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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: chris714 who wrote (36011)	7/11/2003 2:29:02 PM
From: Seeker of Truth	Read Replies (2) \| Respond to of 74559

REI.UN and CAR.UN are interesting. The yahoo symbols are rei_u.to and car_u.to respectively. Unfortunately they are trading at or near their all time highs. The stocks tend to drop by about 5-6% when they sell new shares(units) in a bought deal to an underwriting group. So you could place an order well under the market and wait a few months. I think that one reason for the recent rise in Canadian REITS is that people think that a law will be passed making it explicit that the shareholders(more correctly unitholders) are not responsible to the creditors if the company goes bankrupt. In other words the REIT would give a corporation like protection against lawsuits. However, there's some question in my mind if this law will ever pass. The trust model is extremely attractive to bruised investors so the non-trust companies will and have endeavoured to stop this legislation. When it gets clear that there are two sides to this highly political issue the trusts may decline in price somewhat. I'm salivating at the prospect because I would like to buy more of these two at substantially lower prices myself. As for the risk that they will go bankrupt and some creditor will chase you, I think that's like putting a large sum in a bank account, such some or most of which is not guaranteed by the government. You simply have to know the bank, right? Here you have to know the trust.