Larry MacDonald, author of books on Nortel (TSX: NT) and Bombardier (TSX: BBD.SV.B) and frequent contributor to MoneySense magazine, writes the Investment Ideas blog for Canadian Business magazine. The blog has been in existence since January 2006 and Mr. MacDonald posts frequently “to share facts and ideas that are by turns enlightening, entertaining and, yes, profitable”. Recent posts dealt with diverse topics such as rising short-term interest rates, how growth stocks may be the new value, how the party may be over for income trusts and dividend stocks etc. Sadly, Canadian Business does not provide a RSS feed.
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5 responses so far ↓
1 Larry // Mar 14, 2006 at 8:52 pm
I believe a day of reckoning is coming for income trusts. As we approached the last federal election and there was controversy about the future tax treatment of distributions was in question, I sold all my positions. I had already lightened up considerably due to the rising valuations.
in 2003 and 2004 Income trusts made up a substantial portion of my portfolio, about 30%, and I was happy about that, with an average 8% yield.
Riocan, which is the premium REIT in Canada, could be purchased with an 8% or better yield. Today, it sells for a 5.6% yield.
Yellow Pages, the premium business trust, sells for a 6% yield.
I believe these valuations are unsustainable and looking forward to adding both back to my portfolio when more reasonable valuations return.
2 Canadian Capitalist // Mar 14, 2006 at 9:45 pm
Larry: Thank you for your comments. I don’t have any positions in income trusts. I want to add REITs but I am waiting for prices to come down. I don’t plan to add any business trusts or oil and gas trusts as I prefer stocks that reinvest at least a portion of earnings to grow their business.
3 larry macdonald // Mar 18, 2006 at 10:37 am
Thanks for the reference to my blog. I check in on your blog regularly and like the layout and content (also, to avoid possible confusion let me say I am a different Larry from the one in the first post on this thread).
4 Canadian Capitalist // Mar 18, 2006 at 8:10 pm
Thank you for visiting my blog and your comment. I regularly read your blog and your columns on MoneySense. And thanks for mentioning my blog last year in a MoneySense column.
5 gowri // Sep 19, 2007 at 5:07 am
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