Anyone lose their burro today?
All DIVE. DIVE.
All DIVE. DIVE.
Investors....come in please!
- Thread starter Last_Z
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This sucks: Canada proposes increasing taxes on trusts
Owwwwwwch!
I just GOT HAMMERED.
I just finished some KST studies on the S&P500 chart, and it looks like this is the turning point. The bear is getting loose, and it'll be several weeks before we reach a tradable oversold condition again. That's assuming the indicators (and my interpretation) are correct, and that's a big assumption..... they've been wrong before.
LR - it seems that any tiny negative news will hit hard we have seen this before....lay low until after the election.
I may go out on a limb and buy a little SBKEF
I may go out on a limb and buy a little SBKEF
I have to agree with TLR. Who knows where things will be after the elections, but a sell off if the dems win big wouldn't surprise me. In that case, I'd expect investers to change their focus on what to buy and how long to keep it.
I'm at 60% cash right now and I'll sit on it unless something pops that I can jump on. My only loser right now is GLW. I'm wondering if I should sell it. I have the feeling that I'm getting in the same mess I had with LOW.
RE; canroys, I sold AAV on the way down at 16.50 for a .57 loss. In hind sight, that looks like a really smart move.
I'm at 60% cash right now and I'll sit on it unless something pops that I can jump on. My only loser right now is GLW. I'm wondering if I should sell it. I have the feeling that I'm getting in the same mess I had with LOW.
RE; canroys, I sold AAV on the way down at 16.50 for a .57 loss. In hind sight, that looks like a really smart move.
I dumped TIFUF. 3 nega-trades this year.
I bought a little SBKEF.
I'm holding GLW like a fool.
As I stated, wait until post elections.
I bought a little SBKEF.
I'm holding GLW like a fool.
As I stated, wait until post elections.
Thanks P. Good info.
I'm looking longer term on the Canadian stocks.
This info is a proposal and I'm sure will have to get passed by their government. You have to remember that Canada has been ruled by librals who have the government all messed up. The conservatives are trying to right some of the canadian laws that were passed right before the conservatives took office.
I don't think this new tax will pass easily if at all. Again it also won't take effect for at least 4 years, and the underlying companies are still good companies. So I'm holding for now.
I have:
TIFUF
SBKEF
NOIGF
AAV
which are all 10% plus divended canadian trusts.
This info is a proposal and I'm sure will have to get passed by their government. You have to remember that Canada has been ruled by librals who have the government all messed up. The conservatives are trying to right some of the canadian laws that were passed right before the conservatives took office.
I don't think this new tax will pass easily if at all. Again it also won't take effect for at least 4 years, and the underlying companies are still good companies. So I'm holding for now.
I have:
TIFUF
SBKEF
NOIGF
AAV
which are all 10% plus divended canadian trusts.
Mike - I'm 1/2 with you. But I just think TIFUF will get hammered further. Look what happened to BRBMF - they converted back - people got killed. Anyway - otoh - SBKEF is a great deal. If you buy now - 20% yield! I think they will pop back.
Flash Alert for November 3, 2006
OH, YEAH?
We all need to get past the shock, denial and anger to
effectively explore the implications of the trust turmoil in
Canada.
By Neil George
The tax changes from the Tory-led government of Steve Harper
and Jim Flaherty has sent shockwaves through billions upon
billions of dollars in the capital markets and pension funds
of Canada just to generate a fraction more in net tax revenues
for the country.
But their actions have done and will do more harm than good for the
Canadian government if left unchecked.
So the Tories want to tax trusts? Fine. There are a few things
they may have overlooked in their headlong plunge into this
matter.
First, let's go through the tax changes and what it means for
both taxable and non-taxable investors in Canada and the US.
For those in Canada, the new tax on distributions means
virtually nothing changes. In fact, if the trusts continue to
operate as they have been, the net result might well be a tax
cut, not a tax hike.
Right now, Canadians face a tax rate of 46 percent on dividend
income. That means whether paid at the source or upon receipt,
the new rate of 45.5 percent is a tax cut on the net cash
flowing into their accounts.
It's actually the non-taxable Canadians that are going to be
hurt--again, all this is assuming some rational member of
Canada's government doesn't stop this lunacy.
