New-born Baby's Cans: Making Money in a Down Market

[New-born baby]

Canadian taxes

Doesn't the Canadian government take 15%? I know you can recover the 15% from the IRS if you have a taxable account, but what if it's in a retirement account?

And what CanRoys would you recommend with the latest oil-price retreat?

I just got this in the email today . . . sorry!
I got some disappointing news today. I called the Canadian Revenue
Agency, International Tax Division, Ottawa in hopes of clarifying some
points on their NR7-7 Refund form. Instead, I was told that as of the
January 2005 Canadian Tax Law changes, "Trust Distributions" are NOT

considered dividends, and are therefore subject to the 15% Canadian
Income Tax regardless of the type of account (IRA,etc) in which they
are held. If one receives dividends from companies other than Energy
Trusts, those dividends "can be" deductible in an IRA, but we need to

have a FORM 6166 from our IRS verifying the divys are in an IRA. I
spoke to a very nice lady in the department, but she got this word from
the "guru" of the Canadian/US Tax Treaty, David Fitzgerald. Too
bad.

[TFred]

Greetings NBB,

Thought you might be interested in this,ENT has stopped its quarterly distribution increase.They stand pat at .18 a month,which isn't bad for a trust trading at 16.70,but the fear is that cuts may be on the way.Chart from a couple months back show the market wasn't too confident in this trusts ability to keep raising.

I think 15 is possible,your thoughts?

cordially Tom

[New-born baby]

Greetings NBB,

Thought you might be interested in this,ENT has stopped its quarterly distribution increase.They stand pat at .18 a month,which isn't bad for a trust trading at 16.70,but the fear is that cuts may be on the way.Chart from a couple months back show the market wasn't too confident in this trusts ability to keep raising.

I think 15 is possible,your thoughts?

cordially Tom

Descending triangle on the chart points to $15--
Your call seems to be correct. However, with these trusts, they tend to bounce back in a few days. If you like the divy size, I'd say by Friday you'll have an opportunity to pick up some shares cheap.

But, imo, ENT is run by gangsters. I don't like them at all. But lets say you wanted some ENT shares and the divy. Sell the APR $15 calls when you buy the stock and you'll keep at least the divy.

[New-born baby]

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[TFred]

Greetings,

I did some digging as to why some trusts trade with a high yield compared to others.As far as the POR is concerned,there's more than meets the eye.Check this out.

2006 Estimated/RBC Securities
Name…….....…Debt/POR/Effective POR-includes Capex

Advantage... 2.2x 82% 129%
ARC………...... 0.9x 65% 110%
Baytex ……....1.5x 57% 95%
Bonavista….. 1.1x 72% 126%
Canetic……... 1.1x 66% 104%
Crescent…... 1.1x 66% 103%
Enerplus…... 0.8x 60% 96%
Esprit ……....1.4x 68% 104%
Fairborne... 1.0x 67% 109%
Focus …….....0.8x 70% 107%
Freehold…... 0.6x 85% 91%
Harvest….... 1.1x 78% 121%
NAL ………......0.9x 73% 113%
Pengrowth.. .1.0x 84% 125%
Penn West... 0.7x 64% 108%
Petrofund….. 1.0x 57% 97%
Peyto....... 1.1x 43% 130%
PrimeWest....1.3x 82% 144%
Progress.... 0.7x 62% 104%
Shiningbank .0.9x 93% 126%
Trilogy......0.7x 82% 117%
Vermilion....0.6x 45% 84%''

The high yield trusts are also burning the most cash,many paying the distribution through DRIP programs.I'll be watching for Baytex's IPO on the 27th,as it looks like a quality trust.They don't even consider ENT,I'll short it any time it breaks 18.

cordially Tom

[spikefader]

Hi guys

ENT I'm seeing 14.00 and then 10.00. A pop to 18.50 would be very tempting, so I'm liking your thinkin' Tom.

[New-born baby]

Tom/Spike

Hi guys

ENT I'm seeing 14.00 and then 10.00. A pop to 18.50 would be very tempting, so I'm liking your thinkin' Tom.

I wholeheartedly agree: ENT stinks, and I am going to try to take a bite out of it. These guys deserve it Having said that, $10 is only possible IF they lower the divy. 15% is probably the bottom, i.e, when the price coincides with a 15% divy, that's probably it, unless a divy cut is imminent.

