Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Scott Mc who wrote (3675)	7/14/2002 12:01:25 AM
From: David Alon	Read Replies (1) \| Respond to of 11633

I agree with you, here is another article from the NP, Stock markets still plumbing new lows Rush to safer havens: Only income trusts make 52-week highs Ian Karleff and Jason Chow National Post Saturday, July 13, 2002 ADVERTISEMENT The stampede of investors into Treasury bills, housing, gold and income trusts is overshadowing the voices of those calling for a second-quarter corporate profit recovery as reason to buy stocks. This week we heard about accounting issues cropping up at a few major drug companies and Qwest Communications, while the week before it was Xerox Corp. and WorldCom Inc., the latter of which "is poised to knock off Enron as the largest bankruptcy in U.S. history." "What ails equity markets? Trust and a still overvalued U.S. dollar," wrote Norman Levine, vice-president of investment strategy at BMO Nesbitt Burns Inc. As a sign of the times, companies are actually coming out and saying they are not under investigation. The most widely traded U.S. government security, the 2 7/8% note maturing in June, 2004, recorded its biggest weekly gain in six months, while income trusts have become the only security to make new 52-week highs on the Toronto Stock Exchange. Ed Yardeni, the chief strategist at Prudential Financial, said consensus earnings estimates for S&P 500 companies rose to US$56.47 for the next 12 months, which is well ahead of actual 2001 results of US$45, and are seen rising 6% in the second quarter from year ago levels. Mr. Yardeni provides a good argument as to why equities continue to plumb new lows, while the U.S. economy is poised to deliver a not too shabby 2% growth in the second quarter, and Canada is on fire with expectations at 4% to 5%. "The bad news could be that some corporate CEO's may have to disclose that their earnings reports were misleading and must be revised downward. The embarrassment of doing so and the possible adverse impact on the company's stock price beats going to jail for fraud," wrote Mr. Yardeni in reference to demands that CEO's of the largest U.S. corporations sign-off on past financial statements. - - - Take your time: "There is no reason to be panicked and dumping stocks," said Morgan Stanley chief global strategist Barton Biggs. "As prices come down you should get more bullish not bearish." And while investors rightly ask where the elusive bottom will be, Mr. Biggs thinks it's here, although equities will remain in a trading range for the next couple of years. And while the strategist says history shows that the current market situation is in line with previous bubbles, other argue that the bigger the bubble -- and this one was big -- the longer it takes to pop. - - - Contract crimping: Big juicy contracts with major U.S. cellular networks drove the stock of Sierra Wireless to over $216 in early 2000. Delays in getting 'next-generation' networks off the ground pushed the stock down to the $5 level, and this week the company said it had renegotiated a US$30-million supply deal with AT&T Wireless to a mere US$6.5-million. Something is better than nothing, but we can't help but wonder if other similar deals will disappoint as the company redefines what a contractual obligation actually means. Trust the income? Yesterday's income trusts are realizing that rich dividend payments are far too generous given the malaise in equity markets. Quadravest Inc., which runs $1-billion of income-trust assets, cut or cancelled dividends on six funds, after promising 7% to 10% returns generated by buying stocks and then selling options on the shares. This follows on Mulvihill Capital Management's slashing of its Pro-AMS Trust profit distribution to 6% from 8.75%. The latest income trust craze is based on your local "casual dining" spot, and investors are gobbling up the yummy stories served up by the owners of Casey's, A&W Restaurants and Boston Pizza. AIM fund manager Roger Mortimer serves up this missive on the craze: "Restaurants are not known for their stamina ... they are not the same type of perpetual asset as the typical income trust." - - - nationalpost.com{9CA1E899-8969-4721-8F84-242477ED80FF}