Right now, the tax liability for non-taxable or tax-deferred
Canadian pension or retirement accounts is nil. And with the
new changes, the result will be a net rate of 31.5 percent.
This means the Ottawa government is hiking taxes on retirees
in their own country (including union members and other tough
voter groups) by that 31.5 percent.
This, in turn, means that the public-sector pension funds will
have to be topped off by Ottawa one way or another, given the
trillion-dollar shortfall in current liabilities. Trusts were
closing that gap helping to reduce the cost to the government
of that trillion dollars, which, if the tax law stays, will
now have to be paid.
So they take away some cash now, only to have to return it in
the pending years to come. That's not too smart.
But let's be selfish and look at the proposed new tax law on
trusts from a US investor standpoint.
If you continue to own the trusts in a non-taxable or
qualified tax-deferred account, the tax rate goes from 15
percent to 41.5 percent. This isn't good. And if the law
stands, the trusts won't work any more for non-taxable or
qualified retirement or pension accounts in the US.
The Canadians won't get the tax with the elimination of
non-taxable retirement investors in the US. Right now, 15
percent is bad but not an insurmountable burden for retirement
account investors in the US. But at 41.5 percent, it becomes a
deal breaker. US investment leaves the Great White North and
doesn't even pay the 15 percent any more.
For taxable US investors, the current deal has 15 percent
withheld, which is recoverable by Uncle Sam with a mostly
dollar-for-dollar credit against US tax liabilities, thanks to
the tax treaty between the US and Canada.
The pending legislation brings the net taxes to 41.5 percent,
which, if the trusts continue to operate as currently
structured, Uncle Sam will simply funnel the liability back to
the Canadians with the same tax credit on our IRS forms.
This means that potentially, if the trusts work their
distributions the right way, i.e., for taxable account
investors in the US, we just might have a zero impact on our
net after-tax cash flows from Canadian trust investments. And
the Canadian Dept of Finance won't get one extra net dime from
US taxpayers.
But beyond the net impact on tax liabilities, there's more
happening in the Canadian market for trusts.
With the massive selloff in trust share prices, many of the
quality companies, particularly those with quality assets and
revenue streams (which include all of our petrol and business
trusts inside the Portfolios of Personal Finance), will be
ripe for takeover.
Most of the trusts have little voting control over the net
companies, as most of the shares are trading in the public
markets. This means both publicly traded US and overseas
companies can grab some very nice companies at a discount to
their recent market valuations.
But forget about just the public companies grabbing trusts;
think private equity.
US and offshore private equity investors and funds will pick
off trust shares and pull them into their stables of big
cash-generating businesses. And with the revenues running
against leveraged debt costs, it will be quite easy to not
only take over control of Canadian companies by private equity
firms but also to run the books to cut out the Canadian Dept
of Finance from taxable profit streams.
This is what's behind some of the bouncing in many trust
shares in today's markets. And while we're not completely done
on our assessment of the trusts, the picture is clearing. And
we'll continue to pass that picture on to you as it develops.
Stay tuned and watch for further updates inside By George, as
well as via our Flash Alerts for Personal Finance subscribers
and, of course, posts on the Personal Finance Web site
(www.pfnewsletter.com) and the pending new issue of PF next
week.
OH, YEAH?
We all need to get past the shock, denial and anger to
effectively explore the implications of the trust turmoil in
Canada.
By Neil George
The tax changes from the Tory-led government of Steve Harper
and Jim Flaherty has sent shockwaves through billions upon
billions of dollars in the capital markets and pension funds
of Canada just to generate a fraction more in net tax revenues
for the country.
But their actions have done and will do more harm than good for the
Canadian government if left unchecked.
So the Tories want to tax trusts? Fine. There are a few things
they may have overlooked in their headlong plunge into this
matter.
First, let's go through the tax changes and what it means for
both taxable and non-taxable investors in Canada and the US.
For those in Canada, the new tax on distributions means
virtually nothing changes. In fact, if the trusts continue to
operate as they have been, the net result might well be a tax
cut, not a tax hike.
Right now, Canadians face a tax rate of 46 percent on dividend
income. That means whether paid at the source or upon receipt,
the new rate of 45.5 percent is a tax cut on the net cash
flowing into their accounts.
It's actually the non-taxable Canadians that are going to be
hurt--again, all this is assuming some rational member of
Canada's government doesn't stop this lunacy.
