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

[df21084]

thanks for the response -- looks like the next ex-dividend date is at the end of the month, so i might buy in the beginning of february.

again, thanks!

This leads me to another question. Does the unit price drop by the amount of the dividend every month, like stocks do when dividends are paid? The payments really aren't dividends, right?

[Websman]

The last time I daytraded I was at the Trump Plaza in Atlantic City. I traded $400 all in a day. Boy ... that was brutal.

But the beer was free!

I like the free strawberry daquris I get in Biloxi. There's nothing like getting a free buzz when your playing nickle slots!!! yea...I'm a cheapskate...lol

[New-born baby]

Does the unit price drop on ex-date?

Does the unit price drop on the ex-date?

Answer: NO--YES--well, what I mean is this:

NO--not officially. There have been times that the unit price hasn't dropped at all, and has even gone up on the ex-date.

Yes--over the NORMAL course of things, the stock opens at yesterday's close, and quickly falls the dividend amount, or even twice that amount the first hour. Then it works its way back up and usually finishes the day down about the divy amount. The next two days it usually loses a few more cents, and then for the rest of the month it starts working its way back up again.

Remember this: if it drops a few cents on you, you are getting a check every month to pay you, and in a short time you should be plus on every Can I have recommended to you.

And if you said you were going to wait until February to buy, well, you can if you think that is best. But right now is a good time to buy, too. I could be wrong, but I don't think you'll get hurt by buying any one of those I mentioned.

[New-born baby]

Buying Cans

Dear Reader,

Today is Jan 10. Today would be a good day to buy a Can. Why?

Because if you'll note, the 27th of last month, AY.UN was 12.00 per share. Today it is 11.70. It should work its way up to 12.00 or so by next 27th. It has done this for the last 3-4 months in a row. The same can be said of NAE, AE, PMT, etc. Just look at the price charts on the TSX.COM.

But what if I am wrong? Well, AY is paying you .16 per month, how long will it take you to make up any drop in price? Let's say she does fall all the way to the low of the year, 11.23 I think. You are talking less than .50 Canadian, or .40 USD. The divy will cover it in 3 months.

Good investing to you!

[New-born baby]

Exchange Rate

Prospective Can investors,

If you buy Cans on the TSX (Toronto Stock Exchange), then you'll buy them in Canadian dollars. That means you'll have to exchange USD for CD. How is that done, and how can you benefit by the process?

It is done automatically through your broker. When you give him the order, he does the exchange for you. But you can visit www.xe.com and see the current exchange rate. It changes instantly, by the 100,000ths of a dollar. In previous posts I said I invested initially in June at .724002 USD per 1.00 CD. This morning the exchange rate was .822028 USD per 1.00 CD. If you had heeded my advice yesterday (1-10-05) and bought some Cans, you'd be up not only in unit price, but also another 1% due to the exchange ratio.

The long term prospects of the USD is ("they" say) to decline more. Why? The gov't spends more than it takes in, and thus prints more money. Until that can be stopped (be realistic!), it seems likely that the currency will continue to drift lower.

[df21084]

More great information. Thanks New-born.

I'm not able to buy anything right this minute, but I really think either AY.UN or AE.UN will be my next purchase.

I'm going to talk to my two boys about taking some money out of their savings accounts and buying one of these. They're minors, and they don't have much money. I'm thinking of something like a $1000 investment for each.

I've been trying to get them to understand how they'll never grow their money by leaving it in the bank earning a whopping 1% APY. I'd like them to see their monthly statement with a nice 1%+ monthly increase instead of annually. I'd love to hear what others think about this.

[New-born baby]

5 children in AY

DF

I put each of my five children in AY.UN. They are ages 11,9,7,5,&2. They did very well. Every child I have works. Even my 2 year old have 8 newspapers to deliver. Then they tithe to church, save almost all of the rest back, and spend very little. I think your children will do well with AY.UN.

AE is a safer investment (imo)--but I am not God, and therefore, not omniscient about what tomorrow will bring. But I think you'll do well in either one of these.

God bless you and yours.

[df21084]

Another question

Do you reinvest the dividends from these trusts, or do you use the proceeds for other investments?


It doesn't appear that Scottrade has an automatic dividend reinvestment option. So at $27 per trade, that can get expensive. Does Interactive Brokers offer automatic dividend reinvestments?

Thanks. And God bless you and yours too.

[New-born baby]

automatic reinvest options

DF,

Only some trusts offer that option to Americans. That's right. Most trust discriminate vs. USA residents. However, there are a couple of things you can do:

1. I save up my divys and reinvest them where I desire to put them at the time. I like to buy 1000 shares at a time to save commision costs. If you dealt with Interactive Brokers, that would not be an issue as the first 500 shares are .02 CD, and .01 for all shares on the TSX after that. So 1000 shares is 15.00 Canadian, or about $12 USD. Be aware that Interactive Broker charges a $9.50 fee/month for streaming quotes from TSX. If you make many trades, like I do, it is worth it.

2. $27 at Scottrade does NOT have to be. I called my broker and told him I was jumping ship to Ameritrade for 10.99 trades. He asked if I was dissatisfied with the service. I said no, I love Scottrade, but at $16 more per trade, commisions become expensive. So he said he'd match Ameritrade to keep a customer. You might ask your Scottrade rep if he'd do the same. I know that they do this in Madison, WI, as well as Greenville, SC.

Feel free to ask me any questions you wish. I'll be glad to direct you in any way that I can.

[Thomrich]

Greetings New -born,
I did some DD on EENC and PGH as those are the ones I usually trade.If you use yaho historical price feature,approx 5-7 days after distribution is when you see the dip I was mentioning,often it will repeat at day 9and 10 to a lesser degree.

As an example EENC pays .14 monthly,and is rising,which should give stability.Last month it sank to 16.19 5 days post dist. and before the next dist it climbed to 19.
Obviously you wont catch all that,but 1.00 is achievable ,which would be 6+mos dist.in less than 2weeks.

The beauty of it is if it doesnt rise you can still hold for the dist and play the next month.

Downside is some large newsletter services have caught on,Tobin Smith to name one,they have started rotating from one to another in groups,upsetting the regularity of the timing.

Ill keep you up on any future swings Im eyeballing.

BTW increased distributions should start materializing from new oil prices replacing old hedges at 30bbl.

cordially Tom

[New-born baby]

Beautiful setup

Thomrich,

Thank you! Nice setup. I'd like to play it this time around if I can. I appreciate the heads up.

[spikefader]

EENC pattern and channels.

[New-born baby]

Eenc

Spike,

You're the greatest chartist alive! Thank you!

[New-born baby]

Exchange Rate

Investors,

The US trade gap widened to a record $60B this past month. The exchange rate responded by jumping from .81 to .836411. If you were already invested in Canada, you just gained 2% on your portfolio.

[New-born baby]

Thomrich

Thomrich,

Who is your broker? Ameritrade? I wondered because if it was, you would have a larger US selection of Canadian stocks via pink sheets.