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Wednesday, May 20, 2009

Energy Savings Income Fund is an investment rock

The expression “investment rock” had been used by the Executive chair of Energy Savings Income Fund (SIF.UN) in her latest press release. I really like the expression “investment rock”. As a small investor, I am in great needs of solid investments. I truly believe that SIF.UN represents a good investment. I am very proud to have SIF.UN included in my portfolio.

Here is some of the context where the Executive Chair had used the expression “investment rock” to describe SIF.UN:

“I like to think of Energy Savings as the fund for all seasons. Since our IPO eight years ago, we have seen good weather and bad weather, skyrocketing commodity prices and collapsing commodity prices, good economic times, and the worst recession since the 1930s. I would like to think that Energy Savings has been an investment rock throughout the entire period, providing predictable, reliable and growing cash flow to our investors every year, just as I promised at the time of the IPO.”

And the good news just keep rolling and rolling through the rest of the press release. According to RM, SIF.UN fourth quarter of fiscal 2009 had been, to repeat her words: “the strongest quarter in the history of the company”. Is there anything better that can be said about SIF.UN?

While being in a major recession, SIF.UN declares its best result ever. Those are good news for unitholders of SIF.UN like me.

Just like Sprott Asset Management (SII) who had provided a special dividend to their stockholders, SIF.UN had paid a special distribution to their unitholders. In 2009, the special distribution of SIF.UN had been of 16.5 cents per unit.

But isn’t strange that SIF.UN had also a net income loss of more than 1 billion? Is it normal for the Executive chair to publicly declare that SIF.UN had its best result ever when they had at the same time a net income lost of exactly 1 107 473 000$? This is the most complicated part and I don’t know for sure – for this specific reason – if SIF.UN really represents a good investment.

At this point, it does begin to become just a bit too much complicated for me lol.

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