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

To: russet who wrote (4207)	9/15/2002 3:29:08 AM
From: bill	Read Replies (1) \| Respond to of 11633

It's not a matter of O&G trusts. It is a question of PWI.UN. I own a number of O&G trusts, probably more than I should. The debate about the price of oil and gas is way beyond my ken. I attended a luncheon two days ago where the speaker was one of Canada's top oil and gas experts. He, too, made the point that while there are trends, very large questions remain about the future re reserves, replacement, price, political effect, etc. He claims that there may be as much oil in Afganastan as in Saudi Arabia. The talk was 1.5 hours and packed with information. Since even the experts don't know the likely course of oil prices over the next 12-24 months, I can't possibly know either. All I can do is read analyst's reports and choose the companies likely to have the most upside and the least downside. How much is the war premium on a BOE? I don't know. If the US attacks Iraq, what will the effect on the price of oil be? I don't know. I've read papers that say little or no effect to papers that say 40 dollar a barrel. At the moment I'm tempted more by NG weighted trusts than oil simply because of the unknowns. OPEC? To cheat or not. Russia? Are we in a recessionary economy? Etc. On this thread, I expect we know most of the variables. You are right, PWI.UN, at the present price, as opposed to the price I sold at and converted to AVN.UN is providing an extraordinary yield. How low can the price go? That depends on yield. If they drop the yield, the price will go down. If they don't, the price will cycle back up because a lot of the trusts are paying ten percent or less. If people are willing to buy a ten percent yield from PWI.UN, the price will jump and Peter, quite rightly, will chide me for not hanging on and adding more at this price. I owned PWI.UN. I loved the dividend. But, with the information that I had, it seemed sensible to switch to another trust. The future may prove me wrong. Let's wait and see. Someone bought those shares. They thought they were a good buy. If we all made the same moves, there'd be no market.

To: russet who wrote (4207)	9/15/2002 4:29:19 AM
From: Peter W. Panchyshyn	Respond to of 11633

I think too many people view oil and gas royalty trusts like oil and gas stocks,...which really they are not. They have the best quality reserves, and buy those reserves at a considerable discount to future cashflows. Most fields the reserves are in have considerable potential to increase in value with future drilling and re-working of existing wells. This is a play on the future,...if you think oil and gas prices will significantly decline in the next 10 years, ignore oil and gas trusts,...but if you think the prices will level out or increase and you are being paid 15-20% to hold,...the decision is simple unless you think you can consistently make 20% per year for the next 10 years in something else. ------- Excellent input !!!!!!!!!!!!!!!---------------- If you can make more,...please share that knowledge with the rest of us. ------- A simple enough request. I just think that you may have it directed at the wrong person(s) (ie RON, LORNE, GRAHAM)------