Canadian Royalties Revisited

Posted on November 23, 2006 by Nirav

A few weeks ago, I cursed the Canadian Finance Minister for causing my CanRoys to drop significantly overnight. I may have been premature in cursing him.

I originally bought them for the dividends that they were paying out, mostly in the 8-12% range, with the occasional one paying out 13-14%. However, the severe drop in prices caused their yields to jump proportionately to 12-17%. One of the companies I bought became a 19% yield! Even if Flaherty’s taxation of dividends became true, it would still be 4 years away and by then you would’ve gotten nearly 80% of your money back. Last week money started flowing back in Canroys. I picked up a little more on margin. The one I picked up, AAV currently gives a 17% yield. So even if I have to pay 9-10% margin interest I’m still ahead by 7%. Plus if Oil & Gas prices continue to rise which I think they will I’ll see some capital appreciation.

There are a few Master Lease Partnerships in the US that are like Mutual Funds of Energy Stocks. They only pay 6% dividends however the divis are considered return of principle and thus are not taxed!!! Pretty sweet deal if you ask me.

Timeshare Buyer or Victim?

Posted on November 10, 2006 by Nirav

Yesterday, I spoke to one of my friends after a long time. I found out that he had just purchased one of those Hilton timeshares that I had mentioned in an earlier post.

He was taken in by the high pressure tactics and the temptation of exotic vacations! He’s now suffering from buyers remorse.

Like they say, “Invest in haste, repent at leisure“.

Well if any of you are interested in spending $20,000 on a hotel room, let me know. I’m thinking of putting together my own version of a timeshare.

We buy a small house in Nicaragua for around $120,000. Its atop a mountain next to a nature preserve with lovely ocean views. It has running water and solar power. Its no Hilton with conceirge, but instead of 52 partners, you might only have 12. Plus you get to deduct the cost of your surfing vacations, because you’ve bought an investment property! It should rent out sporadically to cover the cost of maintenance. If Nicaragua does a quarter as well as Costa Rica, it should atleast double in value!

Or if you really want to buy your own timeshare for as low as 1 cent on the dollar, check out my Timeshare store for the cheapest deals.

Dollar May Weaken

Posted on October 30, 2006 by Nirav

I regularly read the ‘Daily Pfenning’ by Charles Butler of Everbank.com.

Today’s issue was especially bearish on the dollar.

The Yen finally started to move back up hitting a one month high over the weekend on speculation the Bank of Japan report tomorrow will show an improved economic outlook. The BOJ will make their rate announcement tomorrow before releasing a semi-annual report that will outline the bank’s forecasts for prices and the economy. Any hint at higher rates before year end should propel the yen back toward 110.

Other Asian currencies gained last week also, with the Thai baht rising to a seven-year high. Thailand’s central bank raised its growth estimate for next year to between 4.5 percent and 5.5 percent from a previous forecast of between 4 and 5.3%. It also lifted its prediction for export growth this year. While the gains in the Singapore $ were met with possible intervention by their central bank, the Bank of Thailand governor said the central bank would let the markets do their job in stemming the rise. So it looks like we have a green light for further increases in the baht.

The Australian dollar also had a good week with several reports showing the Asia-Pacific regions growth is picking up. Retail sales rose .5 percent after climbing .3% in August, and building approvals started to rise again. Australia’s economy added more than 200,000 new jobs in the past five months, sending the unemployment rate to a 30-year low. Things continue to look up for the Australian dollar, a currency which continues to be one of our favorite.

Finally, India’s central bank will likely raise interest rates for a fourth time this year as record economic expansion and loans growth stoke inflation. Expect a quarter point increase in interest rates tomorrow, which should strengthen the rupee. Many reports are now expecting the Rupee to strengthen to 44 by year end.

As previously mentioned, I bought some Australian Dollars and a Japanese REIT. A strengthening of the Yen will boost the value of my REIT, which buys apartment buildings in downtown Toyko.

