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

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To: Goldberry who wrote (1404)	9/10/2001 6:52:05 PM
From: Peter W. Panchyshyn	Read Replies (1) of 11633

The point is one(O & G Trusts) is a depleting resource (oil or gas) and the other (RE trusts) are (land, bricks and mortar). Granted some of the OGT's like the oil sands have a very long lifetime while many are quite short. ----------- Well lets just see if that is true. PGF.UN , ERF.UN, NCF.UN all have been around for nearly two decades. They have not closed up shop. They continue to do what they do. And they will do that for a longer time yet. They have no plans to just sit and let things RUNOUT. They all plan to be around for another 20 years. And all continue to provide investors with high current income. So much for the data supporting your statement ------------- When an OGT needs to replenish its reserves it usually buys the assets issuing more shares causing dilution, ------------ I have been in ERF.UN and PGF.UN from their beginnings. I recently got into NCF.UN. As far as dilution hurting my returns I do not see it. Both ERF and PGF have had numerous secondary offerings over the years. I am still making excellent income from both and the unit prices are historically still in pretty good shape when looked at from the time they first started. They are not historically too high and they are not historically too low. Just right I think. some the good ones with savvy leadership did this when the price was very low while others have done so recently and paid prices that should Oil and gas price down to lower levels over the next several years will either have to shut in production on some of the recent purchases or sell at a loss. ---------------- Those you describe may have to shut in production who knows but not yet as prices are still historically sound. Look to the cost of production for PGF ( in its most recent financial satement ) it is in the $5 to $6 range for a barrell of energy equivalent still in the high CDN $20 area closer to $30. They are hardly loosing money on any sales now or in the near future. And yes it really is likely that these trusts will ever sell their gas or oil at a loss.!!!!!!!!!!!! Has never ever happened yet. And historically prices for both commodities have been a lot lower and they were still making money for investors. The data do not support your statements again.------------------ --------------------- Both trusts have a place in the portfolio's of those seeking income. One should however be aware of the associated risks of each. My personal belief is that over the longer term real estate trusts will provide better returns. ------------- Glad to see you state it is your personal belief. I do not concern myself with belief I concern myself with data and with facts. And again the data do not support your statements. Look to my previous post where I mention I have one REIT , REF.UN. I have held this one for around twenty years as well first when it was a mutual fund then when it became a trust. My oil and gas trusts returns are far ahead of the returns for the REIT. Go get the historical pricing data and payout information from Financial Post Datagroup to confirm. That is long term results supported by the facts. Not belief supported by yet more belief. ---------------------------------------------------- Most OGT's are IMO fully or over valued at present whereas REITs are generally undervalued with many of the properties held having potential to release the hidden value. ------------ Well lets see for an economy just on the edge of recession. Just how could that be. Dont buisnesses consolidate, close operations, and move. With that backdrop where is the hidden value. A shopping centre owned by a REIT has one of its tenants closing down to save costs. Great potential there. --------------------------- Real estate on the other hand generally requires maintenance only and because the asset is leased out over 5-10-20 year terms on a net net basis provide a stable known return and other than expansion growth requires no further purchases ---------- Leases can be broken buisnesses can and do go under. Where is the stable return under that scenario. It doesn't exist save for in your own mind.

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