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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks

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To: whitepine who wrote (1090)	6/13/2001 1:50:16 AM
From: Peter W. Panchyshyn	Read Replies (1) of 11633

Guess I am confused. If the size of the secondary issue was 10x previous values and if one held a position prior to the announcement, you would consider this a fair market transaction? Seems to me a market should operate on principle of open and equal access to information to all parties within market. If the distribution of knowledge about future actions is selectively available only to a few, then it seems clear that the market is unfair. ---------- Its getting late. As I have said fairness in the market is an illusion. Information made available can be looked at in this way. It maybe easier to understand. A trust announces it is going to do a secondary issue. Now you have the following groups of people and their outcomes. Take a look to the example of the issue for NCF in february that Stan made mention of. Look to the chart yourself. One group does nothing having already committed most or all they are able to some time before the issue. For them the price drops substantially in the short term. In the medium to longer term the price recovers and they are better off then before. The price is higher the payout is higher. For another group the price drops they have been waiting for an opportunity to again committ to the trust they buy (accumulate) looking to the past ability of the fund managers to deliver from these occassions. They are better off then before too. Maybe even better than the other group because they got more shares at a cheaper price plus the increased income they will receive from their old units and that received from the new units now as well. Now in the medium to long term both have come out ahead. In the short term the former may be crying fowl. He could not take advantage of the occurrence like the latter. After a time when the former is doing well again he forgets his complaint. As I have stated in a earlier post my own circumstances parallel one of these groups. As I mentioned I was in PGF from its very beginning. I accumulated rather large amounts on weakness throughout the years. In the beginning the trust traded at $7 a unit earning less than $0.10 a share a month. Now the trust is at over $20 a unit paying around $0.30 a unit each month. As I stated over the years the trust has done a number of these secondary issues. Am I better off or worse off as a result. Clearly better off. Now lets not forget that someone may have bought into the trust in question AY at $13.50 its most recent high. This person is screaming the loudest. Why? Well he hasn't done his homework as to how these trusts operate. He hasn't looked to their history. He knows next to nothing about them. But he wants that high yield and that recent gain he was shown by his advisor he doesn't ask for more info. Well he is hit with a big wallop the units are down substantially. What does he do? Well not the wisest of things. He panics dumps it , takes his loss and screams bloody murder. The end result isn't his fault it can't be, Can it??????? -------------------------------------------------- Assume I am incorrect. Why would the TSE ever suspend trading of any issue? Of course, maybe we are just hoping that you will own a position in an issue when a 10X secondary is announced and your capital is diluted! To many, that would be fair for you and those who share your views. --------------- As I have clearly stated above and in a previous post for me such was indeed the case and more than once. Particularly in regards to PGF. It went through several secondary issues since I first got in. And I have held and or accumulated in each case along the way. Is it fair that my original investment is nearly worth 3 times its value?. Is it fair that my monthly income from the same is more than 3 times its first monthly amount?. Is it fair that I had the sense to accumulate the trust? Especially if you look at the results some seniors suffered with when the majority of these began to come to the market or shortly thereafter. No clearly it is not fair. And I am glad for that. Like I said before I hope the day never comes when a person who not knowing anything and not wanting to do anything is legally guaranteed the best possible return .------------------------------------------------------------------------------- Peter

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