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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Tommaso who wrote (19526)3/3/2003 11:58:30 PM
From: jim_p  Read Replies (2) of 206089
 
"I cannot understand the relative lack of interest on this thread in Canadian natural gas trusts, especially those listed on US exchanges, and most especially NCN. This pays a huge dividend already, and will soon be showing grotesquely increased earnings from the continuing squeeze on natural gas. The dividend return alone outstrips by far what one can expect from long term stock investment"

You can't compare a royalty trust to a long term stock investment.

Royalty trust under perform because most people realize that you are buying a depleting asset and unless you have months of time to spend on one company and a PE degree, there is no way for the investor to figure out how much of the return is yield vs. a return of capital.

Most of the royalty trust I've taken the time to analyze have turned out to be bad investments.

If you want a more direct ownership in the asset, buy it yourself and get a 15-20% yield on top of your retune of capital and without all the expensive management fees charged by the trust.

Jim
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