To: trustmanic who wrote (1994 ) 11/17/2001 4:30:33 AM From: Peter W. Panchyshyn Respond to Using the numbers (below) I thought I would show a little of my method. It is a little more complicated than I will explain because you do some extra tweeking with the spreads between years. But it basically follows a linear regression for the highs on one end and the lows at the other. Without boring anyone with exact math involved (you can check how to do linear regression at your own leisure) here it goes. Or one can do just a quick little scan of the prices and come up with the following or somewhat similar. Now the past numbers show highs in the range of say $28 to $ 35. Lows say in the range of say $12 to $20. Using the exact regression formula and the tweeking between the yearly ranges and using further back data ,to say the trusts beginning , will give much better forecasted ranges. Now between the unit prices of $28 to $35 an (joe average) investor would not buy. But just enjoy the rise and take the income. Between the ranges of say $12 to $20 an (joe average) investor would be buying and accumulating and enjoying the income , the averaging down , and the increased number of units and the more income that that would bring. Now between $20 and $28 an investor could add if he chose to , that would be of course a personal choice ,and would have to depend on how close the current price is to one end as opposed to the other. Or the general condition of the market , the sector, or where else he may find current high income. Of course on his own risk reward basis preferrably. The unit prices have cycled over and over through the past they will cycle over and over through the present and future. This method takes advantage of that proven cycling. It works best with the more data points (unit highs and lows for each year) one has to examine. That is to say the longer the particular trust has been around. For the trusts like ERF and PGF and REF that have been around the longest (nearly 20 years) they would give a better model to follow. Obviously a trust that has just a year or two would not be a good candidate. Though in a overall downturn in the sector it maybe possible to infer (by more math) what would happen to the newer trust if you used the longer trusts data as a guide and did the necessary extrapolating to the newer trusts own price per unit. The majority of trusts came onto the market around 96 or 97, those provide about 5 years of data to examine enough to get an idea but still more would be better. If a person wanted to, he could go further and look to maybe instead of the yearly highs and lows, take a look at the monthly highs and lows, or even further take a look to the weekly highs and lows. That would provide some much needed more data points especially for the trusts that have not been around for that long. Though I would not simply ignore the yearly data. In itself it is very useful as a guide. Now one could if he so choosed, and was comfortable with it, trade these trusts using this method as a guide. But as a note of caution, that I mentioned before, trading, requires time and effort , and is simply not for everyone, and not everyone can make a go of it because of that time and effort. But to each his own.
