuations. I like to look at long-term (5-10 yrs) of the charts to see the cycles, and I buy when the dividends seem secure.

The spot price of copper below $2.40, earlier this past week, was a cautionary note concerning the increasing slowdown worldwide ...some call it "Dr.Copper" as a measure of the worlds's healty commerce and growth.]]> Sat, 18 Oct 2008 15:41:27 -0400
The Baltic Dry index drop not only reflects earlier fuel costs, but also the deleveraging of bets on commodities' prices by SWF's and Hedge funds.

However, many sound shippers (who've contracted lease rates through 2010-2011) have seen their valuations cut to half of book value :EGLE & GNK (Eagle and Genco) are examples, and may represent reasonable entry points.

On this site a comparison of Freeport_McMoran to Southern Copper, indicated a relative advantage for FCX, but if PCU can resolve the Asarco problem, it will have similar valuations. I like to look at long-term (5-10 yrs) of the charts to see the cycles, and I buy when the dividends seem secure.

The spot price of copper below $2.40, earlier this past week, was a cautionary note concerning the increasing slowdown worldwide ...some call it "Dr.Copper" as a measure of the worlds's healty commerce and growth.]]>