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

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To: Peter W. Panchyshyn who wrote (4325)	9/22/2002 7:37:54 PM
From: Lorne Larson	Read Replies (2) of 11633

Your example is completely senseless. In the PWI situation the question was whether to continue to hold PWI or switch to another trust. There was no issue about spending more money. Yet in your ridiculous example you have "Person A" buying 5000 MORE shares. Cannot you follow even a simple line of argument? Here's how it works: An investor holds 1000 shares of PWI which he bought at $7.00. The units fall to $5.80. Should he hold or switch to another trust? Option A is to hold on to PWI. He does so and PWI increases by 25% from $5.80 to $7.25. His position is now worth $7250 (1000@$7.25). Option B is to sell PWI and buy something else. He sells his PWI for $5800 and buys 725 PVE at $8.00. PVE increases by 37.5% to $11.00. His position is worth $7975 (725@$11.00). This is not a difficult concept. Any reasonably intelligent 8 year old could figure it out. Unfortunately it seems to be way beyond your capacity. To repeat it in as simple a manner a I can: Whether the switch is good or bad depends on whether the stock you switched into increased by a higher % than the stock you formerly held.

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