Right now, the tax liability for non-taxable or tax-deferred
Canadian pension or retirement accounts is nil. And with the
new changes, the result will be a net rate of 31.5 percent.
This means the Ottawa government is hiking taxes on retirees
in their own country (including union members and other tough
voter groups) by that 31.5 percent.
This, in turn, means that the public-sector pension funds will
have to be topped off by Ottawa one way or another, given the
trillion-dollar shortfall in current liabilities. Trusts were
closing that gap helping to reduce the cost to the government
of that trillion dollars, which, if the tax law stays, will
now have to be paid.
So they take away some cash now, only to have to return it in
the pending years to come. That's not too smart.
But let's be selfish and look at the proposed new tax law on
trusts from a US investor standpoint.
If you continue to own the trusts in a non-taxable or
qualified tax-deferred account, the tax rate goes from 15
percent to 41.5 percent. This isn't good. And if the law
stands, the trusts won't work any more for non-taxable or
qualified retirement or pension accounts in the US.
The Canadians won't get the tax with the elimination of
non-taxable retirement investors in the US. Right now, 15
percent is bad but not an insurmountable burden for retirement
account investors in the US. But at 41.5 percent, it becomes a
deal breaker. US investment leaves the Great White North and
doesn't even pay the 15 percent any more.
For taxable US investors, the current deal has 15 percent
withheld, which is recoverable by Uncle Sam with a mostly
dollar-for-dollar credit against US tax liabilities, thanks to
the tax treaty between the US and Canada.
The pending legislation brings the net taxes to 41.5 percent,
which, if the trusts continue to operate as currently
structured, Uncle Sam will simply funnel the liability back to
the Canadians with the same tax credit on our IRS forms.
This means that potentially, if the trusts work their
distributions the right way, i.e., for taxable account
investors in the US, we just might have a zero impact on our
net after-tax cash flows from Canadian trust investments. And
the Canadian Dept of Finance won't get one extra net dime from
US taxpayers.
But beyond the net impact on tax liabilities, there's more
happening in the Canadian market for trusts.
With the massive selloff in trust share prices, many of the
quality companies, particularly those with quality assets and
revenue streams (which include all of our petrol and business
trusts inside the Portfolios of Personal Finance), will be
ripe for takeover.
Most of the trusts have little voting control over the net
companies, as most of the shares are trading in the public
markets. This means both publicly traded US and overseas
companies can grab some very nice companies at a discount to
their recent market valuations.
But forget about just the public companies grabbing trusts;
think private equity.
US and offshore private equity investors and funds will pick
off trust shares and pull them into their stables of big
cash-generating businesses. And with the revenues running
against leveraged debt costs, it will be quite easy to not
only take over control of Canadian companies by private equity
firms but also to run the books to cut out the Canadian Dept
of Finance from taxable profit streams.
This is what's behind some of the bouncing in many trust
shares in today's markets. And while we're not completely done
on our assessment of the trusts, the picture is clearing. And
we'll continue to pass that picture on to you as it develops.
Stay tuned and watch for further updates inside By George, as
well as via our Flash Alerts for Personal Finance subscribers
and, of course, posts on the Personal Finance Web site
(www.pfnewsletter.com) and the pending new issue of PF next
week.
Electronic Arts ( ERTS ) shares gained 11.8% after it reported a quarterly profit that fell 57% from a year ago.McDermott International Inc. ( MDR ) shares rose 8.7% after it reported a 74% jump in third-quarter earnings, with the return of Babcock & Wilcox to the company's books accounting for the bulk of the gains.As you can see some things never change. So the chart will get you out if you know how to read it.
GLW is a screaming buy on the charts. Projected 20% eps gain for the next 5 years. Extremely oversold, I don't think it'll go any lower.....
Gasoline has bottomed out. I like VLO, APA, and SUN. Look for gas to rise after the elections Tuesday.....
Gasoline has bottomed out. I like VLO, APA, and SUN. Look for gas to rise after the elections Tuesday.....
I was thinking the same on GLW - it's down a bit this AM - but I may buy more.
My buy on COGO went off this AM!!!
My buy on COGO went off this AM!!!
Just bought some GLW myself.
I feel like I kicked the market in the nuuts today.
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