What did you buy? What might you buy? (2008)

Discuss your favourite picks, broker, and trading or investment style.
JaydoubleU
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Post by JaydoubleU »

Bought some more TRP.
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adrian2
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Post by adrian2 »

DavidR wrote:Looks very interesting adrian2, thanks for posting.
Thank you for your accounting expertise shared with us here - hope this works out for both of us (bought it today around $12).

BTW, another round of thanks to Mr. Hymas and the Assiduous Readers of him for uncovering YPG.PR.B (a bit early maybe, but patience is a virtue).
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Post by biker »

adrian2 wrote:
Joe Clarke wrote:YLO
A bit safer is to buy YPG.PR.B, which is a retractable preferred with 8.5 years to go.

Back of the envelope calculation, for 8 years you get a little more than 10% in yearly dividends, plus almost 10% annual capital gains until retraction at $25. Round numbers, 20% per annum for 8 years for something that's more senior to the common issue (i.e. the income trust).

If you're gutsy enough, invest $100k to get $400k in 8 years.
I understood that the retractable date was Dec/2012 ..4 years from now?
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Post by bindexit »

Opened small position in HOU (Oil bull ETF)- just above $3.00

Reasons:
-Look at HOD (Oil bear ETF) in these posts when oil surpassed $100. I traded in and out of HOD as I thought oil was too high. For those who had the conviction, foresight, or cojones to keep saying "OIL IS TOO HIGH" AND HOLD HOD until recently, KUDOS TO YOU!! It was below $10 in summer and recently above $50....a 5 BAGGER!!!
-I can't assess where the bottom for oil prices will be but I'd say we're a lot closer here than at $147!!!
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adrian2
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Post by adrian2 »

biker wrote:I understood that the retractable date was Dec/2012 ..4 years from now?
That is for YPG.PR.A - the B series go until 2017/06/30.

See the source.
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DavidR
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Post by DavidR »

adrian2 wrote:Thank you for your accounting expertise shared with us here - hope this works out for both of us (bought it today around $12).

BTW, another round of thanks to Mr. Hymas and the Assiduous Readers of him for uncovering YPG.PR.B (a bit early maybe, but patience is a virtue).
Glad to be able to contribute when I can.
I bought some around $12 too -my first purchase of prefs - I figure they probably have more upside than YLO, athough a lower yield for now.
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Post by Sensei »

Just for a change of pace:

BP at 45.50 (maybe a bit high?)

Sterling company and yields 7.4% and the cash to cover it. It also pays quarterly unlike most UK companies.

I'd like to be buying Canadian, too, but no cash :(

Cheers
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Post by biker »

adrian2 wrote:
biker wrote:I understood that the retractable date was Dec/2012 ..4 years from now?
That is for YPG.PR.A - the B series go until 2017/06/30.

See the source.
Thanks. Picked up a bunch this am at $11.30
Last edited by biker on 10 Dec 2008 15:19, edited 1 time in total.
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FranksFinancials
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Post by FranksFinancials »

Bought YHOO! :P
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Post by FranksFinancials »

One stock I was looking at was TEX. I could have got in around $10.00 but hesitated, now I think I may have missed the boat. Anyone here follow this stock?
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Post by Michael D »

Sensei wrote:Just for a change of pace:

BP at 45.50 (maybe a bit high?)

Sterling company and yields 7.4% and the cash to cover it. It also pays quarterly unlike most UK companies.
Not too high...compared to my ACB :cry:
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Post by Joe Clarke »

adrian2 wrote:
Joe Clarke wrote:YLO
A bit safer is to buy YPG.PR.B, which is a retractable preferred with 8.5 years to go.

Back of the envelope calculation, for 8 years you get a little more than 10% in yearly dividends, plus almost 10% annual capital gains until retraction at $25. Round numbers, 20% per annum for 8 years for something that's more senior to the common issue (i.e. the income trust).

If you're gutsy enough, invest $100k to get $400k in 8 years.
Thanks for bringing this to my attention, this subject will be on my research list.

Not to be shy though, I'll "speak out" before I do my research. Assuming YPG is an operating entity of the YLO trust, why would their quasi-debt be a "safer" investment than holding the trust units? The underlying operating entities supporting the cashflow are the same.

I don't think it's accurate to describe the preferreds of an underlying operating entity as being more "senior" than the trust units of the holder. Surely both are "manageable" by management. What about liquidity - quarterlies vs monthlies - this is not necessarily straightforward.

Also, there is potential cap gain in the trust units.

Thanks for this.
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Post by Joe Clarke »

Ok. I've done some research on this YLO - YPG.PR.A and YPG.PR.B question and this is what I find. Very interesting.

According to the YPG financials (which are consolidated, of course so it's about impossible to shakeout hierarchies betwixt YPG and YLO) the Series "A" preferreds (YPG.PR.A) mature 12/31/2012 and the Series "B" preferreds (YPG.PR.B) mature 12/31/2017.

My envelope math gets this for me...

YPG.PR.A yields $1.0625/yr or $4.25 to 2012. Closed at $17.75 today - 33%/annum total return to 2012

YPG.PR.B yields $1.25/yr or $11.25 to 2017. Closed at $12 today - let's call it 34%/annum to 2017.

YLO.UN yields around 18% at today's close with quarterly "dividends" and carries significantly greater liquidity than the preferreds. Cap gain/loss opportunities are ignored.

Different investment vehicles for different purposes, I suppose. I'll stick with YLO for now. Not sure I'm comfortable with the greater "horizon" risk of the preferreds.

