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

To: bill who wrote (4208)	9/15/2002 4:22:53 AM
From: Peter W. Panchyshyn	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. ---- But what one can surmise from the historical facts is the following that since oil prices have cycled between $10 and over $30 over the past several decades. Its a good bet that that very same cycling will at least continue into the foreseeable future. Maybe even be slightly skewed to the higher end since we are talking of a diminshing resource and an ever increasing demand. So then how best to play that cycling nature by my strategy. YOU DECIDE. ---------- All I can do is read analyst's reports and choose the companies likelyto have the most upside and the least downside. ---------- That is not all you can do. You can tailor your own strategy to deal with the longer term future which will be much like the longer term past ---------- 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. ------ All these are short term concerns which only cause the hills and valleys in the flow of the prices (oil as well as trust). If you wish to be concerned and worried and nervous about the short term. Then you do short term things (like trade) and then you get caught (sideswipped) from time to time and suffer the consequences of doing the wrong things at the wrong times for the wrong reasons --------- It comes down to what I have said before. Do you act with the flow of events? Or do you react? You act to pick up more at lower prices. Knowing prices recover because that is what they have allways done. You react because of fear things get worse or go lower. Kicking yourself afterwards because prices recover and you missed the boat. Or sold at a loss when you did not have to in the first place. ----------------- 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. ------- Again all short term concerns which in the longer term are nothing but valleys in the charts.------------- 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. ----- Your making simplified assumptions or conclusions to much more complex events. For example we have seen rates in CDA rise 3 times already. That was suppose to have killed the REITS. Though some did take dips afterwards many are still now at highs. A simplistic conclusion like yours would say that can't happen. But real world it does.---------- 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.