I’m willing to share the info on the Japanese REIT with anyone who makes 10 posts on The Weekend Investor. Talk about a shameless plug!!!!

Gold was also up today. Its not too late to buy some and hedge against the devaluing dollar!

Invest In Porn!

Posted on October 28, 2006 by Nirav

While reading the recent issue of Business 2.0, I came across an interesting article on investing in the Porn Industry. Apparently there’s this company called Adultvest that puts investors and porn industry businesses/people together. Kind of like Prosper !!!

I decided to check it out. Its a very fancy website [after all, porn sites are cutting edge in terms of web technology] and it lets you sign up depending on whether you’re an investor or you need funding for your Adult entertainment business.

I signed up as an investor, and they promised to send me investment opportunites.
Lets see what I get. I’ll post when I get something.

Only accredited investors are allowed to sign up but that easily achieved. Just say yes to the questions on whether you’re accredited and suddenly you are!!!!!

Check it out. The site is totally Safe For Work. There’s no adult content on it.

Anway, I got a kick out of their ad banners.

Here are some of my favorites!

Check out the bull’s shadow.

The porn industry makes a ton of money. I used to work for a company that was bought by Akamai Technologies. We used to provide content distribution for porn companies[and also CNN and Yahoo]. We had a saying, “Porn built the Internet”. They make a ton of money!

An explanation of how it works. I think its a neat concept.

And my favorite…this one cuts straight to the chase!!!

What do you guys think of investing in porn? I personally don’t care. It called diversification!! 😉

Maybe it’ll even become mainstream some day. “Oil and gas investments aren’t exciting enough for you? You need some excitement in your portfolio – invest in the Adult Entertainment industry!!!”

Not to mention its yet another way to deduct your adult entertainment subscriptions on your taxes! It really will qualify as research.

Are Timeshares A Scam?

Posted on October 18, 2006 by Nirav

Several people have asked me whether Timeshares are a good investment or not.

Some of the reasons the Timeshare companies give are

Its a good investment. If you get title to the property as a fractional owner, you get all the tax deductions of home ownership.
The cost of your vacations never goes up. So you beat inflation.
You can exchange you timeshare with other people in different parts of the world and live for free whenever you go on vacation.

On the surface it sounds really good. A while ago I had the misfortune of being conned into attending one of these in Vegas in exchange for some free show tickets. The reason they can afford to hand out $200 worth of free tickets is because they use high-pressure tactics to persuade you to buy an overpriced condo.

Lets do the math…

They wanted $35,000 for a 1 week rental of a bedroom condo. So basically they took a $300,000 condo and sold it for $35,000 x 52 weeks = $1.825 million!!!!

Plus you pay an annual $850 “maintenance” fee. That doesn’t sound like putting a cap on the cost of my future vacations, since this maintenance fee will go up with inflation.

Also, in order to exchange you timeshare with other timeshare owners you needed to subscribe to a service that charges around $185/year. Out of kindness, this fee was waived for the first year and I would get 2 round trip tickets to anywhere in the world plus a 7 day fully paid for vacation to Cancun.

Hmmm….if I invest the $35,000 at 8%, thats $2800. Add $850+$185 to that and I get $3835. I don’t think I’ve ever spent that much money for living accommodations on a 2 week trip anywhere in the world. Granted, I didn’t stay in 5 star hotels, but I’m pretty sure you can rent a condo for about $1,000/week anywhere in the world in peak season. And if you can get more than 8% return on your investments, you’re losing even more money.

I think its a big scam. The presentation I went to was offered by the Hilton. They had 4 huge towers on a tiny postage stamp of a lot. I think there were probably 400 condos on 1 block of land. Thats like selling 1 building for around $720 million!!!! DAMN, I need to get into business!

But if your heart is still set on “investing” in a timeshare, make sure you check-out the resale market at my Timeshare store.

Achieving financial freedom through passive income

Category Archives: alternate investments

Canadian Royalties Revisited

Timeshare Buyer or Victim?

Dollar May Weaken

Invest In Porn!

Are Timeshares A Scam?