With the preferreds, 80% and 70% of the gains are postponed until 2012 and 2017, respectively for the B's and A's. That's a long time to hold out for cap gains on what is arguably a dot.com enterprise.
Last edited by Joe Clarke on 11 Dec 2008 04:24, edited 1 time in total.
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patriot1
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Post by patriot1 »

Er, the horizon of the trust units is infinite. They're straight equity.
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Post by Joe Clarke »

patriot1 wrote:Er, the horizon of the trust units is infinite. They're straight equity.
Yeah, but the trust units are much more liquid than the preferreds. The point I was trying to make is that the returns are much further out on the horizon with preferreds vs. units.
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adrian2
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Post by adrian2 »

Joe Clarke wrote:My envelope math gets this for me...

YPG.PR.A yields $1.0625/yr or $4.25 to 2012. Closed at $17.75 today - 33%/annum total return to 2012

YPG.PR.B yields $1.25/yr or $11.25 to 2017. Closed at $12 today - let's call it 34%/annum to 2017.
Check your envelope (or spreadsheet / calculator) - mine is closer to 20%.
Joe Clarke wrote:With the preferreds, 80% and 70% of the gains are postponed until 2012 and 2017, respectively for the B's and A's.
Not necessarily - if / when the market realizes what's going on, it won't wait until the last day to bid up the price.
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Post by scomac »

adrian2 wrote:
Joe Clarke wrote:With the preferreds, 80% and 70% of the gains are postponed until 2012 and 2017, respectively for the B's and A's.
Not necessarily - if / when the market realizes what's going on, it won't wait until the last day to bid up the price.
Agreed. It's really quite easy to envision a relatively rapid appreciation of the "B" preferreds by as much as 50%. In fact, I would expect that the preferred shares will move more-or-less in lock step with the trust units thus mitigating any advantage that JC is implying.

[Disclosure] I own YPG.PR.B shares.
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Post by brad911 »

Added to my position in CUF.UN
Triage Investing Blog - A Source for Value & Dividend Investing and Business Fundamentals
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Post by Rickdl »

adrian2 wrote:
Joe Clarke wrote:My envelope math gets this for me...

YPG.PR.A yields $1.0625/yr or $4.25 to 2012. Closed at $17.75 today - 33%/annum total return to 2012

YPG.PR.B yields $1.25/yr or $11.25 to 2017. Closed at $12 today - let's call it 34%/annum to 2017.
Check your envelope (or spreadsheet / calculator) - mine is closer to 20%.
Err...so which is it? for YPG.PR.A ? It yields $1.0625 per year in dividend payments, and in 2012 it's retractable at what value? $25 ? so based on current yield and the 2012 date, what return would you get per year?

Plus those dividends get the canadian tax dividend credit right?
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Post by Joe Clarke »

adrian2 wrote: Check your envelope (or spreadsheet / calculator) - mine is closer to 20%.
...if / when the market realizes what's going on, it won't wait until the last day to bid up the price.
Yes, you are right - that'll teach me to run numbers at 1:00 AM. It's more like 20% on the B - less on the A.

As to the market seeing the brilliance of the math and bidding up the preferreds. Yeah I've been beaten up a few times because the market "just doesn't get it", I have a hard time investing on that contingency.

As to the return - this makes it dead simple for me, no contest. I'll take the trust units at 18% with monthly cash flow and huge liquidty vs. lesser, delayed gratification with the preferreds.

I see the investment risk as being almost identical between the trust units and preferreds. This is not a brick and mortar enterprise.
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Post by jay »

RY, SAP and T.A, close to their 52 week lows
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Post by Rickdl »

Joe Clarke wrote:
adrian2 wrote: Check your envelope (or spreadsheet / calculator) - mine is closer to 20%.
...if / when the market realizes what's going on, it won't wait until the last day to bid up the price.
Yes, you are right - that'll teach me to run numbers at 1:00 AM. It's more like 20% on the B - less on the A.

As to the market seeing the brilliance of the math and bidding up the preferreds. Yeah I've been beaten up a few times because the market "just doesn't get it", I have a hard time investing on that contingency.

As to the return - this makes it dead simple for me, no contest. I'll take the trust units at 18% with monthly cash flow and huge liquidty vs. lesser, delayed gratification with the preferreds.

I see the investment risk as being almost identical between the trust units and preferreds. This is not a brick and mortar enterprise.
What are the formulas used to give you that 20% ?

I'm thinking due to tax differences if you're outside of an RRSP. The difference between 20% (preferred) and 18% (normal-unit-yield) is probably bigger.

Since the 20% is partially capital gain, and partially divs that are taxed lower due to canadian dividend tax credit? i.e. I think on just the yearly ypg div yield versus ylo div yield, on one if you're at the highest marginal rate you'd be taxed around 24% while the other more around 46%, again going with highest marginal tax rates.

Then on the capital gain side with the YPG you're again taxed lower than the YLO. So trying to calculate what my real-world-differences would be.

Granted I'm not taking into consideration possibility of YLO div increases or share-price increases (or the reverse, decreases)
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Norbert Schlenker
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Post by Norbert Schlenker »

Bought TCA.PR.X @ 40.60 this morning. Funded by selling TCA.PR.Y @ 41.00.

Cash in my pocket, dividend income unchanged, tax loss booked. It's been a busy few months doing things like this.
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Post by bindexit »

Altagas Income Trust (ALA.UN) mid $14s

Reason:
-redeploying gains from sale of HOU
-rebalancing portfolio for weighting in trusts
-instead of adding more XTR, decided to choose individual name
-copycatted choice from top weightings in mutual fund portfolios
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Post by FranksFinancials »

A noose :P
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