Spike: I hope you'll post a short setup here

Tom: PMT.UN Payout Ratio? do you have the info?
NAV.UN Do you have the info on it?
HTE.UN ditto

Many thanks, men!

[TFred]

Greetings,

Harvest is listed above for US listing,don't know if Canadian structure is different.
The other two I will look into.This seems to explain why PTF and ERF are outperforming the others.

ENT would be 15% around 14.40 BTW.

cordially Tom

[TFred]

Greetings NBB,

I finally took your advice and hooked up with IB,still getting familiar with it,but what a change from Scottrade.Im curious if you use the pay for monthly market data on the TSX?Im very much interested in trading on the TSX,if you recall,I mentioned Kurt Wulff calling COS.UN as ''if you could own only one''.That was back around C70$.

Any other advice for a newbie to IB?I know you are the options expert,any thoughts of reopening the ''Options'' thread?As I have little experience with them on IB,would appreciate your input.

cordially Tom

[New-born baby]

Tfred

Greetings NBB,

I finally took your advice and hooked up with IB,still getting familiar with it,but what a change from Scottrade.Im curious if you use the pay for monthly market data on the TSX?Im very much interested in trading on the TSX,if you recall,I mentioned Kurt Wulff calling COS.UN as ''if you could own only one''.That was back around C70$.

Any other advice for a newbie to IB?I know you are the options expert,any thoughts of reopening the ''Options'' thread?As I have little experience with them on IB,would appreciate your input.

cordially Tom

Tom,
TSX quotes are worth the money if you trade TSX frequently. I personally love the cans as they made me a lot of money last year. I would think that your style of investing--i.e. seeking the capitol gains and foregoing the dividends--would be profitable on the TSX. In fact that is what I often do, as the common case is that the capitol gains are 3x-5x the divy.

Options: I think you should start with covered calls. That is, you buy a stock and at some point sell the call on the stock. There are many ways to play options, and I just flat out love 'em! But let me warn you that, being a newbie to the options game, that you should not sell naked calls. I really love options expiration week. Often I can buy a stock I love and sell a call on it, and to me it won't matter if they take the stock or not. I have the money. Example: NXY. Options expire on Friday. On Thursday, 5 minutes before the close, I bought the stock at $49.90 and sold the $50 call option that expired the next day for $1. They just handed me $1.10 per share for holding the stock overnight. The next day they took the shares and I made a nice overnight profit. That's how I like it.

I may post some option plays over on that thread--feel free to ask any questions you have. In fact asking specific questions would be a great place to start. So have at it, my friend

[dmk112]

NBB, maybe you can help me w/ this. I tried getting a quote for NAE-UN.TO @ ameritrade. I tried NAE.PK but no luck, I even did hte lookup for NAE and no result, do you know if the symbol is different for AMTD? thanks dude

[New-born baby]

Yup

NBB, maybe you can help me w/ this. I tried getting a quote for NAE-UN.TO @ ameritrade. I tried NAE.PK but no luck, I even did hte lookup for NAE and no result, do you know if the symbol is different for AMTD? thanks dude

AMTD has diffo symbols than other brokers because they sell the Cans as "pink sheets." I don't know what their symbols are--I am sorry. If you want a quote of any can, you could use this site . Quotes are delayed 15 minutes, though. The symbol here would be "nae.un."

[dmk112]

AMTD has diffo symbols than other brokers because they sell the Cans as "pink sheets." I don't know what their symbols are--I am sorry. If you want a quote of any can, you could use this site . Quotes are delayed 15 minutes, though. The symbol here would be "nae.un."

Thanks but how do I buy it then?? Would I need to contact Ameritrade directly by phone?

[New-born baby]

Sorry

Thanks but how do I buy it then?? Would I need to contact Ameritrade directly by phone?

No, you can punch in the symbol on Ameritrade and buy the stock directly. Doesn't Ameritrade have a symbol look up function? I have never had Ameritrade so I don't know. But Scottrade does, and so does IB. If Ameritrade does not have this function, then perhaps a phone call to Ameritrade would reveal the correct symbol.

I am sorry that on this question I was not more help to you. I just don't know.

[dmk112]

No prob, thanks NBB.