SafetyinNumbers

Hey Viking, that podcast was 11 months old so keep what you heard in context.

Most stocks not in an ETF

Rent is still actually pretty cheap. Cap rates are between 2-3%.

The cost of living is being driven up but apparently not enough to raise rates.

I thought CHMC insurance is only applicable if the LTV is more than 80%?

As a debenture holder, I can see why they offered as much as they did. With no bank debt here, its not a bad result for me to get stock for my debentures at would surely be a price much lower than this. Deb holders would end up with substantially more than half the company (which is what the result basically is of full conversion above $1.25). ZAR has less leverage on the deb holders than if there was a bunch of bank debt, like in the TBE.DB case. Speaking of which, there seems to be a constructive resolution for the TBE.DB, but not sure exactly what it looks like.

Not sure how much you can read into that. Bank employees just had options vest following their year end on October 31 and were granted new options so it makes sense they would exercise and sell.

That is true and there also may be a bump if there are some holdouts in the various classes. On a broader basis though, this looks very smart from a corporate basis as it directly transfers EV from preferred to equity, all else being equal. It also makes TA easier to take over. Which other preferred share issuers could follow suit?

Could the sell off be related to the DC.PR.B being a rate reset compared to the floaters DC.PR.D? I can see the market expecting a premium on a floater if rates are going to increase. What's weird is if you look at both price charts, the D's were sold off last year around this time even though the interest rate picture was more or less the same. I think the D's sold off hard last year because of the liquidity concerns that came about with the proposed extensions of the C's (now E's). But you are right that the spread between the B's and D's should narrow as we get closer to reset.

I've anecdotally noticed the narrowing of spreads between some floaters and their rate-reset pair but others have remained stubbornly wide. As I think rates likely don't go lower I like the idea of being long a floater with the option to convert to fixed for 5 years. With the spreads being so wide in some cases that it adds 3% to your annual returns. I'm long AZP.PR.C, FTS.PR.I and AIM.PR.B with that strategy in mind. I used own DC.PR.D as well but I'm so frustrated with their performance (the underlying company, not the pref), I sold it, perhaps irrationally.

I've noticed anecdotally in Toronto, that condo cap rates (rental income less expenses / price of condo) are running around the 5 year mortgage rate and prime rate. I think it's important to look at the cap rate for an investment decision versus the cash flow as it seems people are willing to run negative cash flow because prices have continued to rise. Recently rents are really on the rise to catch up to prices and I suppose we'll see if higher prices can be sustained by the market. Full disclosure, I'm a renter who has been wrong on prices in Toronto for almost 10 years!

Thanks Scorpion. I wish I could predict my yearly capital gains ahead of time!

I figure a lot of people on this board make tax instalments or are CA/CPAs so please share your view. I have paid instalments for the past few years and historically it has worked out so that I have a small amount owing or a decent sized refund. This year (knock on wood), I'm looking at a payable more than twice my instalment and I'm wondering if there is any advantage to topping up my December instalment or will my future required instalments be unaffected if I do so?

Pete C, Did you buy the GMP pref? I own some of the TA pref on the potential lift from a takeover but I'm also cognizant that any takeover might leave the pref orphaned. Most buyers, however, will have a better credit rating so the spread may tighten anyway resulting in capital appreciation.

I think Dundee invested about 31m US in total but they did it back when the CAD was more equal to the USD. Its been marked up because because of some equity raises at higher valuations (IFRS). This study was negative and there might be some upside still but there will likely be another money raising round at a down valuation study to fund a monotherapy trial. It's not a write off but its disappointing for sure. There is another potential catalyst this year from an investment in Android Industries. They have it marked at about 2x EBITDA on the books so there is potential for upside of maybe $1/share to NAV. Its equity accounted for so there has been no mark up.

It still seems like there is decent upside in the ZAR bonds with them trading at 80 and 11 months to maturity. They can call them anytime and there is a change of control provision that would require them to offer par if they get taken out.

Apparently Dundee Acquisition is close to a deal. This could be worth 50 cents to NAV. http://www.theglobeandmail.com/report-on-business/streetwise/closing-in-on-a-deal-to-break-spacs-silence/article30998140/ TAUrx catalyst is next week as well. Could be a big week!

I think that was the formation of DPM you are referring to back in 2004. I believe they did pay out the management contract in stock but it went to Dundee Corp the parent and not to the management directly (although they own a lot of Dundee Corp). That doesn't make it better if you were a DPM shareholder but an important distinction if you are investing in Dundee Corp.

Yeah maybe. I don't know anything about Malaysian equity markets. I would assume $30bn market caps makes it one of the biggest companies there so maybe some big fish small pond effect.

Thanks bskptkl. It's interesting how much press Genting is getting on this. They are a much bigger company with a bigger stake but its much more relevant to DC because of the relative size of the stake to market cap. http://www.theedgemarkets.com/my/article/all-eyes-gentings-taurx-wager

I decided to get exposure to this TauRx catalyst on July 27 by buying the August 9 calls. I'm not much of an option buyer as usually I have no idea when the market will begin to appreciate the value that I see. However, with this being a potentially giant under the radar catalyst, I figured the downside in the equity on a negative result might be bigger than the premium paid. I continue to own the Class D prefs as well. Anyone else involved?

Do you have a source for this information because I don't believe it's true nor can I find any evidence to support it. Say what you want about how high taxes are in Canada but the rules ar usually quite logical. Also, contributions and withdrawals from your TFSA are not recorded anywhere on a Canadian tax return. If you have evidence of this as well, please provide it.

I don't think so. I'm sure they will highlight the NAV north of $15 and of course they have a decent amount of gold and oil investments which have rallied in the past few months and weren't really reflected in the stock price. I have also heard that TauRX will put out its phase III results on July 27 in Toronto during the Alzheimer's conference being held that week. If you missed it or are taking profits on DC.A you might want to buy the preferred, DC.PR.D instead. Big yield and a chance for credit spread to decline as NAV discount closes.

Good size move today, up 12.5%, ahead of the AGM on Monday afternoon. Is anyone attending?

The bank has zero risk here don't they? They would have to get mortgage insurance so either MIC or CMHC would be on the hook.